Question

In: Statistics and Probability

Sally (252.7, 374.5) Tim (247.7,395.3) The confidence intervals overlap, so is there enough evidence in what...

Sally (252.7, 374.5) Tim (247.7,395.3)

The confidence intervals overlap, so is there enough evidence in what we have calculated from the sample to conclude that Sally’s average price quote is statistically different from Tim’s. (Explain your answer

Solutions

Expert Solution

We see that Sally (252.7, 374.5) and Tim (247.7,395.3) confidence interval overlap

This does not mean that there is enough evidence that the prices quoted are statistically different

On the other hand if at 95% confidence ie alpha=0.05 we see that the confidence interval do not overlap for 2 independent values  

We can be certain that there is significant difference between the 2 values

The condition that if confidence interval do not overlap there is significant difference does not imply that if there is overlap there is no significanrt difference

We need to look at the complete data and the respective statitical parameters to come to the conclusion about the significant difference


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