Is there a significant difference between the cost of a flig

Is there a significant difference between the cost of a flight on Priceline.com vs. the Airline\'s own website? A random sample of 17 flights were tracked on Priceline and the flight\'s airline website and the 95% confidence interval for the mean difference in price (Priceline - Airline Site) was (-172.15, -66.91). Which of the following is the appropriate conclusion?

a) We are 95% confident that the average difference in price is positive, with the higher price comeing from the Airline sites

b) We are 95% confident that the average difference in price is negative, with the higher price comeing from Priceline

c) We are 95% confident that the average difference in price is negative, with the higher price comeing from the Airline sites

d) There is no significant difference between the average price for the booking options

e) We are 95% confident that the average difference in price is positive, with the higher price comeing from Priceline

[Please explain]

Solution

The confidence interval found is (-172.15, -66.91). The price difference taken is priceline.com - airline own site. So we find that the mean difference is negative lying between -172.15 and -66.91 with a 95% confidence. So the right answer is (c) The price difference is negative with a 95% confidence with the price of the airline site being the higher one.

A 95% CI means that if we are to sample from the population 100 times and calculate the CI from each of the samples then 95 of these calculated CI s will cover the true value of the actual difference in price. Hence in this case the true value of the difference lies between -172.15 and -66.91(the CI calculated from the sample) with a 95% confidence. i.e the higher price is airline site price as the statistic used to find the CI is priceline.com price - airline site price. so answer (c) is correct.