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Statistics Discussion Questions

Please discuss the following:

As regional manager for a retail store, you want to determine if consumers' income levels are related to their spending pattern.

1. What statistical tool should you use?
2. If you have to select a sample of your store's customers based on gender, how can you determine if the sampling procedure is random?
3. Your research assistant has obtained data on two independent samples taken to compare consumers' ages. If you are not sure that the populations are normal, what test should you use?

Solution Preview

1. What statistical tool should you use?

I would use a regression analysis to see if there is a linear relationship between income and spending (i.e. the amount someone spent). If the correlation coefficient and the slope of the regression line are significantly different than 0, then you would assume that there is a relationship between income and saving.

If you want to see if people of different incomes spend different amounts on different categories of things (household items, clothing, toys, cars, etc.), I would use an ANOVA. The ANOVA would compare the incomes of people who bought items from the different categories ...

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