Case Study: Family Incomes

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A local council is interested in comparing family incomes of four of its 

suburbs for policy decisions. Local council has collected data on family 

incomes from random samples of families from the four suburbs. 

The data set is organised as follows: 

 

 Column 1; the annual family income in thousands of dollars. 

 Column 2; the suburb (1, 2, 3, 4) 

 

Assignment No. 2 

Tasks: 

 

1. Local Council wants to determine whether there is a significant 

difference in the family incomes in four suburbs. 

 

 Using an appropriate test determine whether there is a significant 

difference of the family incomes of the four suburbs using the given data 

set at 5% level of significance. 

 

 2. Some members of the Local Council believe that  (i) the average family income of suburb1 is higher than the average 

family income of suburb 4, and 

 

 (ii) there is no significant difference between the average family incomes 

of suburbs 3 and 4. 

 

 Use the data set to determine whether these beliefs are justified at 

level of significance of 1%. 

 

 3. Write a report to the Local Council incorporating your findings. 

 

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