Purchased Gum Kept tHe Money 16 Students Given Four Quarters Students Given a $1 Bill 27 12 34
Four Quarters the Same as $1? In a study of the “denomination effect,” 43 college students were each given one dollar in the form of four quarters, while 46 other college students were each given one dollar in the form of a dollar bill. All of the students were then given two choices: (1) keep the money; (2) spend the money on gum. The results are given in the accompanying table (based on “The Denomination Effect,” by Priya Raghubir and Joydeep Srivastava, Journal of Consumer Research, Vol. 36.) Use a 0.05 significance level to test the claim that whether students purchased gum or kept the money is independent of whether they were given four quarters or a $1 bill. Is there a “denomination effect”?
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