A report shows that Covid-19 reduced household expenditure in Europe by 8% in 2020. Elsewhere, consumer spending also dropped significantly in 2020, with 4% seen in the United States, and 17% reported in China (Broom, 2021).

After reading the report, Mr Goh, a student of Singapore University of Social Sciences, was interested to find out how Covid-19 has affected the household spending in Singapore. Surprisingly, he found news saying that consumer spending among Singapore residents was resilient and at a similar level to 2019 (Choo, 2021).

In order to have a better understanding of the impact of Covid-19 on household spending of Singapore residents, Mr Goh decided to conduct a survey. He got a random sample of 32 students from Singapore University of Social Sciences, and collected data on their average monthly household expenditure in 2019 and 2020. Based on his own experience, he hypothesized that the household expenditure of Singapore residents in 2020 is lower than that in 2019.

The data is given in the Excel data file "BUS105_household expenditure (GBA)".

References:

Broom, D. (2021, Dec 06). This is how COVID-19 hit household expenditure in Europe. World Economic Forum. https://www.weforum.org/agenda/2021/12/pandemic-impact-europe-consumer-spending/

Choom Y. T. (2021, Apr 28). Consumer spending by Singapore residents last year at 2019 level despite Covid-19: MAS. The Straits Times. https://www.straitstimes.com/business/economy/singapore-resident-spending-in-2020-held-at-2019-level-gradual-price-increases

Question 1(a):

Apply an appropriate hypothesis test to determine if the household expenditure of Singapore residents in 2020 is lower than that in 2019, at the significance level of 1%. Examine the assumptions required to perform the test. Are these assumptions reasonable? To provide explanations.

Question 1(b):

Criticize the analysis done by Mr Goh by identifying three (3) concerns. How do I conduct the project if I have a free hand to study this research question starting from data collection to analysis.

Question 1(c):

Summarize the above analysis in a simplified report.