Question

Iowa has decided to run a quasi-experiment in regard to a new program to reduce unemployment. Officials think that the new program will increase employment rates and earnings. Two hundred recipients are selected; 144 are randomly assigned to an unemployment program, and 81 are assigned to a control group. By follow-up interviews, the state finds out how much outside income per week is earned on average, by each individual with the following results:

	Unemployment Program	Control Group
Mean	$140	$100
Std Dev	132	108
n	144	81

a. Present a hypothesis and a null hypothesis.  
b. Calculate your t-score (involving the overall standard error for the difference of means);
c. estimate your p-value (using n1+n2-2 for d.f.);
d. State a conclusion in plain English.

Answer 1

Solution:

a) Null hypothesis:

H₀ : ₁ = ₂

That is, the new program will be same employment rates and earnings as control

Alternative hypothesis:

H_a : ₁> ₂

That is, the new program will increase employment rates and earnings.

b) EXCEL ( Mega stat) out put:

The value of standardized test statistic is t = 2.457

c) P- value = 0.0074

d) Since p - value(=0.0074) < (=0.05), then reject the null hypothesis.

Therefore , there is enough evidence to support the claim that the new program will increase employment rates and earnings.

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