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An insurance company selected samples of clients under 18 years of age and over 18 and recorded the number of accidents they had in the previous year. The results are shown below. Under Age of 18 Over Age of 18 n1 = 500 n2 = 600 Number of accidents = 180 Number of accidents = 150 ​ We are interested in determining if the accident proportions differ between the two age groups. ​ Refer to Exhibit 11-7 and let p u represent the proportion under and p o the proportion over the age of 18. The null hypothesis is a. p u - p o = 0 b. p u - p o ≠ 0 c. p u - p o ≥ 0 d. p u - p o ≤ 0

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varshamittal029

The 95% confidence interval for the difference between the two proportions is (0.056, 0.164)

Here, we are given that from the sample information for people under 18-

n₁  =  500

x₁ =  180

⇒ p₁  =  180/ 500    

p₁  =  0.36    

then,  

q₁  =  1 -  p₁    

q₁ =  0.64

Similarly, from the sample information for people over 18, we have-

n₂  =  600

x₂  =  150

⇒ p₂  =  150 / 600  

p₂ =  0,25  

then,

q₂  =  1 - p₂  

q₂ =  1 - 0.25  

q₂ = 0,75

Now, we conduct a hypothesis test as follows-

Null hypothesis (H₀) ⇒  p₁  =  p₂

Alternative Hypothesis (Hₐ) ⇒ p₁  ≠  p₂

Confidence interval =  95 %    

⇒ significance level (α) = 5 %  

α  =  0.05  

and α/ 2  =  0.025  

⇒ z at 95% significance level = 1.96 (from z tables)

Now, we calculate z statistic-

z(s)  =  (p₁ - p₂) / EED

EED = √[(p₁*q₁)n₁  +  (p₂*q₂)/n₂]

EED = √[( 0.36*0.64)/500  +  (0.25*0.75)/600]

EED = √[0.00046  +  0.0003125]

EED = 0.028

and (p₁  -  p₂) = 0.36 - 0.25  

= 0.11

Therefore,

z(s)  =  0.11 / 0.028

z(s) = 3.93

we can see that  z(s) > 1.96

⇒ z(s) is in the rejection region for H₀

Thus, we reject H₀. We can´t support the idea of equals means

Now, CI at 95 %  = (p₁ - p₂) ±  z(c) * EED

CI = (0.11 ± 1.96 * 0.028)

CI = (0.11 ± 0.054)

CI =  (0.056, 0.164)

Thus, the 95% confidence interval for the difference between the two proportions is (0.056, 0.164)

Learn more about hypothesis testing here-

https://brainly.com/question/15980493

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Your question was incomplete. Check for missing content below-

Q1. Let P, represent the proportion under and p, the proportion over the age of 18. The null hypothesis is:_____.

Q2. The 95% confidence interval for the difference between the two proportions is:____.

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