Case Studies on Paired sample Test –

Case 4A: P/E Ratios for Nine Randomly Selected Companies -

Company 2001 P/E Ratio 2002 P/E Ratio

1 8.9 12.7

2 38.1 45.4

3 43.0 10.0

4 34.0 27.2

5 34.5 22.8

6 15.2 24.1

7 20.3 32.3

8 19.9 40.1

9 61.9 106.5

Questions:

a) At 95% level of significance, test there is difference between the P/E ratio of
year 2001 and 2002?

Case: 4B: Max New York Life Insurance & ICICI Prudential -
Max New York Life India and ICCI prudential India decided to conduct an
employee survey to find out the motivators for an effective performance. For this
purpose following attributes are used:

Rate the factors listed in the table on the following scale given below:

1. Very unimportant 2. Unimportant 3. Indifferent 4. Important

5. Very Important

Attributes Max New York (X) ICICI Prudential (Y)

Participations in the
decision Making Process
Clear communication,
assistance and support
provided by your
supervisors
Clarity in the objectives
and performance
expectations
Encouragement provided
to be creative, innovative
and to search a better
ways to get the job done
Regard and value attached
to its human resources by
the organization
Degree of responsibility,
freedom and
accountability
Extent of rules,
regulations, policies and
supervision
Job security
Remuneration/ take-home
salary
Learning

Question:
At 95% level of significance, test there is difference between the attributes of Max
New York Life India and ICCI prudential India performance.

Case 4C: Outdoor Lifestyle:

In a pretest, respondents were asked to express their preference for an outdoor lifestyle using a 7-
point scale; 1= not at all preferred, to 7 = greatly preferred (V1). They were also asked to
indicate the importance of the following variables on a 7-point scale: 1= not at all important, to 7
= very important.

V2 = Enjoying Nature, V3 = relating to the weather, v4 = living in harmony with the

environment, v5= exercising regularly, v6 = meeting other people.

The gender of the respondent (V7) was coded as 1 for females and 2 for males. The location of
residence (v8) was coded as; 1 = midtown/downtown, 2 = suburbs, and 3 = countryside. The data
are in the SPSS file.

Using SPSS, Please answer the following questions. In each case formulate the null hypothesis
and the alternative hypothesis and conduct the appropriate test (s).

a) Do the respondents attach more importance to enjoying nature than they do to relating to
the weather?
b) Do the respondents attach more importance to relating to the weather than they do to
meeting other people?
c) Do the respondents attach more importance to living in harmony with the environment
than they do to exercising regularly?

(‘More’ word means comparison so one-sided assumption)