Car-Buying Discrimination To determine if there is gender and/or race discrimination in

Chapter 13, Problem 19

(choose chapter or problem)

Car-Buying Discrimination To determine if there is gender and/or race discrimination in car buying, Ian Ayres put together a team of fifteen white males, five white females, four black males, and seven black females who were each asked to obtain an initial offer price from the dealer on a certain model car. The 31 individuals were made to appear as similar as possible to account for other variables that may play a role in the offer price of a car. The following data are based on the results in the article and represent the profit on the initial price offered by the dealer. White Male Black Male White Female Black Female 1300 853 1241 951 1899 646 727 1824 954 2053 951 559 1616 754 1943 794 429 1537 706 2168 661 1181 596 2325 824 853 1982 1038 877 1780 754 Source: Ian Ayres. Fair Driving: Gender and Race Discrimination in Retail Car Negotiations. Harvard Law Review. Vol. 104, No. 4, Feb. 1991.(a) Ayres wanted to determine if the profit based on the initialoffer differed among the four groups. State the null andalternative hypotheses.(b) A normal probability plot of each group suggests the datacome from a population that is normally distributed. Verify therequirement of equal variances is satisfied.(c) Test the hypothesis stated in part (a).(d) Draw side-by-side boxplots of the four groups to support theanalytic results of part (c).(e) What do the results of the analysis suggest?(f) Because the group of black males has a small sample size,the normality requirement is best verified by assessing thenormality of the residuals. Verify the normality requirement bydrawing a normal probability plot of the residuals