An experiment is designed to compare the average salaries of employees in a particular position in two competing companies. The null hypothesis is assumed to be that there is no difference in the average salaries of employees in a particular position in the two companies. What is the alternative hypothesis?

Question

anonymous · Answer

If the null hyp. assumes equal average salaries (i.e. no difference), then the alternative can take on three cases: (1) one mean is greater than the other, (2), one mean is small than the other, or (3) the means are not equal.

(1) and (2) sound the same, so I should be more precise. If $\mu_1$ is supposed to be the average for one company, and $\mu_2$ the average for the other, then (1) would indicate $\mu_1>\mu_2$, while (2) would represent the case that $\mu_1<\mu_2$.

anonymous · Answer

There is a difference in the average salaries.