Question

A university is comparing the hourly wages of students who completed a Master's Degree to students who only completed a Bachelor's Degree. Of the students surveyed, 67 had a Master's degree and 84 had a Bachelor's Degree only. The average hourly rate for those with a Master's was $39.529 (SD = $3.719). Among the graduates with a Bachelor's degree, the average hourly rate was $24.575 (SD = $8.284). If a 90% confidence interval is calculated to estimate the difference between the average hourly rates for each type of graduate, what is the margin of error? Assume both population standard deviations are equal.

Answer 1

We have sample standard deviations, i.e. s1 = 3.719 and s2 = 8.284

sample sizes n1 = 67 and n2 = 84

degree of freedom = n1+n2 -2 = 67 + 84 -2 = 149

using excel function T.INV.2T(alpha,df), where alpha =1 - confidence level = 1-0.90 = 0.10

t-critical = T.INV.2T(0.10,149) = 1.655