Question

An insurance company selected samples of clients under 18 years of age and over 18 and recorded the number of accidents they had in the previous year. The results are shown below.
Under Age of 18 Over Age of 18
n1 = 500 n2 = 600
Number of accidents = 180 Number of accidents = 150
We are interested in determining if the accident proportions differ between the two age groups.
Q1. Let P, represent the proportion under and p, the proportion over the age of 18. The null hypothesis is:_____.
a. pu - po < 0.
b. pu - po > 0.
c. pu - P ≠ 70.
d. Pu - Po = 0.
Q2. The 95% confidence interval for the difference between the two proportions is:____.
a. (150, 180).
b. (0.25, 0.36).
c. (0.055, 0.165).
d. (0.045, 0.175).

Answer 1

Answer:

Q1 z(s) is in the rejection region for H₀ ; we reject H₀. We can´t support the that means have no difference

Q2  CI 95 %  =  (  0,056 ;  0,164 )

Step-by-step explanation:

Sample information for people under 18

n₁  =  500

x₁ =  180

p₁  =  180/ 500    p₁  =  0,36    then  q₁  =  1 -  p₁     q₁ =  0,64

Sample information for people over 18

n₂  =  600

x₂  =  150

p₂  =  150 / 600   p₂ =  0,25   then   q₂  =  1 - p₂   q₂ =  1 - 0,25   q₂ = 0,75

Hypothesis Test

Null hypothesis                        H₀              p₁  =  p₂

Alternative Hypothesis           Hₐ              p₁  ≠  p₂

The alternative hypothesis indicates that the test is a two-tail test.

We will use the approximation to normal distribution of the binomial distribution according to the sizes of both samples.

Testin at CI =  95 %    significance level is  α = 5 %   α  =  0,05  and

α/ 2  =  0,025   z (c) for that α  is from z-table:

z(c) = 1,96

To calculate   z(s)

z(s)  =  ( p₁  -   p₂ ) / EED

EED = √(p₁*q₁)n₁  +  (p₂*q₂)/n₂

EED = √( 0,36*0.64)/500  +  (0,25*0,75)/600

EED = √0,00046  +  0,0003125

EED = 0,028

( p₁  -  p₂  )  =  0,36  -  0,25  = 0,11

Then

z(s)  =  0,11 / 0,028

z(s) = 3,93

Comparing  z(s) and  z (c)    z(s) > z(c)

z(s) is in the rejection region for H₀ ; we reject H₀. We can´t support the idea of equals means

Q2  CI  95 %   =  (  p₁  -  p₂  ) ±  z(c) * EED

CI 95%  =  ( 0,11   ±  1,96 * 0,028 )

CI 95%  = (  0,11  ±  0,054 )

CI 95 %  =  (  0,056 ;  0,164 )