# Question

A department store sampled the purchase amounts (in dollars) of 50 customers during a recent Saturday sale. Half of the customers in the sample used coupons, and the other half did not. The data identify the group using a variable coded as -1 for those who did not use a coupon and +1 for those who did use a coupon. The plot at the top of the next page shows the data along with the least squares regression line.

(a) Interpret the estimated intercept, slope, and value of se.

(b) Should managers conclude that customers who use coupons spend statistically significantly more than those who do not?

(c) Suppose the comparison had been done using a pooled two-sample t-test. What would be the value of the t-statistic?

(d) Suppose the comparison had been done using a dummy variable (coded as 1 for coupon users and 0 otherwise) rather than the variable Coupon Status. Give the values of b0, b1, and the t-statistic for the estimated slope.

(a) Interpret the estimated intercept, slope, and value of se.

(b) Should managers conclude that customers who use coupons spend statistically significantly more than those who do not?

(c) Suppose the comparison had been done using a pooled two-sample t-test. What would be the value of the t-statistic?

(d) Suppose the comparison had been done using a dummy variable (coded as 1 for coupon users and 0 otherwise) rather than the variable Coupon Status. Give the values of b0, b1, and the t-statistic for the estimated slope.

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