In the following data pairs, A represents the cost of living index for housing and B represents

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In the following data pairs, A represents the cost of living index for housing and B represents the cost of living index for groceries. The data are paired by metropolitan areas in the United States. A random sample of 36 metropolitan areas gave the following information:
In the following data pairs, A represents the cost of

i. Let d be the random variable d = A - B. Use a calculator to verify that ‰ˆ 2.472 and sd ‰ˆ 12.124.
ii. Do the data indicate that the U.S. population mean cost of living index for housing is higher than that for groceries in these areas? Use α = 0.05.
Please provide the following information.
(a) What is the level of significance? State the null and alternate hypotheses. Will you use a left-tailed, right-tailed, or two-tailed test?
(b) What sampling distribution will you use? What assumptions are you making? Compute the value of the sample test statistic.
(c) Find (or estimate) the P-value. Sketch the sampling distribution and show the area corresponding to the P-value.
(d) Based on your answers in parts (a)€“(c), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level α?
(e) Interpret your conclusion in the context of the application.
Assume that the distribution of differences is approximately normal.

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Understanding Basic Statistics

ISBN: 9781111827021

6th Edition

Authors: Charles Henry Brase, Corrinne Pellillo Brase

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