Question

Organizations such as J.D. Power and Associates use the proportion of owners likely to repurchase a particular automobile as an indication of customer loyalty for the automobile. An automobile with a greater proportion of owners likely to repurchase is concluded to have greater customer loyalty.

A study was conducted to compare the customer loyalty for three automobiles: Chevrolet Impala, Ford Fusion, and Honda Accord. The study contained 500 respondents and the data is summarized in the Microsoft Excel Online file below. Use the spreadsheet to perform the required calculations and hypothesis test.

1. Enter the values from the expected frequency table (to 2 decimals if necessary).

   	Chevrolet Impala	Ford Fusion	Honda Accord	Total
   Yes
   No
   Total

2. What is the value of the test statistic (to 2 decimals)?

   (___)

3. What is the ?-value (to 4 decimals)?
   
   (___)
   
   Observed

4. 	Chevrolet	Ford	Honda	Total
   Yes	69	120	123
   No	56	80	52
   Total

Answer 1

Null and Alternative Hypotheses

The following null and alternative hypotheses need to be tested:

H0​: The two variables are independent

Ha​: The two variables are dependent

This corresponds to a Chi-Square test of independence.