Question

28

Let S be the educational attainment of individuals in a town, with values S=0 for less than high school and S=1 for high school or above. Also, let Y be their individual annual income with values Y=0 for less than $20,000, Y=1 for between $20,000 and $40,000, and Y=2 for above $40,000. Consider now the following joint probabilities:

S\Y                                         Y=0 (less than $20K)       Y=1 ($20K-$40K)              Y=2 (more than $40K)

S=0 (Less than HS)            0.05                                                        0.03                                        0.01

Y=1 (HS or more)              0.22                                                        0.36                                        0.33

Determine the conditional standard deviation of the individual annual income given that the level of educational attainment is high school or above.

Answer 1