Questions and Answers of Essentials Of Econometrics

A discrimination case compared the 1976 salaries of Georgia Power Company black and white employees who had been hired by the company in 1970 to similar entry-level positions [24].a. Explain why
“The most dangerous place to be is in bed, since more people die in bed than anywhere else. From now on, I’m sleeping on the floor.” What problems do you see with this conclusion?
A study found that the grade point averages (GPAs) of women at all-women colleges tend to be higher than the GPAs of women at coeducational colleges, and concluded that women do better when they
During World War II, 408,000 U.S. American military personnel died while on duty and 375,000 civilian Americans died because of accidents in the United States. Should we conclude that fighting a war
To obtain a sample of college students, the Educational Testing Service divided all schools into groups, including large public universities, small private colleges, and so on. Then they asked the
Newspaper columnist Ann Landers once asked her readers, “If you had it to do over again, would you have children?” [26]. Ten thousand people responded, of which 70 percent said no.a. Explain why
A study looked at the annual number of days of restricted activity (for example, missing work or staying in bed for more than half a day because of injury or illness)for men with different
A “study” asked people to identify their favorite game and then calculated the mortality rate (deaths per 1,000 people that year) for each game category [28]. For example, of those people whose
A television commercial said that 70 percent of the cars made by one automaker during the past 12 years were still in use. Does this mean that 70 percent of this company’s cars last 12 years?
A study found that Harvard freshmen who had not taken SAT preparation courses scored an average of 63 points higher on the SAT than did Harvard freshmen who had taken such courses. Harvard’s
A survey conducted by American Express and the French Tourist Office found that most visitors to France do not think that the French are unfriendly [30]. The sample consisted of “1,000 Americans
Some universities with budget problems have offered generous payments to any tenured professor who agrees to leave the university.a. How does this plan help the university’s budget?b. Explain why
Congressmen Gerry Studds (a Massachusetts Democrat) and Daniel Crane (an Illinois Republican) were both censured by the House of Representatives for having had sex with teenage pages. A questionnaire
Identify each of the following errors in a public opinion survey as either sampling error or systematic error:a. The survey misses many people who work during the day.b. The survey interviews only
Identify each of the following errors as either sampling error or systematic error:a. A study of income misses people whose income is not reported to the government.b. People tend to overreport their
Explain why the following procedure is likely to produce either biased or unbiased estimates of the amount of money people spend at restaurants each year. A random number between 1 and 7 is selected;
There were 562,157 live births in California in 2006; information about each of these births was arranged in alphabetical order using the mother’s name. State whether each of the following sampling
There were 233,467 deaths in California in 2007; the names of these decedents were arranged in alphabetical order. A random number generator was used to select 100 numbers between 1 and 233,467.
Compare the sampling distributions of two random samples that will be used to estimate the average age of a woman giving birth in the United States in 2010. One sample has 100 observations and the
Do you think that the probability distribution of household income in the United States is skewed left, skewed right, or symmetrical? If a random sample of 100 households is taken, do you think that
A statistics class with 500 students obtained a database of the annual salaries of every government employee in the state of California. Each student took a random sample of 30 employees and
Which of these histograms do you think will look more like a normal distribution?Explain your reasoning.a. One six-sided die is rolled 1 billion times and these 1 billion numbers are used to make a
Which of these experiments do you think has the higher average? Explain your reasoning.a. One coin is flipped 1 billion times and the average number of heads is calculated(total number of heads
Each of the following three experiments will be repeated 1 million times and the variance of the 1 million results will be calculated. Which of these experiments do you think will have the largest
