The president of a large company is in the process of deciding whether to adopt a lunch-time exercise program. The purpose of such programs is to improve the health of workers and, in so doing, reduce medical expenses. To get more information, he instituted an exercise program for the employees in one office. The president knows that during the winter months medical expenses are relatively high because of the incidence of colds and flu. Consequently, he decides to use a matched pairs design by recording medical expenses for the 12 months before the program and for 12 months after the program. The “before” and “after” expenses (in thousands of dollars) are compared on a month-to-month basis and shown here.

a. Do the data indicate that exercise programs reduce medical expenses? (Test with α = .05.)

b. Estimate with 95% confidence the mean savings produced by exercise programs.

c. Was it appropriate to conduct a matched pairs experiment?Explain.

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Jan Feb Mar Apr May Jun Month Before program6 44 30 58 35 33 After program Month Before program52 69 23 69 48 30 After program 59 42 20 6 25 30 Jul Aug Sep Oct Nov Dec 56 62 25 75 40 26