Example: opportunity cost

Foundations of Inference in R

Jo Hardin

Instructor

The study

  • Control group (75 students) presented with two options:

    • (A) Buy this entertaining video
    • (B) Not buy this entertaining video

  • Treatment group (75 students) presented with slightly modified option (B):

    • (A) Buy this entertaining video
    • (B) Not buy this entertaining video. Keep the $14.99 for other purchases
1 Frederick S, Novemsky N, Wang J, Dhar R, Nowlis S. 2009. Opportunity Cost Neglect. Journal of Consumer Research
Foundations of Inference in R

State the hypotheses

  • $H_0$: Reminding students will have no impact on their spending decisions
  • $H_A$: Reminding students will reduce the chance they continue with a purchase
1 Frederick S, Novemsky N, Wang J, Dhar R, Nowlis S. 2009. Opportunity Cost Neglect. Journal of Consumer Research
Foundations of Inference in R

The data

Buy DVD Not buy DVD Total
Control group 56 19 75
Treatment group 41 34 75
Total 97 53 150

 

56/75 = 0.7467

41/75 = 0.5467

Foundations of Inference in R

Let's practice!

Foundations of Inference in R

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