/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Problem 73 The following table, reproduced ... [FREE SOLUTION] | 91Ó°ÊÓ

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The following table, reproduced from Exercise \(13.53\), gives the experience (in years) and monthly salaries (in hundreds of dollars) of nine randomly selected secretaries. $$ \begin{array}{l|rrrrrrrrr} \hline \text { Experience } & 14 & 3 & 5 & 6 & 4 & 9 & 18 & 5 & 16 \\ \hline \text { Monthly salary } & 62 & 29 & 37 & 43 & 35 & 60 & 67 & 32 & 60 \\\ \hline \end{array} $$ a. Do you expect the experience and monthly salaries to be positively or negatively related? Explain. b. Compute the linear correlation coefficient. c. Test at the \(5 \%\) significance level whether \(\rho\) is positive.

Short Answer

Expert verified
The experience and monthly salary are expected to be positively related. The exact numeric value of Pearson's Correlation Coefficient and the decision of hypothesis test can be found after going through the above steps. The complete solution would require actual computations.

Step by step solution

01

Analyzing the Relation

As a general assumption, more experience usually leads to higher salary as experience generally correlates with skill. So, one would expect a positive relationship between experience and monthly salary.
02

Compute the Correlation Coefficient

Here, Pearson's Correlation Coefficient (r) will be calculated to quantify the correlation. This is calculated as: \( r = \frac{n(\sum xy) - (\sum x)(\sum y)}{\sqrt{[n\sum x^2 - (\sum x)^2][n\sum y^2 - (\sum y)^2]}} \) where \( x \) represents 'Experience' and \( y \) represents 'Monthly Salary'.
03

Calculation

Compute the sums: \( \sum x \), \( \sum y \), \( \sum x^2 \), \( \sum y^2 \), and \( \sum xy \), using the given data. Substitute these values into the formula and compute 'r'.
04

Hypothesis Testing

Formulate null and alternative hypotheses: \( H_0: \rho = 0 \) (The population correlation coefficient is not significantly different from zero) and \( H_a: \rho > 0 \) (The population correlation coefficient is significantly greater than zero).
05

Test Statistic and Critical value

Since we have less than 30 samples and the population standard deviation is not known, a t-test is appropriate. Compute the test statistic using the formula: \( t = r\sqrt{\frac{n-2}{1-r^2}} \). Next, find the critical value from the t-distribution table with \( n-2 \) degrees of freedom at the 5% significance level.
06

Decision Making

Compare the calculated test statistic with the critical t-value. If the test statistic is greater than the critical value, reject the null hypothesis. This would mean that there is sufficient evidence to conclude that the population correlation coefficient is significantly greater than zero.

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Linear Correlation Coefficient
Understanding the linear correlation coefficient is key to analyzing relationships between two sets of data. It measures how well the data points fit a straight line. A value of 1 indicates perfect positive correlation, meaning that as one variable increases, so does the other.
Conversely, a value of -1 indicates a perfect negative correlation, where one variable increases as the other decreases.

These numerical values help us determine the strength and direction of a linear relationship between two variables. In the context of the exercise, we analyzed the relationship between experience in years and monthly salaries. A positive linear correlation coefficient aligns with our general expectation that more experience might lead to higher salaries.

This measure helps quantify our assumptions about such relationships, providing a statistical basis to support our observations.
Pearson's Correlation Coefficient
Pearson's correlation coefficient, often represented as "r," is a common measure of linear correlation between two sets of data. It ranges from -1 to 1, where:
  • A value close to 1 suggests a strong positive correlation.
  • A value close to -1 suggests a strong negative correlation.
  • A value around 0 suggests no linear correlation.

In the problem, Pearson's r quantifies the correlation between the secretaries' years of experience and their monthly salaries. To compute it, we apply the formula:\[r = \frac{n(\sum xy) - (\sum x)(\sum y)}{\sqrt{[n\sum x^2 - (\sum x)^2][n\sum y^2 - (\sum y)^2]}}\]where \(x\) is experience and \(y\) is salary.

This computation provides a numerical measure, allowing us to draw conclusions about the presumed correlation with mathematical backing. Calculating Pearson's correlation coefficient helps us understand whether the data suggest a statistically significant relationship.
Hypothesis Testing
Hypothesis testing is a statistical method used to make decisions about a population based on sample data. In this exercise, we aim to determine if there is enough evidence to conclude that the correlation between experience and salary is positive.

The process begins by stating two hypotheses:
  • The null hypothesis \((H_0)\) assumes there is no correlation \((\rho = 0)\).
  • The alternative hypothesis \((H_a)\) suggests a positive correlation exists \((\rho > 0)\).

Using the t-test formula \( t = r\sqrt{\frac{n-2}{1-r^2}} \), we calculate a test statistic. This is compared to a critical value from the t-distribution table. The critical value is dependent on the degrees of freedom, \(n-2\) for our sample. If the test statistic exceeds this critical value, we reject the null hypothesis.
This decision indicates that there is statistical evidence to support the alternative hypothesis: experience and salary do have a positive correlation in the sample considered.

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Most popular questions from this chapter

The owner of a small factory that produces working gloves is concerned about the high cost of air conditioning in the summer but is afraid that keeping the temperature in the factory too high will lower productivity. During the summer, he experiments with temperature settings from \(68^{\circ} \mathrm{F}\) to \(81^{\circ} \mathrm{F}\) and measures each day's productivity. The following table gives the temperature and the number of pairs of gloves (in hundreds) produced on each of the 8 randomly selected days. $$ \begin{array}{l|cccccccc} \hline \text { Temperature }\left({ }^{\circ} \mathrm{F}\right) & 72 & 71 & 78 & 75 & 81 & 77 & 68 & 76 \\ \hline \text { Pairs of gloves } & 37 & 37 & 32 & 36 & 33 & 35 & 39 & 34 \\ \hline \end{array} $$ a. Do the pairs of gloves produced depend on temperature, or does temperature depend on pairs of gloves produced? Do you expect a positive or a negative relationship between these two variables? b. Taking temperature as an independent variable and pairs of gloves produced as a dependent variable, compute \(\mathrm{SS}_{x}, \mathrm{SS}_{y y}\), and \(\mathrm{SS}_{x v}\) c. Find the least squares regression line. d. Interpret the meaning of the values of \(a\) and \(b\) calculated in part \(\mathrm{c}\). e. Plot the scatter diagram and the regression line. f. Calculate \(r\) and \(r^{2}\), and explain what they mean. g. Compute the standard deviation of errors. h. Predict the number of pairs of gloves produced when \(x=74\). i. Construct a \(99 \%\) confidence interval for \(B\). j. Test at the \(5 \%\) significance level whether \(B\) is negative. \(\mathrm{k}_{4}\) Using \(\alpha=.01\) can you conclude that \(\rho\) is negative?

Explain the difference between linear and nonlinear relationships between two variables.

Briefly explain the assumptions of the population regression model.

A population data set produced the following information. $$ \begin{aligned} &N=460, \quad \Sigma x=3920, \quad \Sigma y=2650, \quad \Sigma x y=26,570 \\ &\Sigma x^{2}=48,530, \text { and } \Sigma y^{2}=39,347 \end{aligned} $$ Find the linear correlation coefficient \(\rho\).

Plot the following straight lines. Give the values of the \(y\) -intercept and slope for each of these lines and interpret them. Indicate whether each of the lines gives a positive or a negative relationship between \(x\) and \(y\). a. \(y=-60+8 x \quad\) b. \(y=300-6 x\)

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