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T statistics
Students Pocket money(Rs.) Problem definition: we have
1 2500 chosen to approximate the
2 1500 pocket money of 15 students
3 1700 of our college because this
4 1000 was the most suitable
5 1500 measurement of t statistics
6 600 and was the most reliable
7 800 data that could be collected
8 700 from the college
9 2000 We have surveyed 15 people
10 800 about the pocket money they
11 1500 get. The average of it was
12 2500 1000. Use a 5% level of
13 2000 significance to determine if
14 4000 the average is more than
15 3500 what is quoted.
Scale of Data – ratio
Sampling – convenient
α- .05(because the sources of the collected data is reliable, so we did not assume a higher
level of error rate)
Justification for tool used –because the sample size is less than 30 so we use the t statistics
STEP 1: H0 : µ = 1000 (average of pocket money of 15 people is 1000)
Ha : µ>1000(average of pocket money is greater than 1000)
STEP 2 : The appropriate statistical test is
t = [ - µ]/(s/√ n)
STEP 3: α- .05
STEP 4: df = n-1
= 15 – 1
= 14.
One tail test
tc = t.05,14 = 1.761
decision is to reject the null hypothesis if the observed t statistics is greater than 1.761.
Step 5: data is as follows:
Sample standard deviation is calculated as follows:
STEP 8 : Business Implication: by the data gathered we could conclude that more than
60% people in our college are affected by recession, so we would also like to know the
further affects of recession and would also like to know the cure of the same
Mann-Whitney U test(large)
Do the Vodafone users have less monthly spending Reliance(R) Vodafone(VF)
on their mobiles as compared to reliance users? To
50 150
test this we have selected 2 groups of people: one
who use Vodafone and other who uses reliance. Use 100 130
the data and determine whether Vodafone users spend 111 250
less on their mobiles than reliance customers. α= .05
121 222
α= .05
Justification for tool used – because the population is large (greater than 10) and the two
samples are independent of each other, so we are using the MANN – WHITNEY U TEST
(LARGE)
Step1: H0:monthly expenditure of both groups, on mobile, is equal.
Ha: monthly expenditure of both groups, on mobile, is not equal.
Step 2: large sample Mann-Whitney U test is appropriate.
Step 3: alpha=0.05
Step 4:if the p value of sample statistics is < 0.05, decision is to
reject the null hypothesis
value Rank group value Rank group
50 1 R 333 12.5 R
121 4 R 350 16 R
123 5 VF 450 17 R
130 6 VF 500 18 R
150 7 VF 551 19 VF
250 10 VF 700 22 VF
300 11 R 850 23 VF
333 12.5 R
Step 5:Solving for U, µu, σu
U = n1*n2+ n1 (n1+1)/2 – w1
=81
µu = (n1*n2)/2
= (11*12)/2
= 66
σu= √[ n1*n2(n1+n2+1)/12]
= 16.24
Step6: : Observed z value is:
z= (U- µu)/ σu
= (81-66)/16.24
= .9236
Step 7: p value associated is 0.3212.
FINAL P VALUE = 0.5-0.3212
=0.1788
0.1788>0.05, hence the null hypothesis is accepted.
Step8:the monthly expenditure of both the groups is not equal, hence we need to
find out the shortcomings in the company’s policies, procedure, tarrif vouchers
offered, talk time provided. Because people are spending less on our company this
will thereby reduce the customer base of company, so we need to keep in pace
with the offers given by our competitors as well.