You wish to test the claim that Washington residents (Group 2) have a higher average monthly bill for their health insurance than Idaho residents (Group 1) at a significance level of a=0.02. Ho: H1 - H2 = 0 Ha: H1 – µ2 < 0 You believe both populations are normally distributed, but you do not know the standard deviations for either or that they have the same standard deviation. You obtain a sample of size 21 with a mean of 87.6 and a standard deviation of 9.5 from the Idaho residents. You obtain a sample of size 13 with a mean of 97.5 and a standard deviation of 10.5 from the Washington residents. a) What is the test statistic? b) What is the p-value? c) Explain the conclusion in the context of the problem.

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
icon
Related questions
icon
Concept explainers
Topic Video
Question

help!

### Statistical Analysis of Health Insurance Costs: Washington vs Idaho Residents

#### Problem Statement:
You wish to test the claim that Washington residents (Group 2) have a higher average monthly bill for their health insurance than Idaho residents (Group 1) at a significance level of α = 0.02.

#### Hypotheses:
- Null Hypothesis (H₀): μ₁ - μ₂ = 0
- Alternative Hypothesis (Hₐ): μ₁ - μ₂ < 0

You believe both populations are normally distributed, but you do not know the standard deviations for either group, nor that they have the same standard deviation.

#### Data Collection:
- **Idaho Residents**:
  - Sample Size (n₁): 21
  - Sample Mean (x̄₁): 87.6
  - Sample Standard Deviation (s₁): 9.5

- **Washington Residents**:
  - Sample Size (n₂): 13
  - Sample Mean (x̄₂): 97.5
  - Sample Standard Deviation (s₂): 10.5

#### Questions:
a) What is the test statistic?

b) What is the p-value?

c) Explain the conclusion in the context of the problem.

#### Answers Explanation:

a) **Test Statistic Calculation**:
To find the test statistic for unequal variances, use the following formula for two-sample t-tests:

\[ t = \frac{(x̄₁ - x̄₂) - (μ₁ - μ₂)}{\sqrt{\frac{s₁²}{n₁} + \frac{s₂²}{n₂}}} \]

Given that μ₁ - μ₂ = 0 under the null hypothesis:

\[ t = \frac{(87.6 - 97.5)}{\sqrt{\frac{9.5²}{21} + \frac{10.5²}{13}}} \]
\[ t = \frac{10.1}{\sqrt{\frac{90.25}{21} + \frac{110.25}{13}}} \]
\[ t = \frac{10.1}{\sqrt{4.2976 + 8.4807}} \]
\[ t = \frac{10.1}{\sqrt{12.7783}} \]
\[ t = \frac{10.1}{
Transcribed Image Text:### Statistical Analysis of Health Insurance Costs: Washington vs Idaho Residents #### Problem Statement: You wish to test the claim that Washington residents (Group 2) have a higher average monthly bill for their health insurance than Idaho residents (Group 1) at a significance level of α = 0.02. #### Hypotheses: - Null Hypothesis (H₀): μ₁ - μ₂ = 0 - Alternative Hypothesis (Hₐ): μ₁ - μ₂ < 0 You believe both populations are normally distributed, but you do not know the standard deviations for either group, nor that they have the same standard deviation. #### Data Collection: - **Idaho Residents**: - Sample Size (n₁): 21 - Sample Mean (x̄₁): 87.6 - Sample Standard Deviation (s₁): 9.5 - **Washington Residents**: - Sample Size (n₂): 13 - Sample Mean (x̄₂): 97.5 - Sample Standard Deviation (s₂): 10.5 #### Questions: a) What is the test statistic? b) What is the p-value? c) Explain the conclusion in the context of the problem. #### Answers Explanation: a) **Test Statistic Calculation**: To find the test statistic for unequal variances, use the following formula for two-sample t-tests: \[ t = \frac{(x̄₁ - x̄₂) - (μ₁ - μ₂)}{\sqrt{\frac{s₁²}{n₁} + \frac{s₂²}{n₂}}} \] Given that μ₁ - μ₂ = 0 under the null hypothesis: \[ t = \frac{(87.6 - 97.5)}{\sqrt{\frac{9.5²}{21} + \frac{10.5²}{13}}} \] \[ t = \frac{10.1}{\sqrt{\frac{90.25}{21} + \frac{110.25}{13}}} \] \[ t = \frac{10.1}{\sqrt{4.2976 + 8.4807}} \] \[ t = \frac{10.1}{\sqrt{12.7783}} \] \[ t = \frac{10.1}{
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Angles, Arcs, and Chords and Tangents
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman