QMDS2010 case 1

The Associated Press reports that income inequality is at record levels in the United States (September 28, 2010). Over the years, the rich have become richer while working-class wages have stagnated. A local Latino politician has been vocal regarding his concern about the welfare of Latinos, especially given the recent downturn of the United States economy. In various speeches he has stated that the mean salary of Latinos in his county has fallen below the 2008 mean of $49,000. He has also stated that the proportion of Latino households making less than $ 30,000 has risen above the 2008 level of 20%. Both of his statements are based on income data for 36 Latino households in the county as shown in the Excel file that corresponds to this assignment. Using a . 05 level of significance, determine if the mean income of Latino households has fallen below the 2008 level of $49,000. Include your Excel output with your submission. Develop the appropriate hypotheses for this application. What type of test would you run (z, t, proportions)? Explain why. Based on the sample information, what would be the test statistic that corresponds to this application?What is the p-value? Use the p-value rejection rule to come up with the statistical conclusion. What is the critical value? Use the critical value rejection rule to come up with the statistical conclusion. Based on your statistical conclusion, what is your recommendation (English conclusion)?