Question

8. (18 pts) A study wants to know whether there is a difference in objection to sharing information among the three groups of customers: customers of insurance companies, customers of pharmacies and customers of medical researchers. A sample of customers is selected for each group and the results are as follows: Organizational Grouping Object to Sharing Information Insurance Pharmacies Research Total Yes 40 80 90 210 No 160 120 110 390 Total 200 200 200 600 At the α = 0.025 level of significance, is there evidence of difference in objection to sharing information among the organizational groupings?

Answer 1

Here we need to use chi square test of independence.

H0: There is no  difference in objection to sharing information among the three groups of customers.

Ha: There is a difference in objection to sharing information among the three groups of customers.

Expected frequencies will be calculated as follows:

Following table shows the expected frequencies:

	Insurance	Pharmacies	Research	Total
Yes	70	70	70	210
No	130	130	130	390
Total	200	200	200	600

Following table shows the calculations for chi square test statistics:

O	E	(O-E)^2/E
40	70	12.85714286
160	130	6.923076923
80	70	1.428571429
120	130	0.769230769
90	70	5.714285714
110	130	3.076923077
Total		30.76923077

Following is the test statistics:

Degree of freedom: df =( number of rows -1)*(number of columns-1) = (2-1)*(3-1)=2

The p-value is : 0.0000

Since p-value is less than α = 0.025 level of significance so there is evidence of difference in objection to sharing information among the organizational groupings.