A public poll on the perception of business ethics in the U.S. asked both consum

Question

A public poll on the perception of business ethics in the U.S. asked both consumers and CEOs whether they considered 'insider trading a management practice that is 'always wrong. The 99% 2-sided confidence interval for the difference of the proportions of consumers and CEOs that thought insider trading is always wrong, (p(consumer) p(CEO), was computed to be (-0.19, -0.06). Is this enough evidence to declare a significant difference between consumers and CEOs on this issue, at a 1% significance level? A Yes. In fact, the proportion of CEOs that consider insider trading always wrong is bigger than the proportion of consumers that do B No. There isn't enough evidence to suggest that one group differs from the other on this issue. C There isn't enough data supplied in this question to make any conclusions. D Yes. In fact, the proportion of consumers that consider insider trading always wrong is bigger than the proportion of CEOs that do.

Explanation / Answer

As the difference in proportions confidence interval at 99% confidence is ( - 0.19, -0.06 ) we see that 0 is not contained inside this interval and therefore we can safely conclude that at 1% level of significance, there is a significant difference between the two proportions. Also as p(consumer ) - p(CEO ) is negative, therefore the proportion of CEOs that considers insider trading wrong is bigger than the proportion of consumers.

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