Test of Independence · Exercise 27

For each problem, use a solution sheet to solve the hypothesis test problem. Go to Appendix E for the chi-square solution sheet. Round expected frequency to two decimal places.

According to Dan Lenard, an independent insurance agent in the Buffalo, N.Y. area, the following is a breakdown of the amount of life insurance purchased by men in the following age groups. He is interested in whether the age of the man and the amount of life insurance purchased are independent events. Conduct a test for independence.

\begin{array}{|c|c|c|c|c|c|}\hline \text{Age of Men} & \text{None} & \text{< $200,000} & \text{}200,000–\\text{400,000} & \text{}401,001–\\text{1,000,000} & \text{$1,000,001+} \\ \hline \text{20–29} & \text{40} & \text{15} & \text{40} & \text{0} & \text{5} \\ \hline \text{30–39} & \text{35} & \text{5} & \text{20} & \text{20} & \text{10} \\ \hline \text{40–49} & \text{20} & \text{0} & \text{30} & \text{0} & \text{30} \\ \hline \text{50+} & \text{40} & \text{30} & \text{15} & \text{15} & \text{10} \\ \hline\end{array}

This exercise builds on another exercise in its source book, which isn't shown here.

OpenStax, Introductory Statistics 2e · §11.3 Test of Independence · Exercise 27