Each of the following three experiments will be repeated 1 million times and the variance of the 1 million results will be calculated. Which of these experiments do you think will have the largest
One grade of Washington navel oranges has a weight that is normally distributed with a mean of 12 ounces and a standard deviation of 2 ounces.a. What is the probability that a randomly selected
The average life of a Rolling Rock tire is normally distributed with a mean of 40,000 miles and a standard deviation of 5,000 miles. Think about the four probabilities that follow. You do not have to
An investor believes that the returns on each of two investments over the next year can be described by a normal distribution with a mean of 10 percent and a standard deviation of 20 percent. This
An economics professor told his students that, instead of spending hundreds of dollars for a very accurate watch, they should wear 20 cheap watches and calculate the average time shown on these 20
In a lawsuit concerning the discharge of industrial wastes into Lake Superior, the judge observed that a court-appointed witness had found the fiber concentration to be “0.0626 fibers per cc, with
An outside consultant for a small suburban private school with a reputation for academic excellence analyzed the test scores in Table 6.4 for 13 students (of the 20 students initially admitted) who
Redo Exercise 6.18, this time using the mathematics scores.Exercise 6.18An outside consultant for a small suburban private school with a reputation for academic excellence analyzed the test scores in
Think of the database of 203 high-stakes poker players as a population, from which a random sample of 9 players is selected with these looseness coefficients:Calculate a 95 percent confidence
Data were obtained for 16,405 women who immigrated to the United States and their adult daughters at matching times of their lives [5]. The median income in the mothers’and daughters’ ZIP codes
Forty randomly selected college students were asked how many hours they sleep each night. Use these data to estimate a 95 percent confidence interval for the mean of the population from which this
The first American to win the Nobel Prize in physics was Albert Michelson (1852–1931), who was given the award in 1907 for developing and using optical precision instruments.Between October 12,
The population of Spain is approximately four times the population of Portugal.Suppose that a random sample is taken of 1,500 Spaniards and 1,500 Portuguese.Explain why you believe that the standard
Exercise 3.43 shows the percentage errors when 24 college students were asked to estimate how long it took them to read an article. Use these data to estimate a 95 percent confidence interval for the
In 1868, a German physician, Carl Wunderlich, reported his analysis of over 1 million temperature readings from 25,000 patients [7]. He concluded that 98.6° Fahrenheit,(which is 37.0° Celsius) is
An advertising agency is looking for magazines in which to advertise inexpensive imitations of designer clothing. Their target audience is households earning less than $30,000 a year. A study
A Wall Street Journal poll asked 35 economic forecasters to predict the interest rate on 3-month Treasury bills 12 months later [9]. These 35 forecasts had a mean of 6.19 and a variance of 0.47.
Based on 11 separate studies, the Environmental Protection Agency (EPA) estimated that nonsmoking women who live with smokers have, on average, a 19 percent higher risk of lung cancer than similar
A statistics textbook [11] gives this example:Suppose a downtown department store questions forty-nine downtown shoppers concerning their age.… The sample mean and standard deviation are found to
Statisticians sometimes report 50 percent confidence intervals, with the margin for sampling error called the probable error. For example, an estimate X of the average useful life of a television is
An article about computer forecasting software explained how to gauge the uncertainty in a prediction: “[Calculate] the standard deviation and mean (average) of the data.As a good first guess, your
To investigate how infants first comprehend and produce words, six British children were observed in their homes every 2 weeks from age 6 to 18 months [13]. Among the data collected were the age (in
The American Coinage Act of 1792 specified that a gold $10 eagle coin contain 247.5 grains of pure gold. In 1837, Congress passed a law stating that there would be an annual test of 1 coin and 1,000
Do you think that a 95 percent confidence interval is wider if a researcher uses the normal distribution or t distribution? Explain your reasoning.
Other things being equal, explain why you think each of the following changes would increase, decrease, or have no effect on the width of a 95 percent confidence interval for the population mean:a.
