Essay title: Hypothesis Testing
When I was writing my research proposal there were several topics that had to be addressed before I could draw any conclusions or figure out any solutions to my problem statement.
The first step was to evaluate my grocery spending. I did this by keeping records of our spending over a four week period. I found out that my wife and I spend $197.11 on average a week. After I entered the information into an excel spreadsheet I then ran descriptive statistics to determine the mean, standard deviation and other statistics. After doing that I was able to estimate how much we spend on groceries for the week, month and year. I also looked at the grocery receipts to see where we could cut some costs. I determined that we could save $16 easily every week just by cutting out non-essential items.
What all this information meant to my wife and I was pretty important because we would like to save more money to pay for items associated with having a baby. We were also curious to see were our spending ranked with the average American family. By using hypothesis testing I will be able to see were we rank and then maybe we can adjust our grocery spending again. We would also like to see were our projected savings ranks to the average household.
1. The average American family spends $150 per week (WikiAnswers, 2006). According to this data can I determine that we spend more then the average family. Where do we stand in comparison to the average family?
H0: π≥ $150
HA: π≠ $150
Since there were only nine observations during the four week period, I will perform a T- test to help prove my results.
2. Another aspect of the observation looked at how much is spent dining out. According to the research proposal we spent $68.11 on average per month on dining out. Based on this we wanted to see if we spent less then the average family on dining out. The average family spent $720(Consumer Credit Counseling Service [CCCS], 2007)
H0: π ≤ $720
HA: π ≠ $720
Again since there are less than 30 observations I will be performing a T- test.
3. Through research I found out that the average family saves 1% of there income per year (Worldwide Success [WS], 2006).According to my research proposal I figured out we could save $832 dollars per