Answer Happy

Question 2 (Unit 6) 12 marks An economist is interested in studying income inequality among different parts of the UK. She downloads data from the website of the Office for National Statistics (ONS), who provide such data to the public for free. For this particular study, she wants to look at estimates of gross disposable household income, reported as £ per head; the latest available figures are for 2018. The estimates of average income for England as a whole and for the various regions within England are shown in Table 2. These figures are estimates, so there is some degree of uncertainty (or error) associated with the values. For example, there could be sampling error or response bias in the survey data used to produce these estimates. Table 2 Place England North East North West Yorkshire and The Humber East Midlands West Midlands East of England London South East South West Estimated income (£) 21 609 16 995 18 362 17 665 18 277 18 222 22 205 29 362 24 318 20 907
(e) Decide whether or not you would reject the hypothesis at the 5% significance level. (f) Following Subsection 5.1 of Unit 6, show by hand (i.e. not using any computer software) that the p-value given by the hypothesis test is 0.180. (g) By looking at this p-value, and using Table 10 of Unit 6 (Subsection 5.1), what conclusion can be drawn from the hypothesis test? (h) How does this conclusion sit with the result of part (e)? (i) Based on these results, what should the economist conclude? Make specific references to the context and consider whether the sign test was appropriate. [1] [3] [1] [1] [2]