Question

In an article in the Journal of Retailing, J. G. Blodgett, D. H. Granbois, and R. G. Walters investigated negative word-of-mouth consumer behavior. In a random sample of 201 consumers, 150 reported that they engaged in negative word-of-mouth behavior (for instance, they vowed never to patronize a retailer again). In addition, the 150 respondents who engaged in such behavior, on average, told 4.88 people about their dissatisfying experience (with a standard deviation equal to 6.11).

(a) Use these sample results to compute a 95 percent confidence interval for the proportion of all consumers who engage in negative word-of-mouth behavior. On the basis of this interval, would it be reasonable to claim that more than 70 percent of all consumers engage in such behavior? (Round your answers to 3 decimal places.)

The 95 percent confidence interval is [, ].
(Click to select)YesNo, the proportion could be (Click to select)belowabove 0.70.

(b) Use the sample results to compute a 95 percent confidence interval for the population mean number of people who are told about a dissatisfying experience by consumers who engage in negative word-of-mouth behavior. On the basis of this interval, would it be reasonable to claim that these dissatisfied consumers tell, on average, at least three people about their bad experience? Note: t _.025 = 1.98 when df =149. (Round your answers to 3 decimal places.)

The 95 percent confidence interval is [, ].
(Click to select)YesNo, the interval is (Click to select)abovebelow 3.

Answer 1

a)

95% confidence interval of population proportion

in percentage we can write it as 68.614 % to 80.646 %

as we see this 70% of consumers fall in this confidence interval so it is  reasonable to claim that more than 70 percent of all consumers engage in such behavior.

b)

population standard deviation is not given so we use T score in confidence interval

alpha=0.05

........by using T.INV.2T(0.05,149)

95% CI of the population mean =

we see lower limit of 95% CI is more than 3 so we can conclude with 95% confidence that dissatisfied consumers tell on average at least three people about bad experience .

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