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5 Step Hypothesis Test - Correlation

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Consumer Reports magazine tested paints. The table below shows the overall quality score and cost in dollars per gallon. Test for a correlation. Based on these results, do you get better quality paint by paying more?

Quality

90 87 87 86 86 86 82 81 78 62 61 59 23

Cost

27 32 34 30 20 19 19 36 15 39 24 25 15

(i) Test statistic:

(ii) Critical values:

(iii) Conclusion on H0:

(iv) Interpret the results according to the problem.

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Solution Summary

The solution provides step-by-step method of performing a Correlation Hypothesis Test in Excel. All the steps of hypothesis testing (formulation of null and alternate hypotheses, selection of significance level, choosing the appropriate test-statistic, decision rule, calculation of test-statistic and conclusion) have been explained and has been shown in details.

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i) Test Statistic = 0.9666

ii) Critical values = +- ...

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