BES Tutorial Sample Solutions, S2/10

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WEEK 4 TUTORIAL EXERCISES (To be discussed in the week starting
August 9)
1. UNSW wants to measure its attractiveness in absorbing bright minds from
across Australia. They perform an experiment by inviting 100 high school
students from different public schools in New South Wales and ask them to
browse a few websites related to different universities and choose one that
they would prefer most.
(a) Is this a random sample? Can you think of any potential source of bias?
The sample is not perfectly random. First of all, only students in NSW
are sampled, therefore the attitudes of students from other states of
Australia and overseas students are missed. Also the students are all
coming from public schools, and public school graduates might have
different aspirations from private school graduates.
(b) Now assume that the sample of students is chosen to be perfectly
random. Can you think of any confounding factors?
Even if the sample is perfectly random, it should be noted that
universities have different qualities in different fields. For instance,
UNSW engineering and science might be leading faculties, but the
medical faculty might not be the top. A students choice of a university
does not only depend on the attractiveness of the University as a whole,
but also on the fact that they are leading in the particular field that the
student is interested in.
Also Australian students have historically been reluctant to travel, so
proximity has also been an important factor in determining university
choice. Therefore, to measure total attractiveness, we should control
for strengths and weaknesses across schools and differences in travel
times.

2. SIA: Managerial Roles in Asia

Pearson and Chatterjee (2003)*, conducted a survey amongst indigenous
managers working in 4 Asian countries in order to investigate the relative
importance and frequency of employment of different managerial roles. In
addition to providing responses to questions about their managerial work,
respondents provided demographic information. Part of the demographic
information from Table 1 of Pearson and Chatterjee (2003) is given below:

Sample size
Gender
Men
Women
Age (Years)
20-29
30-39
40-49
Above 49

Brunei
115

Respondents
Malaysia
Japan
143
195

Thailand
156

73.9
26.1

67.1
32.9

94.4
5.6

28.2
71.8

11.3
25.2
51.3
12.2

21.0
45.5
25.8
7.7

7.7
32.3
27.7
32.3

44.2
27.6
22.4
5.8

(a) The differences in the gender and age distributions of the respondents
from different countries are clear. Do these differences necessarily
imply that these are non-random samples from the populations of
managers in each of these countries?
No. They may reflect actual differences in the population of indigenous
mangers across countries. (Although some of the distributions do look
extreme and hence unlikely to be representative.)
(b) Pearson and Chatterjee (2003) do state that these were convenience
samples often administered by managers who were involved in post
graduate educational programs conducted by the authors. Does this
necessarily introduce any biases into the analysis of managerial roles?
Not necessarily. It depends. Suppose these samples have gender
distributions that are not representative then this is only an issue if
managerial roles differ by gender. If not, there is no problem. Even if
they do vary by gender we could control for this is our analysis. A very
simple method would be to do cross country comparisons separately
for males and females.

(c) Pearson and Chatterjee (2003) state that Clearly, the Japanese sample
was the oldest, while the Thailand sample was the youngest. Is it clear
that the median and mean age of Thai respondents is less than that of
the Japanese respondents? What about the median and mean age of
Brunei respondents compared with those of the Japanese respondents?
Given the distributions we know that the median age for the Japan
sample is between 40 and 49 while for Thailand it is 30 to 39.
Therefore the answer is yes in terms of medians, the median age for the
Thailand sample is less than for the Japan sample. For Japan
compared to Brunei we cant be sure because in both cases the median
must be between 40 and 49 but we cant tell exactly where.
A comparison of means is even more problematic. Without the
individual data we cant calculate means without making assumptions
about the distribution within a class. For example, assuming class
midpoints to be representative might be a good starting point but then
what do we do about the open ended Above 49 interval.
So while
it might seem reasonable that the means for Thailand and Brunei are
less than for Japan it is difficult to say unequivocally.

*Pearson, C.A.L. & Chatterjee, S.R. (2003), Managerial work roles in Asia: An empirical study of
Minzbergs role formulation in four Asian countries, Journal of Management Development 22, 694706.

3. A department store wants to study the relationship between the way

customers pay for an item and the price of the item. 250 transactions are
recorded and the following table is formed. Convert the table to a joint
distribution and find the following:
Price
category
Under $20
$20-$100
Over $100

Cash
15
11
6

Payment
Credit card
9
53
38

Debit card
18
52
48

Joint distribution:
Price
category
Cash
Under $20
0.06
$20-$100
0.044
Over $100
0.024
Marginal
0.128

Payment
Credit card Debit card
0.036
0.072
0.212
0.208
0.152
0.192
0.4
0.471

Marginal
0.168
0.464
0.368
1

(a) What is the probability that an item is under $20?

P(Under $20) = 0.168
(b) What is the probability that an item with a price tag of $43 is paid in
cash?
P($20-$100 and cash) = 0.044
(c) What is the probability that people pay for an item that is at least $20 by
credit?
P($20 and credit) = 0.212 + 0.152 = 0.364
(d) If somebody used a debit card to pay for an item, what is the probability
that the item was less than $100?
P(<$100|debit) = (0.072+0.208)/0.471 = 0.594
(e) Are price and method of payment independent?
One way to check is to compare the marginal distribution of price with
the conditional distribution of price given payment type (say cash)
P($20-$100|cash) = 0.344
implying dependence

P(($20-$100) = 0.464