Question

In: Statistics and Probability

The president of the American Insurance Institute wants tocompare the yearly costs of auto insurance...

The president of the American Insurance Institute wants to compare the yearly costs of auto insurance offered by two leading companies. He selects a sample of 15 families, some with only a single insured driver, others with several teenage drivers, and pays each family a stipend to contact the two companies and ask for a price quote. To make the data comparable, certain features, such as the deductible amount and limits of liability, are standardized. At the .10 significance level, can we conclude that there is a difference in the amounts quoted?

20901610
16831247
14022327
18301367
9301461
6971789
17411621
11291914
10181956
18811772
8741527
15711375
15791767
15771636
8601188

Solutions

Expert Solution

Car Insurance (A) Mutual insurance (B) Difference (D=A-B)
2090 1610 480
1683 1247 436
1402 2327 -925
1830 1367 463
930 1461 -531
697 1789 -1092
1741 1621 120
1129 1914 -785
1018 1956 -938
1881 1772 109
1571 1375 196
874 1527 -653
1579 1767 -188
1577 1636 -59
860 1188 -328

Here, we should use the paired t-test because mid states car insurance and Gecko mutual insurance are dependent because both the data are selected from the same families.

orchestra answered 1 year ago
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