Chapter 9, Problem 2RE

Denomination Effect Construct the confidence interval that could be used to test the claim in Exercise 1. What feature of the confidence interval leads to the same conclusion from Exercise 1?

1. Denomination Effect In the article “The Denomination Effect” by Priya Raghubir and Joy deep Srivastava, Journal of Consumer Research, Vol. 36, researchers reported results from studies conducted to determine whether people have different spending characteristics when they have larger bills, such as a S20 bill, instead of smaller bills, such as twenty $1 bills. In one trial, 89 undergraduate business students from two different colleges were randomly assigned to two different groups. In the “dollar bill” group, 46 subjects were given dollar bills; the “quarter” group consisted of 43 subjects given quarters. All subjects from both groups were given a choice of keeping the money or buying gum or mints. The article includes the claim that “money in a large denomination is less likely to be spent relative to an equivalent amount in smaller denominations.” Test that claim using a 0.05 significance level with the following sample data from the study.