Researchers for an advertising company are interested indetermining if people are more likely to spend more money on beerif advertisers put more beer ads on billboards in a neighborhood inPhiladelphia. They estimate that 250 people will view theirbillboard in one week. They determine that the total number ofresidents in the neighborhood is 600. So, the residents who havenot viewed the billboard are in the control group. The researchersdetermine that those who did view the ads spent $24 per week onbeer and those who did not view the ads spent $16 per week onbeer.
- Calculate the treatment effect.
- Calculate the standard error (hint: the researchers determinedthe Std. Dev. for the control is $1.3 and the Std. Dev. for thetreatment is $0.90)
- Calculate the t-statistic.
- Can we reject OR fail to reject the null hypothesis? Explainwhy.
