# Testing the Difference in Means Using MS Excel

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.