# Inferential Statistics and Findings

Create an inferential statistics (hypothesis) test using the research question and two variables developed for the Week 2 Business Research Project Part 1 assignment. Include:
The research question
Mock data for the independent and dependent variables
Determine the appropriate statistical tool to test the hypothesis based on the research question.
Conduct a hypothesis test with a 95% confidence level, using the statistical tool.
Write an interpretation of no more than 350-words of the results and provide your findings.
Format your paper consistent with APA guidelines.
Submit both the spreadsheet and the paper to the Assignment Files tab.

Jennifer Carlson, Dave Hall, Tahnee Johnson, Nadya Sanchez, William K. Watson, Jane Winter

QNT/561

November 23, 2015

Derek Blythe

For decades, gas prices have fluctuated. While consumers are elated when gas prices fall, gas retailers are subjected to negative impacts with the decrease of gas prices. There are many factors that have an adverse effect on the price of gasoline. One of the most significant factors is fuel efficient hybrid and electric vehicles. With the inception of these types of vehicles, gas prices have been affected. To prove the hypothesis that profits are falling due to more hybrids and electric cars on the road requiring little or no gas, Gas Station X will examine its decrease of profits against the decline of gas prices.

Alternative fuel vehicles are having an indirect effect on the profits and, therefore, the future of the American gas station. At their peak in 2007, gas stations in the US sold 3.389 billion barrels of gasoline at the pump. That number fell to 3.185 billion barrels in 2012. With reduced sales rates like that, the small business gas station is being put out of business.

Alternative fueled vehicles are a huge factor in this decline. With 7,000 electric vehicles sold in April of 2013, a growing portion of the drivers on the roads stops at gas stations for snacks and bathroom breaks, indicating that gasoline consumption will most like never return to its peak levels. This means that gas stations, who already have a slim profit margin, will have to find other ways to make profits than at the pump.

The vehicles that consumers choose are directly related to the price of gas during the time that they are purchasing a vehicle (Jeihani & Sibdari, 2010). According to Jeihani & Sibdari (2010), “an uptick in the purchase of fuel-efficient vehicles start about two years after a significant increase in gas price.” The data shows that when there is a 10% increase in gas price, there is a 13.7 % decrease in demand for SUVs and a 9.1% increase in demand for Hybrid vehicles. Thus, the more hybrid vehicles that are on the road contributes to gas stations losing profits.

There’s no secret that profits are falling at Gas Station X. Looking deeper into why profits are falling is the task at hand. Through research, alternative fuel is gaining pace. Alternative fuel sources for cars can be found in app stores as well as gas station locations via the Internet. According to Beggs (2015), “through September 2014…the percentage of total sales at 2.88 percent was less than the previous year’s 3.32 percent.” Beggs continues to discuss the plug-in hybrid sales slightly increased in 2014 but total only comprises of one-third of 1 percent of sales. Diesel increased to .89 percent. Gas prices have decreased which in turn has decreased the sales of alternative fuel cars. According to this research, the average miles driven on the road is led by cars that operate solely on gasoline. This article does not support the hypothesis that alternative cars are the reason for the negative impact on gas sales at Gas Station X.

Upon first glance of the independent and dependent variables of Gas Station X, the research question was “Why are profits falling”. However, with further examination into the business problem of Gas Station X, a more significant question is Are hybrid and electric cars having an impact on the sales and profits of gasoline? It is apparent that the fuel efficient vehicles are having the greatest impact on the gasoline sales and profits of Gas Station X.

As we have discussed here, you can see there are some conflicting views on our week one scenario as to whether the introduction of hybrid and electric vehicles has had an effect on gasoline consumption. If the current trend continues as noted in our first article, of hybrid sales less than 1% then certainly gasoline consumption will not significantly be affected, and our theory would not be supported. However, the last article does show that there is a decrease in gasoline consumption. Is it related to hybrid vehicles? Perhaps, or maybe is it is something different altogether. We will have to look into this further, asking additional questions. The early research tells us that there is more to investigate on this subject and that there is a lot more story to tell and information to uncover.

References

Gross, D. (2013, May 5). The Daily Beast. Retrieved from            http://www.thedailybeast.com/articles/2013/05/05/farewell-to-the-gas-station-the-demise  of-a-car-culture-icon.html

Jeihani, M., & Sibdari, S. (2010). The Impact of Gas Price Trends on Vehicle Type Choice. Journal of Economics and Economic Education Research, 11(2), 1-11. Retrieved from http://search.proquest.com/docview/763256558?accountid=458

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