Question
To study whether or not the level of earning is affected by educational attainment, a social scientist randomly selected 100 people from each of three income categories ‘low’, middle’,
‘high’ and then recorded their educational attainment as in the following table:
| Educational attainment | Income Categories | Total | ||
| Low | Middle | High | ||
| No college UG PG Doctoral | 32 13 43 12 | 20 16 51 13 | 23 1 60 15 | 75 30 154 41 |
| Total | 100 | 100 | 100 | 300 |
Do these data indicate that the level of earning is affected by educational attainment? Test at = 0.01.
Answer :
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To determine whether the level of earning is affected by educational attainment, we will conduct a Chi-square test of independence. This test will help us determine if there is a significant association between educational attainment and income level. ### Hypothesis: - Null hypothesis (H₀): There is no association between educational attainment and income level (they are independent). - Alternative hypothesis (H₁): There is an association between educational attainment and income level (they are dependent). ### Given Data: We have the observed frequencies in the table, and we will calculate the expected frequencies to perform the chi-square test. The observed frequencies (O) for each category are: | Educational Attainment | Low Income
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