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Chi square-confidence interval for the variance

The owner of an Internet video supplier, Netflix, has conducted a study of the habits of online customers. In particular she wants to estimate the average number of videos checked out each month. Before she can determine the sample size she will need, she needs to make an estimate of the standard deviation. On the basis of her past experience and judgment, she estimates that the standard deviation is equal to 12. Suppose that a pilot study of 15 online customers indicates a sample standard deviation of 9.25 videos. At a 0.10 level of significance what are the critical boundaries for rejecting H0: s = 12?

X2 < -6.571 or X2 > +6.571
X2 < +6.571 or X2 > +23.685
X2 < -2.575 or X2 > +2.575
X2 < -23.865 or X2 > +23.685

Solution Preview

The owner of an Internet video supplier, Netflix, has conducted a study of the habits of online customers. In particular she wants to estimate the average number of videos checked out each month. Before she can determine the sample size she will need, she needs to make an estimate of the standard deviation. On ...

Solution Summary

Chi square distribution has been used for calculating the confidence interval for the variance.

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