Problem: Suppose, now, that we wish to investigate whether hourly wagesdiffer, on average, between union manufacturing jobs and non-union manufacturing jobsamong adult workers in the U.S in 2008. We collect data on hourly wages and unionmembership among manufacturing workers older than 18. Letting Union = 1 if a workeris a union member and Union = 0 if not a union member, we estimate our model usingOrdinary Least Squares regression and obtain the following results:
HrWage = 18.906 + 2.273 Union, R2 = 0.0044
(0.6405) (1.180)
1) What is the average hourly wage for a non-union worker, explain?
2) What is the average hourly wage for a union worker, explain?
3) Construct a 95% confidence interval for the difference in hourly wage between unionand non-union workers, explain.