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One Sample Hypothesis Test Essay

Earning potential and income of every person is severely different; many factors have a hand in determining the amount of money a person makes and how much his or her earning potential can increase. Some of the factors currently determining the earning potential of people around the United States are; education, marital status, age, union participation, race, age, years of experience, sex, the industry in which the individual works, and the position held by individual. This paper is going to show the correlation between marital status and income, the team has disregarded all other determinants to answer the research question clearly. The research question that the team has developed and the hypothesis was formed from goes as follows; does marital status affect earning potential? Every decade that passes, it seems as though people are waiting longer to get married. Waiting for job security, completion of college and social norms are just a few factors that influence this trend.

This is a big change from 50 years ago, when most people would get married straight out of high school. The fact is being single has some advantages when deciding to start a career, it also affects ones earning potential. Being single allows more dedication to the job as well as the mobility to go wherever the job may take an individual. While being single may be good for starting a career, being married will actually increase a person’s earning potential in the long run. The mean salary for the single person is $24,864 per year. The mean income for married individuals is $33,303. This leads us to our null hypothesis (H0) that being married will not improve the earning potential of an individual. Our alternate hypothesis (H1) is that being married will help improve the earning potential of an individual. Numerically it is stated:

H0: μ1 ≤ μ2
H1: μ2 > μ2

The five-step hypothesis test starts with stating the null and alternative hypothesis. The null is H0: μ1≤μ2 and the alternative hypothesis is H1: μ1>μ2. The second step in find the decision rule. The decision rule is reject H0 if μ1< μ2< μ1. Step 3 is to calculate the test statistics. It has come to the mean of the earning potential of those who are married and those who are unmarried. Married couples have a mean salary of $33,303.00 and unmarried individuals have a mean salary of $24,864.00. Step 4 is to compare the test statistics to the critical value. The test results in married couples have a greater income than the salaries of unmarried people. Step 5 is to state the results. In result, married couples have greater earning potential than that of their unmarried counterparts. Therefore, in this case the team has to reject their null hypothesis because they have discovered a greater earning potential for married couples over unmarried individuals.

The team’s results provided support to the null hypothesis that a married individual has a higher earning potential than that of a single individual. As previously stated a single individual on average makes $25, 000 while married individuals make on average $34,000 a year. Our research also indicates more working individuals are married over single. Our sample only included 33 single and 67 married individuals. Our study also found non-married men have wages that range from $11,000 to only $27,000 while non-married females wages range from $15,000 to $83,000. Married men have wages that range from $28,000 to $84,000, married women however only have wages that range from $11,000 to $50,000. This shows independent women with one sole income on average make more than men.

However, after marriage, the men tend to become the higher wage earner. Education does not appear to play a significant role it ranges from four to 18 years. A married man with 18 years of education can made up to $84,000 while a single man also with 18 years of education only made $27,000. That is in contrast with a single woman with 17 years of education who make $83,000 a year and a married woman with 17 years of education who made $34,000. The maximum wage for a married woman was $50,000 and this was with 12 years of education. We analyzed many different aspects of earning potential and the majority proves a married individual will make more than that of a single individual.

With all of the numerical data analyzed, the research question answered, and the hypothesis being correct, the team has been able to state confidently that marital status drastically affects earning potential. On average, those who are married make nearly $8,500 more than those who are unmarried. Several other factors determine the income potential differences, but without further analyses of data not provided in the data set, the team would just be throwing around assumptions on the matter.

David P. Doane, L. E. (2007). Applied Statistics in Business and Economics. New York: McGraw- Hill.

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