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Step 2: Calculate the critical value, Z/2
Using the table of critical values for upper tailed tests, we can approximate the p-value. If we select
=0.05, the critical value is 1.960
Step 3: Decision
We reject H0 because 4.8 > 1.960.
Step 4: Probability of Rejection Ho
If we select =0.01 the critical value is 2.656, and we still reject H0 because 4.8 > 2.656. Therefore,
the smallest where we still reject H0 is 0.010. The two-tailed P value is less than 0.0001. By
conventional criteria, this difference is considered to be extremely statistically significant. Here we
are approximating the p-value and would report p < 0.010.
4.A drug manufacturing company conducted a survey of customers. The research question is: Is
there a significant relationship between packaging preference (size of the bottle purchased) and
economic status? There were four packaging sizes: small, medium, large, and jumbo. Economic
status was: lower, middle, and upper. The following data was collected. Please perform a Chi-
square test and explain your results. Please show each detailed step for calculations. You are
welcome to use software package to valid your results after your hand calculation.
Lower Middle Upper
Small 24 22 18
Medium 23 28 19
Large 18 27 29
Jumbo 16 21 33
Solution:
Data from the drug manufacturing companys survey as follows:
Page 4 of 6
The testing procedure is:
1- Null hypothesis.
H
0
: There is a significant relationship between packaging preference and economic status.
H
A :
There is no significant relationship between packaging preference and economic status.
2- Significance Level. =.05
3- Degree of Freedom = (r-1) (c-1) = (4-1)(3-1) = 6
4- Critical test Value : with d.f. =6 and =.05 , the critical test value is 12.59
5- Calculated value :
Expectation of (AB) = (A) (B)/ N
For 1
st
row and 1
st
column: 8164/278= 18.65
The table of Expected Frequencies corresponding to row and column shall be calculated
and shown as follows:
Package
Size
\Economic
Status
Lower Middle Upper Total
Small 24 22 18 64
Medium 23 28 19 70
Large 18 27 29 74
Jumbo 16 21 33 70
Total 81 98 99 278
Package
Size
\Economic
Status
Lower Middle Upper
Small 18.65 22.56 22.79
Medium 20.40 24.68 24.93
Large 21.56 26.09 26.35
Jumbo 20.40 24.68 24.93
Page 5 of 6
Calculation :
(O-E)
2
/E= 9.74
Interpretation: since the calculated value = 9.74 is very less than critical value = 12.59, so
we cannot reject the null hypothesis and conclude that there is a significant relationship
between packaging preference and economic status.
MiniTab Analysis Result:
11/19/2013 9:51:35 PM
Welcome to Minitab, press F1 for help.
Chi-Square Test: C1, C2, C3
Expected counts are printed below observed counts
C1 C2 C3 Total
1 24 22 18 64
18.65 22.56 22.79
2 23 28 19 70
20.40 24.68 24.93
3 18 27 29 74
21.56 26.09 26.35
4 16 21 33 70
20.40 24.68 24.93
Total 81 98 99 278
Chi-Sq = 1.536 + 0.014 + 1.007 +
0.333 + 0.448 + 1.410 +
0.588 + 0.032 + 0.266 +
O E (O-E)^2 (O-E)^2/E
24.00 18.65 28.65 1.54
23.00 20.40 6.78 0.33
18.00 21.56 12.68 0.59
16.00 20.40 19.32 0.95
22.00 22.56 0.31 0.01
28.00 24.68 11.05 0.45
27.00 26.09 0.83 0.03
21.00 24.68 13.51 0.55
18.00 22.79 22.96 1.01
19.00 24.93 35.14 1.41
29.00 26.35 7.01 0.27
33.00 24.93 65.16 2.61
Page 6 of 6
0.947 + 0.548 + 2.614 = 9.743
DF = 6, P-Value = 0.136
The Minitab results confirm the hand calculation analytical results. In addition, the Minitab predicts
that the probability for a significant relationship between packaging preference and economic status
is 0.136 or 13.6%, which is larger than alpha of 0.05 or 5%. Therefore, we have to accept the null
hypothesis.