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Do contributions to a social organization depend on income and/or age?

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A social organization was interested in determining if there were various demographic characteristics that might be related to people's propensity to contribute to charities. The organization was particularly interested in determining if individuals above 40 were more likely to contribute to larger amounts than individuals below 40. The average contribution in the population was $1,500 and this figure was used to divide the individuals in the sample into two groups, those who contributed large amounts or more than average versus those who contributed less than average. The following table presents a two-way classification of the sample of individuals by contributions and age.

In addition, the social organization wanted to determine if contributions depended on income and/or age. The following table presents the simultaneous treatment of age and income. The median income in the population was $18,200 and this figure was used to split the sample into two groups.

a) Does the amount of personal contributions depend on age? Justify your answer.

b) Does the amount of personal contributions depend on age alone? Justify your answer.

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Solution Summary

Chi Square test of independence. The solution gives the details with null hypothesis, alternative hypothesis, significance level, critical value and test statistic. Interpretation of the results are also given.

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Here Chi square test can be applied to test whether there is any association between two category variable.

Ans a.

Null Hypothesis H0: There is no association between Personal contribution and Age.

Alternative Hypothesis H1: There is ...

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