Question

	2005	2012
Response of Interest	Yes	Yes
Sample Size	450	450
Count for Response	90	72
Sample Proportion	0.2000	0.1600
Confidence Interval (in terms of 2005 - 2012)
Confidence Coefficient	0.90
Lower Limit	-0.0021
Upper Limit	0.0821
Hypothesis Test (in terms of 2005 - 2012)
Hypothesized Value
Pooled Sample Proportion	0.1800
Test Statistic
p-value (Lower Tail)
p-value (Upper Tail)
p-value (Two Tail)

	2005	2012
Response of Interest	Yes	Yes
Sample Size	450	450
Count for Response	90	72
Sample Proportion	0.2000	0.1600
Confidence Interval (in terms of 2005 - 2012)
Confidence Coefficient	0.90
Lower Limit	-0.0021
Upper Limit	0.0821
Hypothesis Test (in terms of 2005 - 2012)
Hypothesized Value
Test Statistic
p-value (Lower Tail)
p-value (Upper Tail)
p-value (Two Tail)

Oil wells are expensive to drill, and dry wells are a great concern to oil exploration companies. Aegis Oil, LLC took independent random samples of 450 wells drilled in 2005 and 450 wells drilled in 2012 to determine which ones were dry. If a sampled well was dry, a "Yes" was entered into Excel. Does the evidence suggest that the true proportion of dry wells in 2005 exceeds the true proportion of dry wells in 2012 by more than .01 at α=.1? Based on this paragraph of text, use the correct excel output above to answer the following question.

For the hypothesis stated above, what is the test statistic (in terms of "2005" minus "2012")?

	a.	1.1713
	b.	1.5639
	c.	None of the answers is correct
	d.	1.1729
	e.	1.5617

Answer 1

In the above problem

The null and alternative hypothesis is as

Ho : there is no evidence suggest that the true proportion of dry wells in 2005 exceeds the true proportion of dry wells in 2012 by more than .01

H1 ; there is evidence suggest that the true proportion of dry wells in 2005 exceeds the true proportion of dry wells in 2012 by more than .01

A) For 2005

n1 = sample size = 450

Count for reesponse = X1 = 90

sample proportion = p1 = 0.2000

B) For 2012

n2 = sample size = 450

Count for reesponse = X2 = 72

sample proportion = p2 = 0.1600

We use the formula of test statistic is

-------------(1)

We find is as

Using all values in equation (1)

For above hypothesis, the test statistic Z = 1.5617

We have to find P value (Upper Tail) using the following command in Excel

=1- NORMSDIST(Z)

here Z = 1.5617

=1 - NORMSDIST(1.5617) then press Enter key, We get

P value = 0.0592 (Round up to 4 decimal)

Using P value we take decision of null hypothesis is as below

1) P value < We reject Ho

2) P value We fail to reject Ho

In above problem = 0.1

Here, P value = 0.0592 < = 0.1

So, we reject Ho

There is evidence suggest that the true proportion of dry wells in 2005 exceeds the true proportion of dry wells in 2012 by more than .01