Question

Hair care products represent a multi-billion-dollar industry. According to Statista, over $55 billion annually. This same website reports that a survey conducted early in 2014 claims that from 28,869 American adults several households spent $500 or more on hair care products per month.

Is there evidence that Americans spend more than $500 a month in hair care products?

Let x = amount of money spent by a randomly selected household on hair care products for a given month.

Suppose a sample of 110 adults are selected at random from the 28,869 American adults that participated in the survey. Consider the following information presented in the (partial) Minitab printout below:

Variable MER , n 110 , Mean 490.3 , St.Dev 126.2  

Find the P-Value associated with the appropriate hypothesis test indicated in the problem above and state your conclusion.

Answer 1

Here we are given that

We want to test whether Americans spend more than $500 per month.

Null hypothesis:

Test statistic: follows a t distribution with n-1 df.

The p-value of the test is 0.789.

Since the p-value>0.05, we fail to reject the Null hypothesis and hence we conclude that there is not enough evidence to claim that the Americans spend more than $500 per month.