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The author recorded the leading digits of the sizes of the electronic document files for the current edition of this book. The leading digits have frequencies of \(55,25,17,24,18,12,12,3\), and 4 (corresponding to the leading digits of \(1,2,3,4,5,6,7,8\), and 9 , respectively). Using a \(0.05\) significance level, test for goodness-of-fit with Benford's law.

Short Answer

Expert verified
The leading digits of the document sizes follow Benford's law.

Step by step solution

01

- State the Hypotheses

Set up the null hypothesis \(H_0\) and the alternative hypothesis \(H_a\). The null hypothesis states that the leading digits follow Benford's law, and the alternative hypothesis states that they do not follow Benford's law.\[ H_0: \text{The leading digits follow Benford's law.} \]\[ H_a: \text{The leading digits do not follow Benford's law.} \]
02

- Calculate Expected Frequencies

Benford's law gives the expected proportion for each leading digit. Calculate the expected frequency for each digit by multiplying the total number of observations by the proportion given by Benford's law.The expected proportions are:\[ P(1) = \log_{10}(1 + \frac{1}{1}) \approx 0.301 \]\[ P(2) = \log_{10}(1 + \frac{1}{2}) \approx 0.176 \]\[ P(3) = \log_{10}(1 + \frac{1}{3}) \approx 0.125 \]\[ P(4) = \log_{10}(1 + \frac{1}{4}) \approx 0.097 \]\[ P(5) = \log_{10}(1 + \frac{1}{5}) \approx 0.079 \]\[ P(6) = \log_{10}(1 + \frac{1}{6}) \approx 0.067 \]\[ P(7) = \log_{10}(1 + \frac{1}{7}) \approx 0.058 \]\[ P(8) = \log_{10}(1 + \frac{1}{8}) \approx 0.051 \]\[ P(9) = \log_{10}(1 + \frac{1}{9}) \approx 0.046 \]Total observations: \ 55 + 25 + 17 + 24 + 18 + 12 + 12 + 3 + 4 = 170.Expected frequencies are calculated as: \(E_i = 170 \times P(i)\).\[ E(1) = 170 \times 0.301 \approx 51.17 \]\[ E(2) = 170 \times 0.176 \approx 29.92 \]\[ E(3) = 170 \times 0.125 \approx 21.25 \]\[ E(4) = 170 \times 0.097 \approx 16.49 \]\[ E(5) = 170 \times 0.079 \approx 13.43 \]\[ E(6) = 170 \times 0.067 \approx 11.39 \]\[ E(7) = 170 \times 0.058 \approx 9.86 \]\[ E(8) = 170 \times 0.051 \approx 8.67 \]\[ E(9) = 170 \times 0.046 \approx 7.82 \]
03

- Compute the Chi-Square Test Statistic

Use the chi-square goodness-of-fit test formula:\[ \chi^2 = \sum \frac{(O_i - E_i)^2}{E_i} \]Substitute the observed (O) and expected (E) frequencies:\[ \chi^2 = \frac{(55 - 51.17)^2}{51.17} + \frac{(25 - 29.92)^2}{29.92} + \frac{(17 - 21.25)^2}{21.25} + \frac{(24 - 16.49)^2}{16.49} + \frac{(18 - 13.43)^2}{13.43} + \frac{(12 - 11.39)^2}{11.39} + \frac{(12 - 9.86)^2}{9.86} + \frac{(3 - 8.67)^2}{8.67} + \frac{(4 - 7.82)^2}{7.82} \approx 14.56 \]
04

- Determine the Degrees of Freedom

The degrees of freedom (df) for the chi-square test is given by:\[ df = k - 1 = 9 - 1 = 8 \]
05

- Find the Critical Value and Make a Decision

Using a significance level of \(\alpha = 0.05\), look up the critical value in a chi-square distribution table for 8 degrees of freedom.The critical value is approximately \(15.51\).Compare the test statistic to the critical value:\[ \chi^2 = 14.56 \text{ and critical value} = 15.51 \]Since \(\chi^2 = 14.56\) is less than the critical value \(15.51\), we fail to reject the null hypothesis.

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Chi-square test
The chi-square test is a statistical method used to determine if there is a significant difference between the expected and observed frequencies in categorical data. By comparing what we observed against what we expected according to a theoretical distribution, we find a measure of how well the data fits the expected distribution. The formula for the chi-square statistic is given by: \( \chi^2 = \sum \frac{(O_i - E_i)^2}{E_i} \), where \( O_i \) represents the observed frequency and \( E_i \) represents the expected frequency. This helps us evaluate if any discrepancies are due to randomness or if they are statistically significant. If the computed chi-square value exceeds a critical value from the chi-square distribution table, we conclude that the difference is statistically significant.
Null hypothesis
In hypothesis testing, the null hypothesis (denoted as \( H_0 \)) represents a statement of no effect or no difference. It is the default assumption that there is no relationship between two measured phenomena. In the context of this exercise, the null hypothesis states that the leading digits of the document sizes follow Benford's law. In contrast, the alternative hypothesis (\( H_a \)) suggests that the leading digits do not follow Benford's law. We statistically test this hypothesis by looking at whether the observed data deviates significantly from the expected distribution.
Expected frequency
Expected frequency is what we expect the frequency of each category to be if the data follows a specific distribution. In this problem, we use Benford's law to determine these expected frequencies. Benford's law predicts that the leading digit d (from 1 to 9) appears with a frequency given by \( P(d) = \log_{10}(1 + \frac{1}{d}) \). Multiplying these proportions by the total number of observations gives us the expected frequencies for each digit. For instance, for the leading digit 1, the proportion is approximately 0.301, so the expected frequency is \( 170 \times 0.301 = 51.17 \). These expected frequencies serve as a baseline to which we compare the observed frequencies.
Degrees of freedom
Degrees of freedom (df) in a chi-square test are used to determine the critical value from the chi-square distribution table. The degrees of freedom are calculated as the number of categories (k) minus one. For this problem involving nine leading digits, the degrees of freedom are \( df = k - 1 = 9 - 1 = 8 \). These degrees of freedom are essential for finding the critical value that we compare our chi-square test statistic against. Higher degrees of freedom typically result in a higher critical value.
Critical value determination
Determining the critical value is a crucial step in hypothesis testing. The critical value is a threshold derived from the chi-square distribution table that the test statistic must exceed to reject the null hypothesis. For a given significance level (typically \( \alpha = 0.05 \)), and the degrees of freedom, we look up the critical value in the chi-square distribution table. In this problem, for 8 degrees of freedom and a significance level of 0.05, the critical value is approximately 15.51. If our calculated chi-square value (about 14.56) is less than this critical value, we fail to reject the null hypothesis, meaning there’s not enough evidence to say the digits do not follow Benford's law.

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Most popular questions from this chapter

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