5. Hypothesis testing and interval estimation

Consumers with at least one credit card have a mean of 4.84 credit cards. [Source:Sumit Agarwal, John C. Driscoll, Xavier Gabaix, and David Laibson, "Learning in the Credit Card Market," Working Paper 13822, National Bureau of Economic Research (NBER), February 2008.]

You want to test the hypothesis that the mean number of credit cards held by low-income consumers (consumers with annual incomes below $20,000) is different from the reported mean of 4.84.

A random sample of 200 low-income consumers provides a sample mean number of credit cards of xx= 2.89. Use a significance level of = 0.05 for the test. Use a confidence interval estimate approach to conduct the hypothesis test.

To use a confidence interval estimate approach to conduct the hypothesis test, you construct the ______ confidence interval estimate of the population mean.

Use the Distributions tool to help answer the questions that follow.

Assume that the population standard deviation is known and equal to 3.56, the standard deviation from the NBER study. Use the tool to compute the confidence interval estimate.

The confidence interval estimate is ________ to __________ .

Since the confidence interval estimate_______ ,_______ the null hypothesis (that the mean number of credit cards held by low-income consumers is 4.84) is_________ .