Question

Critique each of the following proposed research plans. Your critique should explain any problems with the proposed research and describe how the research plan might be improved. Include a discussion of any additional data that need to be collected and the appropriate statistical techniques for analyzing the data.

(a) A researcher is interested in determining whether a large firm is guilty of gender bias in setting wages. To determine potential bias, the researcher collects salary and gender information for all of the firm’s employees. The researcher then plans to conduct a “difference in means” test to determine whether the average salary for women is significantly different from the average salary for men.

(b) A researcher is interested in determining whether time spent in prison has a permanent effect on a person’s wage rate. He collects data on a random sample of people who have been out of prison for at least fifteen years. He collects similar data on a random sample of people who have never served time in prison. The data set includes information on each person’s current wage, education, age, ethnicity, gender, tenure (time in current job), and occupation, as well as whether the person was ever incarcerated. The researcher plans to estimate the effect of incarceration on wages by regressing wages on an indicator variable for incarceration, including in the regression the other potential determinants of wages (education, tenure, and so on).

Answer 1

Answer --4/6/2019 Date: .. a. According to the information given, the "difference in means" test is too limited because it does not include the type of engineer, education level or experience. The gender with the lower wages might be reflected in the type of engineer, experience or education level. The research could be improved by including additional data on the factors namely, gender, education (highest level), experience (time units) and type of engineer.

Then, further it is recommended to construct a multiple regression where the dependent variable is wage and the four factors are independent variables. The importance of the omitted variable means that the 'difference in means' test is unsuitable for determining gender bias in setting wages

b. According to the information given, the researcher plans to create a regressor on a person's wages that includes an indicator variable for incarceration, current job, occupation, etcetera The researcher is correct to use a multiple regression and has collected some good data but does have some omitted variables. These include data that led to the incarceration such as gang involvement, alcohol and drug use. Including these categories corresponding to the variable incarceration (with the rest of considered potential variables' inclusion) would lead to give better estimation of the wages