Our parameter is the long-run mean difference (small minus large). In symbols:
\[ H_0 : \mu_d = 0 \\ H_a: \mu_d < 0 \]
## Small Large diff
## 1 33 41 -8
## 2 24 92 -68
## 3 35 61 -26
## 4 24 19 5
## 5 40 21 19
## 6 33 35 -2
## 7 88 42 46
## 8 36 50 -14
## 9 65 11 54
## 10 38 104 -66
## 11 28 97 -69
## 12 50 36 14
## 13 26 43 -17
## 14 34 62 -28
## 15 51 33 18
## 16 25 62 -37
## 17 26 32 -6
We can copy the Data into the Matched Pairs applet to get a simulation-based p-value and 2SD confidence interval.
Two options:
For paired data, the \(t\)-statistic is:
\[ t = \frac{\bar{x}_d - 0}{s_d/\sqrt{n}}\approx \frac{-10.88235 - 0}{36.30062/\sqrt{17}} \approx -1.236 \]
We can enter this \(t\)-statistic into the Matched Pairs applet to get a p-value.
Alternatively, we can use the Theory Based Inference Applet, and enter all the summary statistics. Here we use a test for One Mean.
MandMs <- read.table("http://www.isi-stats.com/isi/data/chap7/BowlsMMs.txt", header=TRUE)
t.test(MandMs$Small, MandMs$Large, paired = TRUE, alternative = "less")
##
## Paired t-test
##
## data: MandMs$Small and MandMs$Large
## t = -1.236, df = 16, p-value = 0.1171
## alternative hypothesis: true difference in means is less than 0
## 95 percent confidence interval:
## -Inf 4.488747
## sample estimates:
## mean of the differences
## -10.88235
There could be a number of reasons we didn’t get significant results.
We will have stronger evidence against the null (smaller p-value) when:
We will get a narrower confidence interval when:
In the Dutch auction the item for sale starts at a very high price and is lowered gradually until someone finds the price low enough to buy. In the first-price sealed bid auction each bidder submits a single sealed bid before a particular deadline. After the deadline, the person with the highest bid wins.
The researcher placed pairs of identical cards up for auction; one would go into the Dutch auction and the other to the first-price sealed bid auction. He then looked at the difference in the prices he received on the pair. He repeated this for a total of 88 pairs.
See the Preview exercise on WeBWorK
Theory-based methods of inference will work well for paired data if the population distribution of differences has a symmetric distribution, or you have at least 20 pairs (i.e., at least 20 differences) and the distribution of the sample differences is not strongly skewed. This test is known as a paired t-test.
Use the formula \(t = \frac{\bar{x}_d - 0}{s_d/\sqrt{n}}\) and record the value of the t-statistic. Do you think this value indicates strong evidence against \(H_0\)?
In the applet where you got the simulation-based p-value, choose t-statistic above the null distribution. Enter your t-statistic and click Count. Click overlay t-distribution. Record the theory-based p-value that appears in yellow. (If you do it wrong, you will get a warning.)
Use this form to enter a coherent sentence interpreting the endpoints of the confidence interval in the context of the problem.
Can you conclude causation? If yes, what causes what? If not, how are you deciding?
Can you extend the results of this study? Other kinds of cards? Other types of items? Anything sold in an auction format on the Internet? How are you deciding?
Suppose that the data only contained 22 pairs, instead of the original 88, but \(\bar{x}_d\) and \(s_d\) remained the same (as recorded in #1).
Predict how the t-statistic will change. Then compute the new t-statistic and see if you are right.
Predict how the p-value will change. Then use the Theory-Based Inference applet to get a new p-value.
Predict how the confidence interval will change. Then use the TBIA to get a new CI.
Let’s see what happens when we incorrectly use an independent samples t-test instead of a paired \(t\)-test.
Paste the data into the Theory-Based Inference applet, using the Two Mean scenario, and obtain a new p-value for the Two-Mean (independent samples) \(t\)-test. Compare with #4.
What are the consequences of using the wrong statistical analysis? What type of error do you risk making? Which test is more powerful?