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Hypothesis Testing of Proportion-Dallas Fire trucks

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In Dallas, some fire trucks were painted yellow (instead of red) to heighten their visibility. During a test period, the fleet of red fire trucks made 153,348 runs and had 20 accidents, while the fleet of yellow fire trucks made 135,035 runs and had 4 accidents. At α = .01, did the yellow fire trucks have a significantly lower accident rate? (a) State the hypotheses. (b) State the decision rule and sketch it. (c) Find the sample proportions and z test statistic. (d) Make a decision. (e) Find the p-value and interpret it. (f ) If statistically significant, do you think the difference is large enough to
be important? If so, to whom, and why? (g) Is the normality assumption fulfilled?

Source: The Wall Street Journal, June 26, 1995, p. B1.
Accident Rate for Dallas Fire Trucks
Statistic Red Fire Trucks Yellow Fire Trucks
Number of accidents x1
= 20 accidents x2
= 4 accidents
Number of fire runs n1
= 153,348 runs n2
= 135,035 runs

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Solution Summary

The solution provides step by step method for the calculation of Z test for two populations. Formula for the calculation and Interpretations of the results are also included. Interactive excel sheet is included. The user can edit the inputs and obtain the complete results for a new set of data.