Robin Wendell has been offered a transfer from Pittsburgh to Boston, but is holding out for more money, “because the cost of living there is so much more.” Looking at a grocery receipt and deleting big-ticket items, Robin came up with 36 items under $2 with a mean of $0.98, standard deviation $0.43 in Pittsburgh. The recruiting manager stops by a Boston grocery store, and with the same $2.00 limit, buys 42 items, with a mean price of $1.07, standard deviation $0.38. Is Robin right that the cost of groceries is more in Boston than in Pittsburgh, at a confi dence level α = 0.01? What could be done to improve the analysis of cost of living in the two cities?
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