Explain why you either agree or disagree with this reasoning: “[T]he household[unemployment] survey is hardly flawless. Its 60,000 families constitute less than 0.1 percent of the work force”
Newsweek once wrote [15] that the width of a confidence interval is inversely related to the sample size; for example, if a sample of 500 gives a confidence interval of plus or minus 5, then a sample
Your assignment is to estimate the average number of hours a day that people spend doing e-mail. You think the standard deviation is probably around 2 hours. If so, how large a sample do you need for
One researcher took a random sample of size 10 and estimated a 95 percent confidence interval for the average home price in an area to be $180,000 ± $40,000; another researcher took a random sample
You believe that household income in a country has a mean of around $40,000 with a standard deviation of about $30,000. How large a sample should you take if you want the width of a 95 percent
Which of the three density functions shown in Figure 6.5 has the largest area under the curve? The smallest area?Figure 6.5 0.4 0.3 n=100 10 Density 0.2 0.1 n=10 0.0 15 n=25 Mean=25 X -20 20 25 30 35
The text reports a 95 percent confidence interval for the looseness coefficient for high-stakes Internet poker players to be 25.53 ± 1.18. Explain why you either agree or disagree with these
A researcher calculated a 95 percent confidence interval using a random sample of size 10. When a colleague suggested that the sample was pretty small, the researcher doubled the size of the sample
A government agency wants to estimate the number of fish in a lake. People from the agency catch 100 fish, tag them, and put them back in the lake. A short while later, they catch 100 fish and find
What would be a natural null hypothesis for the research question of whether or not the average U.S. passenger car gets more than 30 miles per gallon? What alternative hypothesis would you use?
Researchers used a random sample to test the null hypothesis that the average age of people visiting an Internet site is 25. Which of the following results has the higher t value for a test of this
Which of the following results has the higher t value for a test of the null hypothesis that the average speed on a 40 miles-per-hour street is 40 miles per hour? Do not do any calculations; just
Which of the following results has the higher t value for a test of the null hypothesis that the average U.S. passenger car gets 30 miles per gallon? Do not do any calculations; just explain your
Exercise 6.30 shows 50 body temperature readings for healthy persons using modern thermometers. Use these data to calculate the two-sided P value for a test of the null hypothesis that the population
Explain why you either agree or disagree with this reasoning: “I used a random sample to test the null hypothesis that the average body temperature of healthy adults is 98.6. I calculated a
Use the reading comprehension data in Exercise 6.18 to test the null hypothesis that the population mean of X is 0.a. What is the two-sided P value?b. Does the average value of X seem substantially
The data for deceased Major League Baseball (MLB) players in Table 7.2 were used [15] to investigate the research hypothesis that players with positive initials (like ACE) live longer, on average,
Critically evaluate this news article [16]:BRIDGEPORT, Conn.—Christina and Timothy Heald beat “incredible” odds yesterday by having their third Independence Day baby.Mrs. Heald, 31, of Milford
A 1981 retrospective study published in the prestigious New England Journal of Medicine looked at the use of cigars, pipes, cigarettes, alcohol, tea, and coffee by patients with pancreatic cancer and
Researchers once reported that 1969–1990 California mortality data show that Chinese-Americans are particularly vulnerable to four diseases that Chinese astrology and traditional Chinese medicine
A researcher asked 100 college students, “How many hours did you sleep during the past 24 hours?” Identify several errors in this description of the statistical test: “The following equation is
A study of MLB players who were born between 1875 and 1930 reported that players whose first names began with the letter D died an average of 1.7 years younger than MLB players whose first names
Medical researchers compared the measured calories in eight locally prepared health and diet foods purchased in Manhattan, New York, with the calories listed on the label [23]. The data in Table 7.4
The researchers in Exercise 7.19 also compared the actual and listed calories in 20 nationally advertised health and diet foods purchased in Manhattan (see Table 7.5).Determine the two-sided P value
In a letter to the prestigious New England Journal of Medicine, a doctor reported that 20 of his male patients with creases in their earlobes had many of the risk factors (such as high cholesterol
A researcher collected data on the number of people admitted to a mental health clinic’s emergency room on 12 days when the moon was full [25]:a. Calculate the two-sided P value for a test of the
