Question: Many communities worldwide are lamenting the effects of so-called big box retailers (e.g., Wal-Mart) on their local economies, particularly on small, independently owned shops. Do these large stores affect the bottom lines of locally owned retailers? Imagine that you decide to test this premise. You assess earnings at 20 local stores for the month of October, a few months before a big box store opens. You then assess earnings the following October, correcting for inflation.
a. What are the two populations?
b. What would the comparison distribution be? Explain.
c. What hypothesis test would you use? Explain.
d. Check the assumptions for this hypothesis test.
e. What is one flaw in drawing conclusions from this comparison over time?