Question

An article in a 2006 issue of Journal of Behavioral Decision Making reports on a study involving 47 undergraduate students in a class at Harvard. All of the participants were given $50, but some (chosen at random) were told that this was a "tuition rebate," while the others were told that this was "bonus income." After one week, the students were contacted again and asked how much of the $50 they had spent and how much they had saved. Those in the "rebate" group had spent an average of $22.04, while those in the "bonus" group had spent an average of $9.55. If the difference in average spending amounts between the two groups is determined to be statistically significant, would it be legitimate to draw a cause-and-effect conclusion between what the money was called and how much was spent

Answer 1

Answer: Yes

Explanation:

If the difference in average spending amounts between the two groups is determined to be statistically significant, it would be legitimate to draw such a conclusion.

Why?

Those who were told that it was a Tuition rebate, a reward of sorts, had spent on average, $22.04 whilst those who thought it was simply bonus income had spent significantly less at $9.55.

This means that indeed there is a CAUSE and EFFECT conclusion to be drawn between what the money was called and how much was spent because it is clear that when called a tuition rebate, more of it is spent as opposed to it being called a Bonus income.