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In an article in Marketing Science, Silk and Berndt investigate the output of advertising agencies. They describe ad agency output by finding the shares of dollar billing volume coming from various media categories such as network television, spot television, newspaper, radio, and so forth.
a) Suppose that a random sample of 400 U.S. advertising agencies gives an average percentage share of billing volume from network television equal to 7.46 percent with a standard deviation of 1.42 percent. Calculate a 95 percent confidence interval for the mean percentage share of billing volume from network television for the population of all U.S. advertising agencies.
b) Suppose that a random sample of 400 U.S. advertising agencies gives an average percentage share of billing volume from spot television commercials equal to 12.44 percent with a standard deviation of 1.55 percent. Calculate a 95 percent confidence interval for the mean percentage share of billing volume from spot television commercials for the population of all U.S. advertising agencies.
c) Compare the confidence intervals in part a) and b). Does it appear that the mean percentage share of billing volume from spot television commercials for the U.S. advertising agencies is greater than the mean percentage share of billing volume from network television? Explain.
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