Assignment ECMT1010 (2022, Semester 1) Page 1 of 3
School of Economics
ECMT1010 (2022, Semester 1) Assignment
Lecturer: Tim Fisher
Due: 6.00pm Friday 27 May 2022
INSTRUCTIONS
1. Your answers must be submitted in electronic copy by 6.00pm Friday 27 May 2022. Late
submissions will be penalized according to Faculty of Arts and Social Sciences rules.
2. Enter your answers using the Word template available under the ECMT1010 Canvas module
‘Assignment’.
3. The assignment is anonymously marked. Save your answers in a .DOCX or .PDF file named
123456789.docx where 123456789 is your 9-digit University of Sydney SID. Do not put
your name on your answers. Do not include a cover sheet.
4. Submit the electronic copy of your answers through Turnitin under the Canvas module
‘Assignment’. Work not submitted on or before the due date is subject to a penalty of 5%
per calendar day late. Work submitted more than 10 days after the due date, or after the
return date, will receive a mark of 0.
5. Use your assigned data set (available under the Canvas module ‘Assignment’). See ‘Specific
instructions’ below. Write your data set number (#) using the box provided in the Word
template. Use of the wrong data set will be reviewed as a potential case of Academic
Dishonesty.
6. The assignment has a maximum of 20 marks and accounts for 15% of your final grade.
Maximum marks are indicated for each question below.
1
Assignment ECMT1010 (2022, Semester 1) Page 2 of 3
Aim: This assignment illustrates the use of various statistical techniques in an economic ap-
plication. You will use software (e.g., Excel, StatKey) to analyze real data to investigate the
relationship between wage rates and level of education as well as differences between males
and females.
Data description: The monthly current population survey by the U.S. Department of Commerce
covers over 50,000 households and serves as the basis for U.S. employment and unemployment
statistics. Data are collected on a number of individual characteristics as well as employment
status. You are assigned a data set containing 100 randomly-selected employed workers from
the May 1978 survey. Your data extract contains information on wage, gender, and years of
education for 100 employed workers randomly extracted from the main sample.
Your data set is available in the Excel spreadsheet Wages#.xlsx (where # is the last digit of
your SID). It contains 4 columns and 101 rows. The first row contains the variable names;
the remaining 100 rows contain the information for each of the 100 workers in your sample.
The Obs column identifies each worker (and can be ignored), WAGE is each worker’s hourly
wage rate (in 1978 U.S. dollars), FEM is gender (0 = male, 1 = female), and EDUC is years of
education (including primary, secondary and tertiary education, as applicable).
Hint: You can import the Excel file into StatKey using the ‘Upload File’ facility after first con-
verting the file into csv format.
Specific instructions: Answer all 9 questions below. Show all numerical answers to 3 decimal
places. Carry out all tests using a 1% level of significance.
QUESTIONS
Amy believes that wage rates depend positively on years of education.
1. Using appropriate software, produce a scatterplot of wage rates against years of education
using your sample. Compute the sample correlation and comment on whether you agree
with Amy. [2 marks]
2. Test whether there is a statistically significant linear association between wages and years
of education, showing all your steps and clearly stating your conclusion. [4 marks]
Amy sets up a regression model to investigate whether wage rates depend positively on years
of education.
3. Write down Amy’s regression model taking care to define your notation clearly. Using ap-
propriate software, estimate the regression model and report your results. [2 marks]
4. Use your regression results to give a one-sentence interpretation of the regression slope
estimate. [2 marks]
5. Test whether years of education is an effective predictor of wage rates in the regression
model you have estimated in question 3. Make sure to report your null and alternative
hypotheses, the test statistic, decision rule, and conclusion to the test. [2 marks]
2
Assignment ECMT1010 (2022, Semester 1) Page 3 of 3
Amy suspects that men are paid more than women, on average. To investigate this claim
statistically, you will use a hypothesis test.
6. Set up the null and alternative hypotheses taking care to define your notation clearly. [2
marks]
7. Using the ‘Shift Groups’ randomization method in Statkey, produce a dotplot of the random-
ization distribution (with at least 2,000 samples) of the appropriate sample statistic. Carry
out the hypothesis test using the randomization distribution and state your conclusion. [2
marks]
8. Verify that the Central Limit Theorem applies in this case, carry out the same hypothesis
test using the appropriate approximation and state your conclusion. Briefly compare these
results to your findings in question 7. [2 marks]
9. Does the evidence suggest that men are paid more than women as a consequence of their
gender? Explain. [2 marks]
DUE: 6.00pm Friday 27 May 2022
3