E x ample : opport u nit y cost FOU N DATION S OF IN FE R E N C E - PowerPoint PPT Presentation

E x ample : opport u nit y cost FOU N DATION S OF IN FE R E N C E Jo Hardin Instr u ctor

The st u d y Control gro u p (75 st u dents ) presented w ith t w o options : ( A ) B uy this entertaining v ideo ( B ) Not b uy this entertaining v ideo Treatment gro u p (75 st u dents ) presented w ith slightl y modi � ed option ( B ): ( A ) B uy this entertaining v ideo ( B ) Not b uy this entertaining v ideo . Keep the $14.99 for other p u rchases 1 Frederick S , No v emsk y N , Wang J , Dhar R , No w lis S . 2009. Opport u nit y Cost Neglect . Jo u rnal of Cons u mer Research FOUNDATIONS OF INFERENCE

State the h y potheses H : Reminding st u dents w ill ha v e no impact on their spending decisions 0 H : Reminding st u dents w ill red u ce the chance the y contin u e w ith a p u rchase A 1 Frederick S , No v emsk y N , Wang J , Dhar R , No w lis S . 2009. Opport u nit y Cost Neglect . Jo u rnal of Cons u mer Research FOUNDATIONS OF INFERENCE

The data B uy DVD Not b uy DVD Total Control gro u p 56 19 75 Treatment gro u p 41 34 75 Total 97 53 150 56/75 = 0.7467 41/75 = 0.5467 FOUNDATIONS OF INFERENCE

Let ' s practice ! FOU N DATION S OF IN FE R E N C E

Errors and their conseq u ences FOU N DATION S OF IN FE R E N C E Jo Hardin Instr u ctor

Opport u nit y cost concl u sion FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in h y pothesis testing FOUNDATIONS OF INFERENCE

Errors in US j u dicial s y stem FOUNDATIONS OF INFERENCE

Let ' s practice ! FOU N DATION S OF IN FE R E N C E

S u mmar y of opport u nit y costs FOU N DATION S OF IN FE R E N C E Jo Hardin Instr u ctor

Significance # Calculate the p-value opp_perm %>% summarize(pvalue = mean(stat <= diff_orig)) # A tibble: 1 × 1 pvalue <dbl> 1 0.007 FOUNDATIONS OF INFERENCE

Ca u sation St u d y w as randomi z ed ( i . e . indi v id u als w ere randoml y assigned the choices ) Nothing s y stematicall y di � erent abo u t participants in treatment and control gro u ps Therefore , an y di � erence in b uy ing rates is d u e to the options gi v en ( i . e . being reminded to sa v e ) FOUNDATIONS OF INFERENCE

Random sample 150 indi v id u als in the sample w ere not randoml y sampled from all people In order to generali z e , w e need more information abo u t the st u dents and w ho the y represent FOUNDATIONS OF INFERENCE

Let ' s practice ! FOU N DATION S OF IN FE R E N C E