Introduction to Econometrics 3rd Edition by James Stock, Mark Watson

Exercise 28

To investigate possible gender discrimination in a firm, a sample of 100 men and 64 women with similar job descriptions are selected at random. A summary of the resulting monthly salaries follows:
a. What do these data suggest about wage differences in the firm Do they represent statistically significant evidence that average wages of men and women are different (To answer this question, first state the null and alternative hypothesis; second, compute the relevant t -statistic; third, compute the p-value associated with the t -statistic; and finally, use the p -value to answer the question.)
b. Do these data suggest that the firm is guilty of gender discrimination in its compensation policies Explain.