The study of immigrant women and their adult daughters mentioned in the text also separated the data into 580 mother-daughter pairs where the adult daughter lived in the same ZIP code she was born in
A builder contracted for the delivery of 4 million pounds of loam. The supplier delivered the loam in 1,000 truckloads that he claims average 4,000 pounds of loam.The builder weighed a random sample
Chapter 6 discussed a test of a new enzyme in which a sample of 41 observations found an average yield of 125.2 with a standard deviation of 20.1. A member of the research department was unimpressed
Use the data in Exercise 6.22 to calculate the two-sided P value for a test of the null hypothesis that the population mean is 37,408.Exercise 6.22Data were obtained for 16,405 women who immigrated
Use the data in Exercise 6.26 to calculate the two-sided P value for a test of the null hypothesis that the population mean is 8.Exercise 6.26Forty randomly selected college students were asked how
Use the data in Exercise 6.27 to calculate the two-sided P value for a test of the null hypothesis that the population mean is 299,710.50.Exercise 6.27The first American to win the Nobel Prize in
While playing bridge recently, Ira Rate picked up his 13-card hand and found that it contained no spades. He promptly threw his cards down and declared that the deal had not been random. He read in a
The following letter to the editor was printed in Sports Illustrated [26]:In regard to the observation made by Sports Illustrated correspondent Ted O’Leary concerning this year’s bowl games
“As January goes, so goes the year” is an old stock market adage. The idea is that if the market goes up from January 1 to January 31, then it will go up for the entire year, January 1 to
In 1987, a brokerage firm observed that “since 1965, the Dow Jones Industrial Average declined 16 out of 21 times during the month of May. As of this writing, it appears as if another down May is
When she was in junior high school, Elizabeth Likens started listening to classical music after she was told that “studies show that students who listen to classical music get better grades.”
Crime in downtown Houston increased by 40 percent during the first month after the Houston police launched an anticrime campaign, leading Texas Monthly to quip that“They should have launched a
Two Dutch researchers found that nondrinkers “are 50% more likely to get hurt on the [ski] slopes than skiers who imbibe heavily, and that people who sleep long and deeply are more prone to injury
Explain why you either agree or disagree with each of the following statements:a. A test that is significant at the 1% level is also significant at the 5% level.b. If the t value is 0, the P value is
A random sample of 800 first-year students at a large university included 558 students who had attended public high schools and 242 who had attended private schools. The average grade point average
A test of the null hypothesis that the average college student gains 15 pounds during the first year at college surveyed a random sample of 100 students and obtained a sample mean of 4.82 pounds with
Before 1996, the Environmental Protection Agency (EPA) concluded that secondhand smoke poses a cancer risk if a 95 percent confidence interval for the difference in the incidence of cancer in control
A treatment group was given a cold vaccine, while the control group was given a placebo. Doctors then recorded the fraction of each group that caught a cold and calculated the two-sided P value to be
A study of the relationship between socioeconomic status and juvenile delinquency tested 756 possible relationships and found 33 statistically significant at the 5 percent level [32]. What
In 1989, the New York Times reported that, if the Dow Jones Industrial Average increases between the end of November and the time of the Super Bowl, the football team whose city comes second
The results of hypothesis tests are often misinterpreted in the popular press. For instance, explain how this Business Week summary of a Data Resources Incorporated(DRI) study of insider trading in
A Wall Street Journal editorial stated:We wrote recently about a proposed Environmental Protection Agency ban on daminozide, a chemical used to improve the growth and shelf life of apples. EPA’s
Researchers used a random sample to test the null hypothesis that the average change between 2000 and 2010 in the real hourly wages of construction workers was equal to 0. Their decision rule was to
Researchers used a random sample of size 100 to test the null hypothesis that the average difference between the household income of immigrant women and their adult daughters is equal to 0. Their
In a 1982 racial discrimination lawsuit, the court accepted the defendant’s argument that racial differences in hiring and promotion should be separated into eight job categories[36]. In hiring, it

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