Question

2.3 Using a 0.05 alpha level, an F-test has been conducted to check if the two samples have equal or unequal variances. Excel returns the following table:

F-Test Two-Sample for Variances
	New Site Avg. Revenue Per Visitor	Old Site Avg. Revenue Per Visitor
Mean	$1 238,43	$570,63
Variance	$524743,33	$207230,17
Observations	30	30
df	29	29
F	2.532176
P(F<=f) one-tail	0.0073850
F Critical one-tail	1.8608114

What conclusions can be drawn from the results of the F-test, and what are the implications of these results? Justify your answer by referring to the relevant values in the table above. Your answer may not exceed 100 words.

Answer 1

Hypothesis :

H0 : 12 = 22 i.e. Two sample variances are equal.

H1: 1222 i.e. Two sample variances are unequal.

Test criterion -

We reject H0 if calculated F > F critical one tail.

In given problem, we have calculated F = 2.532176 & F critical one tail = 1.8608114.

So, calculated F > F critical one tail hence, we reject H0 at 5% level of significance.

Hence, two sample variances are unequal.