EXAMPLE 6.9

Parent income contribution by school type. Sallie Mae’s study also reports that the parents’ current income contribution among undergraduates going to a four-year public or four-year private college. The parents’ contribution averages $4444 among undergraduates at public colleges, while it is $6083 among undergraduates at private schools. Do parents pay more of their current income for undergraduates going to private schools? The observed difference is $1639, but as we learned in the previous example, an observed difference in means is not necessarily sufficient for us to conclude that the population means are different.

Again, we answer this question with a probability calculated under the assumption that there is no difference in the population means. The probability is 0.0001 of observing a difference in mean contributions that is $1639 or more when there really is no difference. Because this probability is so small, we have sufficient evidence in the data to conclude that the average current income contribution of parents is higher for undergraduates going to a private school than undergraduates going to a public school.