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Chapter 1: Q27. (page 51)

The economic return to earning an MBA. What are the economic rewards (e.g., higher salary) to obtaining an MBA degree? This was the question of interest in an article published in the International Economic Review (August 2008). The researchers made inferences based on wage data collected for a sample of 3,244 individuals who sat for the Graduate Management Admissions Test (GMAT). (The GMAT exam is required for entrance into most MBA programs.) The following sampling scheme was employed. All those who took the GMAT exam in any of four selected time periods were mailed a questionnaire. Those who responded to the questionnaire were then sent three follow-up surveys (one survey every 3 months). The final sample of 3,244 represents only those individuals who responded to all four surveys. (For example, about 5,600 took the GMAT in one time period; of these, only about 800 responded to all four surveys.)

A. For this study, describe the population of interest.

b. What method was used to collect the sample data?

c. Do you think the final sample is representative of the population? Why or why not? Comment on potential biases in the sample.

Short Answer

Expert verified

a. All those individuals who gave the examination during the specified period.

b. Observational study

c. Yes, a random sample is used.

Step by step solution

01

Specifying the population of interest

The population comprises the set of all the items that have some or other similar property. For the researcher, the population of interest isthe set of all the individuals who gave the GMAT exam in the selected periods.

02

Determining the method used in data collection

The method used to gather data is a survey part ofan observational study. In the observational study, the researcher carefully considers the units in their natural settings and analyzes the variable. In this case, the survey is sent to people who gave the exam; the researcher records the replies to the questions asked in the survey and uses this for analyzing the sample.

03

Step 3: Determining the conditions of a representative sample

Yes, the final sample that comprises 3244 individuals who took the exam indicates the representative sample because there was no biasness in the selection of the individual. Those individuals who answered all four surveys were part of the sample, and there is no personal biasness of the researcher involved in selection. Thus, one can conclude it is representative of the population.

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Most popular questions from this chapter

Structurally deficient highway bridges. Refer to Exercise 1.29. The NBI data were analyzed and the results made available at the FHWA Web site (www.fhwa.dot.gov). Using the FHWA inspection ratings, each of the 608,272 highway bridges in the United States was categorized as structurally deficient, functionally obsolete, or safe. About 13.5% of the bridges were found to be structurally deficient, while 3.5% were functionally obsolete.

a. What is the variable of interest to the researchers?

b. Is the variable of part a quantitative or qualitative?

c. Is the data set analyzed a population or a sample? Explain.

d. How did the NBI obtain the data for the study?

The “lucky store effect” in lottery ticket sales. In the American Economic Review (Vol. 98, 2008), University of Chicago researchers investigated the lucky store effect theory in lottery ticket sales, i.e., the theory that a lottery retail store that sold a large-prize-winning ticket will experience greater ticket sales the following week. The researchers examined the weekly ticket sales of all 24,400 active lottery retailers in Texas. The analysis showed that “the week following the sale of [a winning Lotto Texas ticket], the winning store experiences a 12 to 38 percent relative sales increase. . . . ” Consequently, the researchers project that future winning lottery retail stores will experience the lucky store effect. Is this study an example of descriptive statistics or inferential statistics? Explain.

Customer orders at a department store. A department store receives customer orders through its call center and website. These orders, as well as any special orders received in the stores are forwarded to a distribution center where workers pull the items on the orders from inventory, pack them, and prepare the necessary paperwork for the shipping company that will pick up the packages and deliver them to the customers. In order to monitor the subprocess of pulling the items from inventory, one order is checked every 15 minutes to determine whether the worker has pulled the correct item.

a. Identify the process of interest.

b. Identify the variable of interest. Is it quantitative or qualitative?

c. Describe the sample.

d. Describe the inference of interest.

e. How likely is the sample to be representative?

Consumer recycling behavior. Under what conditions will consumers dispose of recyclable paper in the garbage? This was the question of interest in an article published in the Journal of Consumer Research (December, 2013). In one of the studies conducted, the researchers instructed 78 college students to cut an 8.5-×11-inch sheet of paper into eight smaller pieces. Half the students were randomly assigned to list five uses for the cut paper (usefulness is salient condition). The students in the other half were asked to list their five favorite TV shows (control condition). After completing an unrelated task, all students were asked to dispose of the paper upon leaving. There was a trash bin and a recycling bin outside the door. The researchers kept track of which students recycled and which students disposed of their paper in the garbage. This information was used to test the theory that students in the usefulness is salient condition will recycle at a higher rate than students in the control condition.

a. Explain why the data-collection method used in this study is a designed experiment.

b. Identify the experimental unit in this study.

c. Identify the variables measured in this study. What data type (quantitative or qualitative) is produced from each variable? (Hint: Two variables are measured.)

d. About 68% of the students in the usefulness is recycled, compared to 37% of students in the control condition. Use this information to make an inference about the population of interest.

Bank corporate mergers. Corporate merger is a means through which one firm (the bidder) acquires control of the assets of another firm (the target). Recently, there was a frenzy of bank mergers in the United States, as the banking industry consolidated into more efficient and more competitive units.

a. Construct a brief questionnaire (two or three questions) that could be used to query a sample of bank presidents concerning their opinions of why the industry is consolidating and whether it will consolidate further.

b. Describe the population about which inferences could be made from the results of the survey.

c. Discuss the pros and cons of sending the questionnaire to all bank presidents versus a sample of 200.
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