Family P Car Insurance GE Mutual Insurance Becker $2,090 $1,610 Berry 1,683 1,24
ID: 2958797 • Letter: F
Question
Family P Car Insurance GE Mutual InsuranceBecker $2,090 $1,610
Berry 1,683 1,247
Cobb 1,402 2,327
Debuck 1,830 1,367
DuBrul 930 1,461
Eckroate 697 1,789
German 1,741 1,621
Glasson 1,129 1,914
King 1,018 1,956
Kucic 1,881 1,772
Meredith 1,571 1,375
Obeid 874 1,527
Price 1,579 1,767
Phillips 1,577 1,636
Tresize 860 1,188
The president of the American Insurance Institute wants to compare the yearly costs of auto insurance offered by two leading companies. He selects a sample of 15 families, some with only a single insured driver, others with several teenage drivers, and pays each family a stipend to contact the two companies and ask for a price quote. To make the data comparable, certain features, such as the deductible amount and limits of liability, are standardized. The sample information is reported below. At the .10 significance level, can we conclude that there is a difference in the amounts quoted?
Explanation / Answer
The test hypothesis is
Ho:1=2
Ha:1 not equal to 2
Since the p value > 0.1, we do not reject the null hypothesis. There is NOT enough evidence to say that the means are different.
Progressive GEICO Mean 1390.8 1637.133 Variance 191630.5 89437.55 Observations 15 15 Pearson Correlation -0.06911
Hypothesized Mean Difference 0
df 14
t Stat -1.74427
P(T<=t) one-tail 0.051508
t Critical one-tail 1.34503
P(T<=t) two-tail 0.103016
t Critical two-tail 1.76131
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