This** preview**
has intentionally

**sections.**

*blurred***to view the full version.**

*Sign up*
*
This preview shows pages 7–16. Sign up to view the full content.
*

∙
Suppose productivity is expensive to measure, so the firm chooses a
relatively small sample of workers. The random sample is
X
i
:
i
1,...,
n
, where
X
i
is the change in worker
i
’s productivity.
7

This** preview**
has intentionally

∙
Here the null hypothesis might be that there was no effect on
productivity and the alternative that there was some effect (positive or
negative):
H
0
:
0
and the alternative hypothesis is
H
1
:
≠
0
∙
Of course, the firm is interested in whether
0 or
0 if
H
0
is
false.
8