The Department of Service Financing in the city of Belmont, NY has been experime

Question

The Department of Service Financing in the city of Belmont, NY has been experimenting with having city units provide services in house versus having private contractors provide the same services. In the city Grounds Department, half of the landscaping work is performed by city crews, whereas the other half is performed by a private landscaping firm. The city manager has collected random samples of weekly expense report data for both providers. He asks you to conduct a difference of mean test. What can the city manager conclude about the difference between in-house and private service provision.

I did a "t-Test: Paired Two Sample for Means: in Excel and came up with the following data (below). Is this the right step and if so what is the conclusion? Thanks

t-Test: Paired Two Sample for Means Variable 1 Variable 2 Mean 3486.84 3409.384 Variance 1104457.765 968912.5 Observations 125 125 Pearson Correlation -0.049611596 Hypothesized Mean Difference 0 df 124 t Stat 0.587055663 P(T<=t) one-tail 0.279116844 t Critical one-tail 1.65723497 P(T<=t) two-tail 0.558233687 t Critical two-tail 1.979280117

Explanation / Answer

The approach is correct.

Conclusion : Since this is a two-tail test , t critical two-tail i.e. 1.979280117 > t stat i.e. 0.587055663 so we fail to Reject Ho and conclude that there is no difference.

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