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Business and Management There has been considerable discussion about dairy policy and the price…


Business and Management There has been considerable discussion about dairy policy and the price of milk in the United States. A recent report compared the Federal Agriculture Reform and Risk Management Act of 2013 (DSA) and the Dairy Freedom Act (DFA) on the price of milk (in dollars per cwt). A random sample of months was selected, and the price of milk was recorded for each.17 Assume the distribution of pairwise differences is continuous and symmetric.

a. Conduct a sign test to determine whether there is any evidence of a difference in the median milk prices under the two different pricing policies. Use a = 0.05.

b. Conduct a signed-rank test to determine whether there is any evidence of a difference in the median milk prices under the two different pricing policies. Use a = 0.05.

c. Compare your conclusions in parts (a) and (b). Which test do you think is more accurate? Why?

d. If you were a dairy farmer, which pricing policy would you prefer? Why?