3 An economist is conducting a study on the spending habits

3. An economist is conducting a study on the spending habits of undergraduate college students. They tracked the spending of 15 randomly chosen students. The distribution of the spending is shown below (based on a much larger sample at a different university). Would it be appropriate to use a t-distribution to construct a confidence interval for mean spending with a sample size of 15? Explain why or why not. (4 pts)

Solution

Since sample size is small, we need to have population normal to use t distribution. It does not seem appropriate because we QQ plot shows large deviation of points from the line, and population is likely not normal. We cannot use t-distribution.