Statistical Research Project

MBA 2009-2012 BUSINESS STATISTICS

Statistical Research Project

MBA 2009 - 2012 10/4/2009

Rajesh Kumar Garg Ravi Ganesh Saurabh Agarwala Siddharth Sikka Ujjwal Malik

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Statistical Research Project

MBA 2009-2012 BUSINESS STATISTICS

Table of Contents
Problem Statement ..........................................................................................................................................3 Background ......................................................................................................................................................3 Method ............................................................................................................................................................4 Results ..............................................................................................................................................................6 Conclusions ................................................................................................................................................... 14 Recommendations ........................................................................................................................................ 14 References .................................................................................................................................................... 14

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Statistical Research Project

MBA 2009-2012 BUSINESS STATISTICS

Problem Statement
ABC HR Consultancy needs to set employee wages across different Industry sectors in a given geographical area, for the coming year

Background
At the end of every year ABC HR Consultancy designs wages across sectors based on the Current Population Survey data, for the coming year. The wage analysis is used to by the ABC HR Consultancy to help its client benchmark their employee wages for the forthcoming year. This wage analysis is carried out on this data. The wage analysis takes into account the dependency of wage on the following factors Gender Years of Experience Sector Occupation

The aim of the wage analysis is to determine the following: 1. 2. 3. 4. 5. Percentage distribution of jobs across genders , sectors occupation and years of experience Mean wage and cumulative distribution for the population Summary Statistics of wage across gender, sectors, occupation and years of experience Modelling of wage against years of experience Proving four results using hypothesis testing

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Statistical Research Project

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Method
The Current Population Survey (CPS) is used as the sample date for the wage analysis. This data consists of a random sample of 534 persons from the CPS, with information on wages and including Gender, years of work experience, sector and occupation 1. The sample data is sorted on the basis of the wages. 2. The population distribution analysis of the area is done based on the following: o o o o Gender distribution Sector Occupation Years of Experience (with appropriate intervals )

The results for this are highlighted in Section 1 of the Results Section 3. The descriptive statistics are carried out on the sample data including the 5-N summary. These consist of : o Minimum o Maximum o 1st Quartile o 3rd Quartile o Median o Mode o Standard deviation o Mean o Cumulative Wages o Kurtosis o Variance o Range, etc. The results for the above are highlighted in Section 2 of the Results Section 4. Summary Statistics are created in form of Box-plots to analyse the wages across four different parameter. The results for the above are highlighted in Section 3 of the Results Section 5. The wages are modelled against the Years of Experience. The results for the above are highlighted in Section 4 of the Results Section 6. Hypothesis testing is utilized to carry out 4 different tests to prove the wage analysis across four chosen areas

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Statistical Research Project

MBA 2009-2012 BUSINESS STATISTICS

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Statistical Research Project

MBA 2009-2012 BUSINESS STATISTICS

Results
Section 1: A series of the pie-charts given below have been used to describe the percentage distribution amongst the following parameters 1. Gender : The distribution of male and females working population in the geography is 54 % and 46 % respectively

Gender

54%

46%

Female

Male

2. Sector: More than Two-thirds of the Jobs in the area are concentrated in the nonmanufacturing and non-construction sectors

Sector
4%
19%

77%

Construction

Manufacturing

Others

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3. Occupation: Other category of options form the highest concentration of occupations in the area, followed by Professional and Sales related occupations

Occupation profile
16%

18% 10%
29%

7% 20%

Clerical Professional

Management Sales

Others Service

4. Years of Experience: The distribution of the years of experience is almost evenly divided in the geographical area amongst different sectors. This provides a insights into the strengths and accuracy of the sample data

Experience
21% 18% 22% 20% 19%

0 to 6 yrs 19 to 28 yrs

7 to 12 yrs 29 plus yrs

13 to 18 yrs

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Section 2: This section makes use of descriptive statistics to provide a view of the mean and cumulative wage 1. Mean Wage: The graph and the table below provide a view of the descriptive statistics. The mean wage is $9 an hour with a standard

Number of people
70 60 50 40 30

Mean

20 10 0
1 3 5 7 9

Statistic Mean Standard Error Median Mode Standard Deviation Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count

Value 9.0 0.2 7.8 5.0 5.1 26.4 5.0 1.7 43.5 1.0 44.5 4818.9 534.0

11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 Wage ($ per hour)

2. Cumulative Wage: The cumulative wage graph provides the view of the wages as distributed over the complete sample population.

Cumulative Wage Distribution

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 Wage ($ per hour)

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Statistical Research Project

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Section 3: This section makes use of box plots to plot the wages against all the different parameters including: Gender, Sectors, Occupations and Years of Experience 1. Summary statistics for the wages across genders and sectors

-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0

8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

TOTAL POPULATION
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

MALES
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

FEMALES
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

SECTOR : CONSTRUCTION
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

SECTOR : MANUFACTURING
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

SECTOR : OTHERS

2. Summary statistics for the wages across Occupations

-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0

8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

TOTAL POPULATION
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

OCCUPATION: CLERICAL
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

OCCUPATION: MANAGEMENT
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

OCCUPATION : PROFESSIONALS
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

OCCUPATION : SALES
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

OCCUPATION : SERVICE
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

OCCUPATION : OTHERS

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Statistical Research Project 3. Summary statistics for the wages across years of experience

MBA 2009-2012 BUSINESS STATISTICS

-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0

8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

TOTAL POPULATION
-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

EXP : 0-6 yrs

-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

EXP : 7-12 yrs

-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

EXP : 13-18 yrs

-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

EXP : 19-28 yrs

-24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46

EXP : 28+ yrs

4. Summary statistics for the wages of the total population- It can be surmised that majority of the population has wages lying between $5 - $11 an hour

-10 -8

-6

-4

-2

10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48

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Section 4: In this section wage has been plotted against the Years of experience. The table attached with the graph provides the best possible predication of wages with the least average error

Wage

Experience

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Statistical Research Project

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Section 5: In this section we have surmised the results of four tests through Hypothesis testing TEST 1 H0: Average wage of female employees is same as overall average H1: Average wage of female employees is not equal to overall average Type of test x bar mu sigma n z value z test 7.9 9.0 4.5 245.0 -3.5

Conclusion: H0 rejected with 99% confidence. There is a difference in average wage of females from the overall average

TEST 2 H0: Average wage of employees in manufacturing sector is same as overall average H1: Average wage of employees in manufacturing sector is not equal to overall average Type of test x bar mu sigma n z value z test 9.6 9.0 4.5 99.0 1.1

Conclusion: H0 not rejected at even 90% confidence level. There is no difference in average wage of manufacturing sector employees from the overall average

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Statistical Research Project TEST 3

MBA 2009-2012 BUSINESS STATISTICS

Test whether variance in wage of management is higher, lower or equal to that of total sample Sample Size Sample Variance Test Statistic Null hypothesis H0 2 = H0 2 >= H0 2 <= 55 57.34 117.242 26.41 26.41 26.41 n s2
2

p-value 0.0 1.0 0.0

1% Reject Reject

Conclusion: Variance in wages of management is higher than that of total sample

TEST 4 H0: Proportion of females working in clerical / service sectors is greater than overall sample proportion by not more than 10% H1: Proportion of females working in clerical / service sectors is higher than overall sample proportion by more than 10% Type of test Sample proportion Population proportion n z value z test 0.7 0.5 180.0 3.7

Conclusion: Null hypothesis is rejected. Proportion of females is greater than 10%

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Conclusions

Recommendations

References
Economics Web Institute - http://www.economicswebinstitute.org

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