/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Problem 50 It seems plausible that higher r... [FREE SOLUTION] | 91影视

91影视

It seems plausible that higher rent for retail space could be justified only by a higher level of sales. A random sample of \(n=53\) specialty stores in a chain was selected, and the values of \(x=\) annual dollar rent per square foot and \(y=\) annual dollar sales per square foot were determined, resulting in \(r=.37\) ("Assodation of Shopping Center Anchors with Performance of a Nonanchor Specialty Chain Store." Journal of Retailing \(\left.[1985]_{:} 61-74\right)\). Carry out a test at significance level .05 to see whether there is in fact a positive linear association between \(x\) and \(y\) in the population of all such stores.

Short Answer

Expert verified
Without doing the actual calculations, it can't be said for sure if there is a positive linear association between \(x\) and \(y\) until the calculated t-value is compared with the critical t-value.

Step by step solution

01

State the hypotheses

The null hypothesis \(H_0\) is that the population correlation coefficient \(蟻=0\). The alternative hypothesis \(H_A\) is that the population correlation coefficient is greater than zero (\(蟻>0\)). This is a one-tailed test towards the right.
02

Determine the test statistic

For correlation coefficient hypothesis testing, the test statistic \(t\) is given by the formula: \(t= r\sqrt{(n-2)/(1-r^2)}\). Substituting the given values: \(t=.37\sqrt{(53-2)/(1-.37^2)}\). Calculate the value of t.
03

Determine the critical value and decision rule

The critical value \(t_{critical}\) for a one-tailed test with significance level .05 and degrees of freedom \(df= n-2= 51\), can be found from a t-distribution table. The decision rule is: if the calculated t-value is greater than the critical value, reject the null hypothesis.
04

Make a decision

Using the calculated t-value from step 2 and the critical value from step 3, make a decision. If the calculated t-value is greater than the t-critical value, reject the null hypothesis. If not, fail to reject the null hypothesis.
05

Interpret the result

If you reject the null hypothesis, it means there is enough evidence to support a positive linear association between annual dollar rent per square foot (\(x\)) and annual dollar sales per square foot (\(y\)) at 5% significance level. If you fail to reject the null hypothesis, it means there's not enough evidence to support a positive linear association.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

Key Concepts

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

Null Hypothesis
In any statistical analysis, the null hypothesis (\(H_0\) ) serves as the starting assumption. This hypothesis posits that there is no effect or no association between the variables being studied. Specifically, in the context of correlation coefficient hypothesis testing, the null hypothesis suggests that there is no linear relationship between the two measured variables鈥攎eaning the population correlation coefficient (\(蟻\)) is zero. If our sample data provides sufficient evidence to cast doubt on the null hypothesis, we then consider it against the alternative hypothesis.

For example, in the exercise, the null hypothesis states that the population correlation coefficient between the annual dollar rent per square foot (\(x\)) and the annual dollar sales per square foot (\(y\) ) for the specialty stores is zero, implying no linear relationship in the population of all such stores.
Alternative Hypothesis
Contrasting the null hypothesis is the alternative hypothesis (\(H_A\) or sometimes denoted as \(H_1\) ), which is the statement we are trying to find evidence for through our hypothesis test. It posits that there is an effect, or in the case of correlation testing鈥攁 nonzero correlation coefficient between the variables of interest. This hypothesis becomes the conclusion we draw when the null hypothesis is rejected.

In our example, the alternative hypothesis is that the population correlation coefficient (\(蟻\) ) is greater than zero, indicating a positive linear relationship between retail space rent (\(x\) ) and sales (\(y\) ) in the population. Accepting this hypothesis implies that higher rents could indeed be justified by higher sales.
Test Statistic
The test statistic is a numerical value calculated from sample data during a hypothesis test. It measures how far the sample statistic is from the null hypothesis's assumed value when the null hypothesis is true. In correlation testing, we calculate the test statistic using the sample correlation coefficient (\(r\) ) to determine the likelihood that the observed correlation occurred under the null hypothesis.

Using the formula \(t = r\frac{\text{\textsc{sqrt}}(n - 2)}{\text{\textsc{sqrt}}(1 - r^2)}\), where \(n\) represents the sample size, we substitute the given values to find our specific test statistic. This calculated \(t\)-value is then compared against a theoretical distribution鈥攖ypically the \(t\)-distribution.
Critical Value
The critical value is a crucial part of hypothesis testing as it serves as the threshold for deciding whether to reject the null hypothesis. It's determined by the significance level (\(伪\) ) of the test (commonly set at 0.05 or 5%) and the degrees of freedom (\(df\) ). The critical value acts as a cutoff point; if the absolute value of the test statistic exceeds the critical value, we reject the null hypothesis.

In the exercise, the critical value is derived from the \(t\)-distribution for a one-tailed test with 51 degrees of freedom (\(df = n - 2\) ) at the 5% significance level. This is the critical value that sets the benchmark to decide between the null and alternative hypotheses based on the calculated test statistic.
T-Distribution
The t-distribution, also referred to as Student's t-distribution, is a probability distribution that arises when estimating the mean of a normally distributed population where the sample size is small and the population standard deviation is unknown. It is crucial for calculating the critical values for many types of hypothesis tests, including the test for the correlation coefficient.

The t-distribution is symmetrical and bell-shaped, like the standard normal distribution, but with heavier tails, meaning it reflects the increased uncertainty associated with smaller sample sizes. As the sample size grows, the \(t\)-distribution approaches the normal distribution. The degrees of freedom (\(df\) ), which in the context of our exercise are 51 (\(df = n - 2\) ), determine the exact shape of the \(t\)-distribution curve to be used when looking up or calculating the critical value for the test.

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Explain the difference between \(r\) and \(\rho\).

Exercise 13.21 gave data on \(x=\) nerve firing frequency and \(y=\) pleasantness rating when nerves were stimulated by a light brushing stoke on the forearm. The \(x\) values and the corresponding residuals from a simple linear regression are as follows: a. Construct a standardized residual plot. Does the plot exhibit any unusual features? b. A normal probability plot of the standardized residuals follows. Based on this plot, do you think it is reasonable to assume that the error distribution is approximately normal? Explain.

a. Explain the difference between the line \(y=\) \(\alpha+\beta x\) and the line \(\hat{y}=a+b x\) b. Explain the difference between \(\beta\) and \(b\). c. Let \(x^{*}\) denote a particular value of the independent variable. Explain the difference between \(\alpha+\beta x^{*}\) and \(a+b x^{*}\) d. Explain the difference between \(\sigma\) and \(s_{e}\)

A sample of small cars was selected, and the values of \(x=\) horsepower and \(y=\) fuel efficiency (mpg) were determined for each car. Fitting the simple linear regression model gave the estimated regression equation \(\hat{y}=44.0-.150 x\) a. How would you interpret \(b=-.150\) ? b. Substituting \(x=100\) gives \(\hat{y}=29.0 .\) Give two different interpretations of this number. c. What happens if you predict efficiency for a car with a 300 -horsepower engine? Why do you think this has occurred? d. Interpret \(r^{2}=0.680\) in the context of this problem. e. Interpret \(s_{e}=3.0\) in the context of this problem.

A sample of \(n=10,000(x, y)\) pairs resulted in \(r=.022 .\) Test \(H_{0}: \rho=0\) versus \(H_{a}: \rho \neq 0\) at significance level .05. Is the result statistically significant? Comment on the practical significance of your analysis.

See all solutions

Recommended explanations on Math Textbooks

View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.