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In a sample of \({\rm{1000}}\) randomly selected consumers who had opportunities to send in a rebate claim form after purchasing a product, \({\rm{250}}\) of these people said they never did so. Reasons cited for their behaviour included too many steps in the process, amount too small, missed deadline, fear of being placed on a mailing list, lost receipt, and doubts about receiving the money. Calculate an upper confidence bound at the \({\rm{95\% }}\)confidence level for the true proportion of such consumers who never apply for a rebate. Based on this bound, is there compelling evidence that the true proportion of such consumers is smaller than \({\rm{1/3}}\)? Explain your reasoning

Short Answer

Expert verified

Yes, there is compelling evidence.

Step by step solution

01

To explain the reasoning

Denote with

\(\begin{array}{l}{\rm{\bar p - }}\left( {\frac{{{\rm{\hat p + z}}_{{\rm{\alpha /2}}}^{\rm{2}}}}{{{\rm{2n}}}}} \right){\rm{/}}\left( {{\rm{1 + }}\frac{{{\rm{z}}_{{\rm{\alpha /2}}}^{\rm{2}}}}{{\rm{n}}}} \right)\\{\rm{\hat q - 1 - \hat p}}{\rm{.}}\end{array}\)

A confidence interval for a

population proportion

p with confidence level approximately\({\rm{100(1 - \alpha )}}\)is

\(\left( {{\rm{\tilde p - }}{{\rm{z}}_{{\rm{\alpha /2}}}}{\rm{ \times }}\frac{{\sqrt {{\rm{\hat p\hat q/n + z}}_{{\rm{\alpha /2}}}^{\rm{2}}{\rm{/4}}{{\rm{n}}^{\rm{2}}}} }}{{{\rm{1 + z}}_{{\rm{\alpha /2}}}^{\rm{2}}{\rm{/n}}}}{\rm{,\bar p + }}{{\rm{z}}_{{\rm{\alpha /2}}}}{\rm{ \times }}\frac{{\sqrt {{\rm{\hat p\hat q/n + z}}_{{\rm{\alpha /2}}}^{\rm{2}}{\rm{/4}}{{\rm{n}}^{\rm{2}}}} }}{{{\rm{1 + z}}_{{\rm{\alpha /2}}}^{\rm{2}}{\rm{/n}}}}} \right)\)

This is also called a score\({\rm{Cl for p}}\)

By replacing\({{\rm{z}}_{{\rm{\alpha /2}}}}{\rm{with }}{{\rm{z}}_{\rm{\alpha }}}{\rm{ and in \pm }}\) only 鈥 or + stand, the large-sample upper confidence bound for\({\rm{\mu }}\)and the large-sample lower confidence bound for\({\rm{\mu }}\)are obtained.

The upper confidence bound at the\(95\% \)confidence level for the true proportion can be computed using

\({\rm{\bar p + }}{{\rm{z}}_{{\rm{\alpha /2}}}}{\rm{,}}\frac{{\sqrt {{\rm{\hat p\hat q/n + z}}_{{\rm{\alpha /2}}}^{\rm{2}}{\rm{/4}}{{\rm{n}}^{\rm{2}}}} }}{{{\rm{1 + z}}_{{\rm{\alpha /2}}}^{\rm{2}}{\rm{/n}}}}{\rm{.}}\)

The values in the formula are

\(\begin{array}{l}{\rm{\bar p - }}\frac{{{\rm{0}}{\rm{.25 + 1}}{\rm{.64}}{{\rm{5}}^{\rm{2}}}{\rm{/2000}}}}{{{\rm{1 + 1}}{\rm{.64}}{{\rm{5}}^{\rm{2}}}{\rm{/1000}}}}{\rm{ - 0}}{\rm{.2507,}}\\{\rm{\hat p - }}\frac{{{\rm{250}}}}{{{\rm{1000}}}}{\rm{ - 0}}{\rm{.25,}}\\{\rm{\hat q - 1 - \hat p - 0}}{\rm{.75,}}\end{array}\)

where

\(\begin{array}{*{20}{r}}{{\rm{100(1 - \alpha ) - 95}}}\\{{\rm{\alpha - 0}}{\rm{.05}}}\end{array}\)

and

\({{\rm{z}}_{\rm{\alpha }}}{\rm{ - }}{{\rm{z}}_{{\rm{0}}{\rm{.05}}}}\mathop {\rm{ - }}\limits^{{\rm{(1)}}} {\rm{1}}{\rm{.645}}\)

(1) : this is obtained from

\({\rm{P}}\left( {{\rm{Z > }}{{\rm{z}}_{{\rm{0}}{\rm{.05}}}}} \right){\rm{ - 0}}{\rm{.05}}\)

and from the normal probability table in the appendix. The probability can also be computed with a software.

