Question

Your company is sued for job discrimination. Based on the hiring of 20 employees, the plaintiff argues that only 20% of the newly hired candidates were minorities, when 28% of all applicants were minorities. To prepare for the lawsuit you need to decide if this is strong evidence that your company’s hiring practices are discriminatory. Follow these questions:

Would you use a one-tailed or two-tailed test? Why?

What would a Type I error be? What would a Type II error be?

What is the power of the test in this case?

If the hypothesis is tested at the 5% significance instead of 10%, how will the power of the test be affected?

The lawsuit is based on the hiring of 20 employees out of 214 new hires over the past 5 years. If the plaintiff used a sample of 40 hires, how would the power of the test change?

Based on the analysis you did, what your next step should be?

Answer 1

Solution:

We have date

Organization is utilized for an occupation separation.

In light of enlisting of 20 workers, 20% of recently procured applicants were minorities. At the point when 28% of all candidates were minorities.

Right now, intensity of the test right now the likelihood of effectively identifying the segregation when it really exists.

On the off chance that the theory is tried at the 5% criticalness rather than 10%, at that point the intensity of the test will be diminished.

The claim depends on contracting of 20 representatives out of 214 new contracts in the course of recent years. In the event that the plantiff utilized an example of 40 contracts.

Therefore, On the off chance that the example size is diminished from 40 to 20, the intensity of the test will be brought down as we can build power by expanding the example size and the other way around.

In view of the examination,

Type 1 error level of minorities among recently enlisted workers is not exactly recommended extent.

The organization is unfair.

Type 2 error level of minorities among recently enlisted workers is more noteworthy than or equivalent to recommended extent.

The organization is fair.

May be the theory rate ought to be expanded fundamentally or test size is to be expanded.