# Hw5 - Greg Smith Dr Cuellar Econ 317 Problem Set 5 a Using...

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Greg Smith 10/27/2009 Dr. Cuellar – Econ 317 Problem Set 5 a. Using the data set Wage1.dta i. Compare the average wage of men and women in the sample. Is there a difference between male and female wages? 1. . su wage if female==1 Variable | Obs Mean Std. Dev. Min Max -------------+-------------------------------------------------------- wage | 252 4.587659 2.529363 .53 21.63 . su wage if female==0 Variable | Obs Mean Std. Dev. Min Max -------------+-------------------------------------------------------- wage | 274 7.099489 4.160858 1.5 24.98 2. Show graphically the distribution of wages for males and females separately. Describe your graphs.

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0 .1 .2 .3 .4 0 10 20 30 0 10 20 30 0 1 Density average hourly earnings Graphs by =1 if female 3. . hist wage, by(female) b. Perform a hypothesis test on the difference between the mean wage of men and women. Be sure to formally state your null and alternative hypothesis. i. H0: (Mean Wage(Male)) – (Mean Wage(Female)) ≤ 0 Ha: (Mean Wage(Male)) – (Mean Wage(Female)) ˃ 0 . ttest wage, by(female) Two-sample t test with equal variances ------------------------------------------------------------------------------ Group | Obs Mean Std. Err. Std. Dev. [95% Conf. Interval] ---------+--------------------------------------------------------------------
0 | 274 7.099489 .2513666 4.160858 6.604626 7.594352 1 | 252 4.587659 .1593349 2.529363 4.273855 4.901462 ---------+-------------------------------------------------------------------- combined | 526 5.896103 .1610262 3.693086 5.579768 6.212437 ---------+-------------------------------------------------------------------- diff | 2.51183 .3034092 1.915782 3.107878 ------------------------------------------------------------------------------ diff = mean(0) - mean(1) t = 8.2787 Ho: diff = 0 degrees of freedom = 524 Ha: diff < 0 Ha: diff != 0 Ha: diff > 0 Pr(T < t) = 1.0000 Pr(|T| > |t|) = 0.0000 Pr(T > t) = 0.0000 . display invttail(524, .05) 1.6477668 . display 1.6477668*.3034092 .49994761 ii.

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