Suppose productivity is expensive to measure so the

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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
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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
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