Healthcare costs in the U.S. are a major concern. The Obama team is looking at t

Question

Healthcare costs in the U.S. are a major concern. The Obama team is looking at the Latvian healthcare system to see if it would make sense in the U.S. A team of statisticians from TMTH 3360 are sent to Latvia to look things over. They interview 49 Latvians who had surgery for ingrown toenails. They paid an average of exist300 for the procedure. with a standard deviation of exist175. In contrast, the same procedure in the U.S. costs an average of exist325 The Latvians claim they keep the costs lower by requiring citizens to have regular pedicures. Does the TMTH teams investigation support the claims of the Latvians? Report to Congress detailing your hypothesis and conclusion. Use an alpha of 05

Explanation / Answer

Solution:-

State the hypotheses. The first step is to state the null hypothesis and an alternative hypothesis.

Null hypothesis: > 325

Alternative hypothesis: < 325

Note that these hypotheses constitute a one-tailed test. The null hypothesis will be rejected if the sample mean is too small.

Formulate an analysis plan. For this analysis, the significance level is 0.05. The test method is a one-sample t-test.

Analyze sample data. Using sample data, we compute the standard error (SE), degrees of freedom (DF), and the t statistic test statistic (t).

SE = s / sqrt(n)

S.E = 25

DF = n - 1 = 49 - 1

D.F = 48

t = (x - ) / SE

t = - 1

where s is the standard deviation of the sample, x is the sample mean, is the hypothesized population mean, and n is the sample size.

The observed sample mean produced a t statistic test statistic of - 1.0.

Thus the P-value in this analysis is 0.161.

Interpret results. Since the P-value (0.161) is greater than the significance level (0.05), we cannot reject the null hypothesis.

From the above test we have sufficient evidence in the favor of the claim that Latvians has lower cost than average cost in U.S.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.