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Statistical Significance Calculations

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Tourism is one consideration for CoffeeTime's future, A survey of 1,233 visitors to mumbai last year revealed that 110 visited a small cafe during their visit. Laura claims that 10% of tourists will include a visit to a cafe.

Use a 0.05 significance level to test her claim. Would it be wise for her to use that claim in trying to convince management to increase their advertising spending to travel agents? Explain.

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Solution Summary

This solution provides a step-by-step explanation of one can compute the hypothesized mean and then the observed mean and by comparing them arrive at a conclusion about statistical significance of an event.

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Hypothesized mean = 1233*0.1 = 123.3

n = 1233; p = 10% = 0.1; (1-p) = 0.9
Standard Deviation = SD = sqrt[n*p*(1-p)] = sqrt(1233*0.1*0.9) = ...

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