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Who owns a home? What is the relationship between educational

achievement and home ownership? A random sample of 500 U.S. adults was selected. Each member of the sample was identified as a high school graduate (or not) and as a homeowner (or not). The two-way table summarizes the data.

Are the events 鈥渉omeowner鈥 and 鈥渉igh school graduate鈥 independent? Justify your answer.

Short Answer

Expert verified

No, the two events are not independent.

Step by step solution

01

Given information

Data in a two-way table for the relationship between educational achievement and home ownership:

Two events are independent if the probability of one event's occurrence has no bearing on the probability of the other event's occurrence.

Conditional probability states that

P(BA)=P(AB)P(A)=P(AandB)P(A)

Two events are independent if the probability of one event's occurrence has no bearing on the probability of the other event's occurrence.

Conditional probability states that

P(BA)=P(AB)P(A)=P(AandB)P(A)

Let,

G: Graduate
H: Homeowner

02

Calculation

The table contains data on 500adults in the United States.

The information about 500U.S adults is provided in the table.

There are 500different outcomes to choose from.

Also, note that

In the table, 310 of the 500 U.S adults are graduates.

Thus,

The number of favorable outcomes is 310.

When the number of favorable outcomes is divided by the number of possible outcomes, we get the probability.

P(G)=Numberoffavourable outcomesNumberof possible outcomes=310500=0.62

Now,
Note that
In the table, 340 of the 500U.S adults are homeowners. In this case, the number of favorable outcomes is 340and the number of possible outcomes is 500:

P(HandG)=Numberoffavourable outcomesNumber of possible outcomes=221500

Use the conditional probability formula:

P(GH)=P(GandH)P(H)=221/500340/500=221340=1320=0.65

For events Gand Hto be independent,

P(GH)=P(G)

And, P(HG)=P(H)

But,

In this case,

Note that P(GH)=0.65

P(G)=0.62

Both probabilities are not the same.

Therefore, the two events are not independent.

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