Chi Square of Independence
Consider the results of a small opinion poll concerning the chances of another stock market crash in the next 12 months comparable to the crash of 1987.
|
Responses to the opinion poll on the chances of a stock marker crash | |||
|
Stockholders |
Non-stockholders |
Total | |
|
Very likely |
18 |
26 |
44 |
|
Somewhat likely |
41 |
65 |
106 |
|
Not very likely |
52 |
68 |
120 |
|
Not likely at all |
19 |
31 |
50 |
|
Not sure |
8 |
13 |
21 |
|
Total |
138 |
203 |
341 |
a. Fill in the “Total” row and column.
b. Find the table of overall percentages. Interpret these as estimates of probabilities in the population. In particular, what probabilities do they represent?
c. Find the table of percentages by type of person (stockholder/non-stockholder). Interpret these as estimates of probabilities in the population. In particular, what probabilities do they represent?
d. Find the table of percentages by response. Interpret these as estimates of probabilities in the population. In particular, what probabilities do they represent?
e. Does the response appear to be independent of the stockholder/non-stockholder classification?
f. Find the critical value from the chi-squared table for the 5% level and report the result of the chi-squared test.
g. Find the critical value from the chi-squared table for the 1% level and report the result of the chi-squared test.
h. Find the critical value from the chi-squared table for the 0.1% level and report the result of the chi-squared test.
i. State you conclusions and discuss the results in practical terms.
