1. Scholars of political development have investigated the so-called oil curse, the idea that oil-rich countries tend not to develop democratic systems of governance, that "oil and democracy do not mix." Framing this idea in the form of a hypothesis: In a comparison of countries, those having economies less dependent on oil wealth will be more democratic than will countries having economies more dependent on oil wealth. Consider the following data, which presents information for 20 countries with non-oil-dependent economies and 15 countries with oil dependent economies. The dependent variable is a 7-point level-of-democracy scale, with higher scores denoting more democracy. Here are the mean values and standard errors of the democracy scale for non-oil-dependent and oil-dependent countries: Oil-dependent economy? No Yes Mean democracy scale 4.6 2.6 Standard error 48 .28 A. State the null hypothesis for the non-oil-dependent/oil-dependent comparison. B. Calculate the difference between the means of the democracy scale for non-oil-dependent and oil-dependent countries. Calculate the standard error of the difference. Calculate the t- statistic. C. Does the mean difference pass the 1.645 test of significance? Explain how you know. D. Based on these results, suppose a researcher decides to reject the null hypothesis. Is this decision supported by the statistical evidence? Explain.
