Consider the data on income distributions for households in California and Wisconsin given in the following table. Using the 5% significance level, test the null hypothesis that the distribution of households with regard to income levels is similar (homogeneous) for the two states. California Wisconsin High Income Medium Income Low Income 70 34 80 40 100 76

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Consider the data on income distributions for households in California and Wisconsin given in the
following table. Using the 5% significance level, test the null hypothesis that the distribution of
households with regard to income levels is similar (homogeneous) for the two states.
California
Wisconsin
High Income
Medium Income
70
34
80
40
Low Income
100
76
1. State the null and alternate hypothesis.
Ho:
HA:
2. Select the distribution to use.
3. Determine the rejection region.
4. Determine the degrees of freedom.
df = (r – 1)(c – 1)
(row total)(column total)
5. Create a table of expected counts E =
table total
California
Wisconsin
High Income
Medium Income
Low Income
6. Calculate the test statistic and determine the p-value.
(0 - E)2
x2 =
E
7. State your decision and summarize your conclusion in the context of the problem.
国
Transcribed Image Text:Consider the data on income distributions for households in California and Wisconsin given in the following table. Using the 5% significance level, test the null hypothesis that the distribution of households with regard to income levels is similar (homogeneous) for the two states. California Wisconsin High Income Medium Income 70 34 80 40 Low Income 100 76 1. State the null and alternate hypothesis. Ho: HA: 2. Select the distribution to use. 3. Determine the rejection region. 4. Determine the degrees of freedom. df = (r – 1)(c – 1) (row total)(column total) 5. Create a table of expected counts E = table total California Wisconsin High Income Medium Income Low Income 6. Calculate the test statistic and determine the p-value. (0 - E)2 x2 = E 7. State your decision and summarize your conclusion in the context of the problem. 国
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