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Hypothesis Testing: Two sample z test & Effect of Skewness

Each response must include your calculations.
This problem requires you to complete all steps for the hypothesis testing process.
A cell phone company offers two plans to it subscribers. At the time new subscribers sign up, they are asked to provide some demographic information. The mean yearly income for a sample of 40 subscribers to Plan A is $57,000 with a standard deviation of $9,200. This distribution is positively skewed; the actual coefficient of skewness is 2.11. For a sample of 30 subscribers to Plan B the mean income is $61,000 with a standard deviation of $7,100. The distribution of Plan B subscribers is also positively skewed, but not as severely. The coefficient of skewness is 1.54.

Complete the following:

a. At the .05 significance level, is it reasonable to conclude the mean income of those selecting Plan B is larger?

b. What is the p-value? Report the p-value to 4 decimal places.

c. Do the coefficients of skewness affect the results of the hypothesis test? Why?

Solution Summary

The solution provides step by step method for the calculation of testing of hypothesis. The solution also explains how the coefficient of skewness affects hypothesis testing. 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.

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