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Subject: Statistics and Probability

Reread the problem described in Question 10.5 on page 191. (***BELOW****)

Progress Check *10.5 According to the American Psychological Association, members

with a doctorate and a full-time teaching appointment earn, on the average, $82,500 per year,

with a standard deviation of $6,000. An investigator wishes to determine whether $82,500 is

also the mean salary for all female members with a doctorate and a full-time teaching appointment.

Salaries are obtained for a random sample of 100 women from this population, and the

mean salary equals $80,100.

(a) Someone claims that the observed difference between $80,100 and $82,500 is large

enough by itself to support the conclusion that female members earn less than male

members. Explain why it is important to conduct a hypothesis test.

(a) What form should H0 and H1 take if the investigator is concerned only about salary

discrimination against female members?

(b) If this hypothesis test supports the conclusion of salary discrimination against female

members, a costly class-action suit will be initiated against American colleges and

universities. Under these circumstances, do you recommend using the .05 or the .01

level of significance? Why?