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5-Step Hypothesis

Domestic Imported t-Test: Two-Sample Assuming Equal Variances
23.197 20.454
23.372 26.651 Domestic Imported
23.591 27.453 Mean 25.8462 21.64134
30.872 17.266 Variance 18.3941306 12.91803027
19.587 18.021 Observations 30 50
23.169 28.683 Pooled Variance 14.9540163
35.851 19.251 Hypothesized Mean Difference 0
24.285 20.047 df 78
25.277 24.324 t Stat 4.70839893
24.533 24.609 P(T<=t) one-tail 5.3292E-06
27.443 28.67 t Critical one-tail 1.66462464
23.657 15.546 P(T<=t) two-tail 1.0658E-05
20.895 15.935 t Critical two-tail 1.99084704
23.765 19.873
32.277 25.251
24.052 28.034
25.799 19.889
35.925 20.004
20.356 17.357
21.722 20.155
26.285 19.688
27.896 26.613
32.492 20.203
21.74 25.783
22.374 26.661
25.449 20.642
28.337 21.981
30.655 15.794
26.237 18.263
24.296 17.399
17.968
21.442
19.331
22.817
19.766
20.633
20.962
22.845
29.076
18.89
24.571
20.642
23.613
24.22
22.442
17.891
20.818
20.445
21.556
21.639

Whitner Autoplex Data Set legend.

X1: Selling price in dollars
X2: Selling price in thousands of dollars
X3: Age of buyer
X4: 0=Domestic, 1=Imported
80 Autos Sold

Hypothesis
1) Formulate both a numerical and verbal hypothesis statement regarding your research issue.
2) Perform the five-step hypothesis test on data pertaining to your selection.

Answer

H0: There is no significant difference in the mean selling price of domestic and imported cars (µ1=µ2)

H1: There is significant difference in the mean selling price of domestic and imported cars.

The test statistic used is independent sample t test.
where
Significance level &#61537; =0.05

Decision rule : Reject the null hypothesis, if the calculated value of test statistic is greater than the critical value.

Details
t-Test: Two-Sample Assuming Equal Variances

Domestic Imported
Mean 25.8462 21.64134
Variance 18.3941306 12.91803027
Observations 30 50
Pooled Variance 14.9540163
Hypothesized Mean Difference 0
df 78
t Stat 4.70839893
P(T<=t) one-tail 5.3292E-06
t Critical one-tail 1.66462464
P(T<=t) two-tail 1.0658E-05
t Critical two-tail 1.99084704

Conclusion: Reject the null hypothesis, the sample provides enough evidence to support the claim that there is significant difference in the mean selling price of domestic and imported cars.

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Solution Summary

The solution examines a five step hypothesis test. A decision rule is given.

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