# What impact did the September 11 terrorist attack have on U.S. airline demand? An analysis was conducted

## Question:

What impact did the September 11 terrorist attack have on U.S. airline demand? An analysis was conducted by I to and Lee1 "Assessing the impact of the September 11 terrorist attacks on U.S. airline demand," in the Journal of Economics and Business (January-February 2005). They found a negative short-term effect of over 30% and an ongoing negative impact of over 7%. Suppose that we wish to test the impact by taking a random sample of 12 airline routes before and after 9/11. Passenger miles (millions of passenger miles) for the same routes were tracked for the 12 months prior to and the 12 months immediately following 9/11. Assume that the population of all possible µaired differences is normally distributed.
a. Set up the null and alternative hypotheses needed to determine whether there was a reduction in mean airline passenger demand.
b. Below we present the MINITAB output for the paired differences test. Use the output and critical values to test the hypotheses at the .101 .051 and .01 levels of significance. Has the true mean airline demand been reduced?

c. Use the p-value to test the hypotheses at the .10. .05. and .01 levels of significance. How much evidence is there against the null hypothesis?

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