PROBLEM SET #3

• 1. You work for the PEW research center. You are evaluating whether people who use statistics at work make more money than others. In your sample, people who use statistics at work have an average income of $40 thousand dollars per year. You wonder whether this is significantly better than the average income, which is $25 thousand dollars per year.
• A) Calculate a 90% confidence interval for your sample of people who use statistics at work (the standard error for your sample is 5).
• B) Calculate a 95% confidence interval for your sample of people who use statistics at work (the standard error for your sample is 5).
• C) Do people who use statistics at work make more money than other people? Explain your answer.
• 2. Review the Stata output below from a small classroom dataset (n=32).
• You will find twoordinal variables:comprehend andparticipation.
• Each variable is coded on a scale from 1 (not at all) to 7 (extremely) to measure how confident students feel about their comprehension of course material and their overall confidence in future course participation.
• For each variable in the Stata output below, review theconfidence interval.

Using your knowledge of confidence intervals and standard error of the mean, answer the following questions and be sure toexplain your reasoning for each question:

A) Interpret the confidence interval for the variablecomprehend.

B) Interpret the confidence interval for variableparticipation.

C) Which variable has a larger standard error of the mean? According to the standard error of the mean, which variable will have more spread out sample means?