Question

I do not have anything to measure this question with in my line of work, how do I do this problem?

Review the example provided for the panel data in Figure 10.5 and post your thoughts on the application of the dependent sample tests in your business context. Review the example provided for the panel data in Figure 10.5 and post your thoughts on the application of the dependent sample tests in your business context.

TABLE 10.5 P/E Ratios for Nine Randomly Selected Companies

Company	Year 1 P/E Ratio	Year 2 P/E Ratio
1	8.9	12.7
2	38.1	45.4
3	43.0	10.0
4	34.0	27.2
5	34.5	22.8
6	15.2	24.1
7	20.3	32.3
8	19.9	40.1
9	61.9	106.5

Answer 1

The dependent tests are used to compare two variables or more than two variables when the sampled units are the same and the observations are taken two times or more than two times on those units.

For the given data in Table 10.5, the dependent samples t-test can be used to compare the Year 1 P/E Ratio and Year 2 P/E Ratio for the companies 1 to 9. Here, dependent t test is the best choice because the P/E Ratio is calculated for the same company two times. Hence we will apply a dependent t test to make the comparison between P/E Ratio of two years.