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Ex 6
Ex 6
1. The following data are average weekly rents (in pounds) payed by Local Authority tenants and Housing
Association tenants in 1995 for the 11 regions of England, Wales and Scotland (Source: Regional Trends,
1996).
Is there significant evidence that the mean rent payed by Local Authority tenants differs from that paid by
Housing Association tenants? (Use an appropriate significance test, following the procedure of Exercises
5, Question 2b.)
2. A market analyst is investigating the return on capital employed (measured as a percentage of the capital)
in the alcohol and tobacco production industries. The returns on capital for 20 international companies,
12 in alcohol production and 8 in tobacco production yielded the following summary statistics:
(a) What assumptions must be made to test the hypothesis that the mean return on capital employed is
the same in both industries, using a two-sample t-test? What would be the consequences of these
assumptions not holding?
(b) Assuming that these assumptions are satisfied, carry out this test, stating the null and alternative
hypotheses and the approximate P-value obtained (or a range in which it lies). State a short non-
technical conclusion.
3. The following data are the monthly sales over the past month (in pounds, to the nearest ten pounds) by
two groups of salesmen selling fax machines, one group of 8 salesmen had been set a sales target, the
other group of 6 had not.
(a) Is there any significant evidence that salesmen who are set such a target achieve a different mean
sales than those who are not? (Use a two sample t-test.)
(b) Draw a dot plot of the two samples of data, on the same scale. Label your figure informatively and
use it to comment on whether the assumptions of the test in (a) seem reasonable.
(c) Obtain a 95% confidence interval for the difference in mean sales for the two populations. Explain
briefly what the two notional populations are in this example. Interpret the confidence interval.
(d) Is your calculated confidence interval in (c) in line with your conclusion of (b)?