# CSUSM Econometrics Discussion

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ECON 471: Econometrics
Problem Set #1
Due February 14, 2022
1. You are tasked with evaluating if there is a difference in the average wages of college
graduates and non-college graduates. You take a random sample of 1,600 college
graduates and a random sample of 2,700 non-college graduates. The average wage in
your sample of graduates is \$35/hour, with a sample standard deviation of \$40/hour. The
average wage in your sample of non-graduates is \$31/hour, with a standard deviation of
\$90/hour.
a. What are your null and alternative hypotheses?
b. State your conclusion regarding the difference in average wages, using 5%
significance.
c. What is the 95% confidence interval for the difference in average wages?
2. You collect two random samples, one for males and one for females, and calculate the
average number of hours worked in each sample. You find a difference in the average
number of hours worked of 5 hours/week. Furthermore, based on the data, you reject the
null hypothesis that the average number of hours worked for males and females are equal
at 5% significance. Can you conclude that being female causes individuals to work fewer
hours per week? Why or why not?
3. The final price a consumer pays for a six-pack of soda is dependent on the posted price
and sales tax. In San Marcos, sales tax is 8.00%. The average posted price for a six-pack
of soda in San Marcos is \$4.99. The variance of the posted price for a six-pack of soda in
San Marcos is 3.50. What are the average final price and the standard deviation of the
final price paid for a six-pack of soda in San Marcos?
4. Use the Earnings and Height data on Cougar Courses to answer the following questions.
a. What are the sample average, and standard error of the sample average for
earnings?
b. What proportion of the individuals in the data are female?
c. What proportion of the individuals in the data are black males?
d. Are the average earnings in the population different than \$46,000?
e. Do males earn more than females?