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Testing the Difference in Means Using MS Excel

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Data Analysis

32. Consider a random sample of 100 households from a
middle-class neighborhood that was the recent focus
of an economic development study conducted by the
local government. Specifically, for each of the
100 households, information was gathered on each of
the following variables: family size, location of the
household within the neighborhood, an indication of
whether those surveyed owned or rented their home,
gross annual income of the first household wage
earner, gross annual income of the second household
wage earner (if applicable), monthly home mortgage
or rent payment, average monthly expenditure on utilities,
and the total indebtedness (excluding the value of
a home mortgage) of the household. The data are in
the file P09_26.xlsx.
Test for the existence of a significant difference
between the mean indebtedness levels of the households
in the first (i.e., SW) and second (i.e., NW)
sectors of this community. Perform similar hypothesis
tests for the differences between the mean indebtedness
levels of households from all other pairs of locations
(i.e., first and third, first and fourth, second and
third, second and fourth, and third and fourth).
Summarize your findings.

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Solution Summary

Three problems of testing the difference of means of two samples are solved. The general procedure for the conduct of this test using M.S Excel is also provided.