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Applied Statistics in Business Economics:Water on an Airline

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Is the water on your airline flight safe to drink? It is not feasible to analyze the water on every flight, so sampling is necessary. In August and September 2004, the Environmental Protection Agency (EPA) found bacterial contamination in water samples from the lavatories and galley water taps on 20 of 158 randomly selected U.S. flights. Alarmed by the data, the EPA ordered sanitation improvements, and then tested water samples again in November and December 2004. In the second sample, bacterial contamination was found in 29 of 169 randomly sampled flights. (a) Use a left- tailed test at alpha = .05 to check whether the percent of all flights with contaminated water was lower in the first sample. (b) Find the p-value. (c) Discuss the question of significance versus importance in this specific application. (d) Test whether normality may be assumed.

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This solution is comprised of a complete, neat and step-by-step solution which illustrates how to complete a hypothesis test and evaluate the z-statistic. An interpretation of the results is provided, showing how to make a conclusion regarding the results found.

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(a) H0: The contamination is the same in both the samples, that is, p1 = p2 vs.
Ha: The contamination is lower in the first sample, that is, p1 < p2.
Hypothesis test for two independent proportions:
alpha= 0.05, Critical z- value for a left-tailed test = ...

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