02

To find the upper confidence bound

Therefore, the upper confidence bound at the\(95\% \)confidence level for the true proportion of such consumers is

\(\begin{array}{l}{\rm{\bar p + }}{{\rm{z}}_{{\rm{\alpha /2}}}}{\rm{ \times }}\frac{{\sqrt {{\rm{\hat p\hat q/n + z}}_{{\rm{\alpha /2}}}^{\rm{2}}{\rm{/4}}{{\rm{n}}^{\rm{2}}}} }}{{{\rm{1 + z}}_{{\rm{\alpha /2}}}^{\rm{2}}{\rm{/n}}}}{\rm{ - \& 0}}{\rm{.2507 + }}\frac{{{\rm{1}}{\rm{.645 \times }}\sqrt {{\rm{0}}{\rm{.25 \times 0}}{\rm{.75/1000 + 1}}{\rm{.64}}{{\rm{5}}^{\rm{2}}}{\rm{/}}\left( {{\rm{4 \times 100}}{{\rm{0}}^{\rm{2}}}} \right)} }}{{{\rm{1 + 1}}{\rm{.64}}{{\rm{5}}^{\rm{2}}}{\rm{/1000}}}}\\{\rm{ - 0}}{\rm{.2507 + 0}}{\rm{.0225 - 0}}{\rm{.2732}}{\rm{.}}\end{array}\)

There is\(95\% \)confidence that the true proportion is less than\(0.2732\),which indicated that there is compelling evidence that the true proportion is smaller than\({\rm{1 / 3}}\)The answer is\(0.2732\)

Yes, there is compelling evidence.

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Most popular questions from this chapter

Determine the t critical value for a lower or an upper confidence bound for each of the situations

\(\begin{array}{*{20}{l}}{{\rm{a}}{\rm{. Confidence level = 95\% , df = 10}}}\\{{\rm{b}}{\rm{. Confidence level = 95\% , df = 15}}}\\{{\rm{c}}{\rm{. Confidence level = 99\% , df = 15}}}\\{{\rm{d}}{\rm{. Confidence level = 99\% , n = 5}}}\\{{\rm{\;e}}{\rm{. Confidence level = 98\% , df = 24}}}\\{{\rm{f}}{\rm{. Confidence level = 99\% , n = 38}}}\end{array}\)

Suppose that a random sample of \({\rm{50}}\) bottles of a particular brand of cough syrup is selected and the alcohol content of each bottle is determined. Let \({\rm{\mu }}\) denote the average alcohol content for the population of all bottles of the brand under study. Suppose that the resulting \({\rm{95\% }}\)confidence interval is \({\rm{(7}}{\rm{.8,9}}{\rm{.4)}}\). a. Would a \({\rm{90\% }}\) confidence interval calculated from this same sample have been narrower or wider than the given interval? Explain your reasoning. b. Consider the following statement: There is a \({\rm{95\% }}\) chance that \({\rm{\mu }}\) is between \({\rm{7}}{\rm{.8}}\) and \({\rm{9}}{\rm{.4}}\). Is this statement correct? Why or why not? c. Consider the following statement: We can be highly confident that \({\rm{95\% }}\) of all bottles of this type of cough syrup have an alcohol content that is between \({\rm{7}}{\rm{.8}}\) and \({\rm{9}}{\rm{.4}}\). Is this statement correct? Why or why not? d. Consider the following statement: If the process of selecting a sample of size \({\rm{50}}\) and then computing the corresponding \({\rm{95\% }}\) interval is repeated \({\rm{100}}\)times, \({\rm{95}}\) of the resulting intervals will include \({\rm{\mu }}\). Is this statement correct? Why or why not?

A random sample of n=\({\rm{15}}\)heat pumps of a certain type yielded the following observations on lifetime (in years):

\(\begin{array}{*{20}{l}}{{\rm{2}}{\rm{.0 1}}{\rm{.3 6}}{\rm{.0 1}}{\rm{.9 5}}{\rm{.1 }}{\rm{.4 1}}{\rm{.0 5}}{\rm{.3}}}\\{{\rm{15}}{\rm{.7 }}{\rm{.7 4}}{\rm{.8 }}{\rm{.9 12}}{\rm{.2 5}}{\rm{.3 }}{\rm{.6}}}\end{array}\)

a. Assume that the lifetime distribution is exponential and use an argument parallel to that to obtain a \({\rm{95\% }}\) CI for expected (true average) lifetime.

b. How should the interval of part (a) be altered to achieve a confidence level of \({\rm{99\% }}\)?

c. What is a \({\rm{95\% }}\)CI for the standard deviation of the lifetime distribution? (Hint: What is the standard deviation of an exponential random variable?)

The article 鈥淢easuring and Understanding the Aging of Kraft Insulating Paper in Power Transformers鈥 contained the following observations on degree of polymerization for paper specimens for which viscosity tim\({\rm{418 421 421 422 425 427 431 434 437 439 446 447 448 453 454 463 465}}\)es concentration fell in a certain middle range:

a. Construct a boxplot of the data and comment on any interesting features.

b. Is it plausible that the given sample observations were selected from a normal distribution?

c. Calculate a two-sided \({\rm{95\% }}\)confidence interval for true average degree of polymerization (as did the authors of the article). Does the interval suggest that \({\rm{440}}\) is a plausible value for true average degree of polymerization? What about \({\rm{450}}\)?

By how much must the sample size n be increased if the width of the CI (7.5) is to be halved? If the sample size is increased by a factor of 25, what effect will this have on the width of the interval? Justify your assertions.

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