Characterizing the posterior distribution of the proportion of salary ≥ $50,000
A small business owner has observed the salaries for 474 employees and wants to make Bayesian
inference about the proportion of those employees with a salary equal to or exceeding $50,000. In
light of no specific prior information, the small business owner wants to place a uniform prior, or
Beta(1,1), on the proportion parameter.
Note: If the business owner had a prior belief that most employees made less than $50,000, a
different prior (such as
Beta(2,4)) can be used. Similarly, if the owner believed
that most employees made more than $50,000, a different prior (such as Beta(4,2))
can be used.This information is collected in Employee data.sav. See the topic Sample Files for more information.