Question

Below is the output for monthly salaries for recent business interns by region, Los Angles (LA) and San Francisco (SF).

t.test(Amount ~ Location, data = money)

##
## Welch Two Sample t-test
##
## data: Amount by Location
## t = -1.25, df = 223.89, p-value = 0.0789
## alternative hypothesis: true difference in means is not equal to 0
## 95 percent confidence interval:
## -4.09 4.09
## sample estimates:
## mean in group LA mean in group SF
##        2343       2367

1. What type of inferential technique was implemented in the code above?
2. What is the null and alternative hypotheses (Symbols and Words)?
3. What is the test statistic?
4. State the appropriate assumptions.
5. What is the p-value?
6. What should happen to the null hypothesis?

Answer 1

a) Student independent sample 't' test was used for testing the mean significance difference between two groups.

b) H_o: (OR)

H_o: There is no mean difference in monthly salaries for recent business interns by region, Los Angles (LA) and San Francisco (SF).

Against

H_a: (OR)

H_a: There is a mean difference in monthly salaries for recent business interns by region, Los Angles (LA) and San Francisco (SF).

c) t-statistic = -1.25

d) Assumptions:

1) The variable must be measured at either interval or ratio level of measurement

2) The two groups from which you collect the data must be independent of one another.

3) The data must be normally distributed.

4) The variance in the population must be equal for both the groups.

e) P-Value = 0.0789

f) Here P = 0.0789 > 0.05

Hence we fail to reject the null hypothesis.