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    Hypothesis Testing: Paired t test of auto insurance

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    The president of the American Insurance Institute wants to compare the yearly costs of
    auto insurance offered by two leading companies. He selects a sample of 15 families,
    some with only a single insured driver, others with several teenage drivers, and pays each
    family a stipend to contact the two companies and ask for a price quote. To make the
    data comparable, certain features, such as the deductible amount and limits of liability, are standardized. The sample information is reported below. At the .10 significance level,
    can we conclude that there is a difference in the amounts quoted?
    Progressive GEICO
    Family Car Insurance Mutual Insurance
    Becker $2,090 $1,610
    Berry 1,683 1,247
    Cobb 1,402 2,327
    Debuck 1,830 1,367
    DuBrul 930 1,461
    Eckroate 697 1,789
    German 1,741 1,621
    Glasson 1,129 1,914
    King 1,018 1,956
    Kucic 1,881 1,772
    Meredith 1,571 1,375
    Obeid 874 1,527
    Price 1,579 1,767
    Phillips 1,577 1,636
    Tresize 860 1,188

    © BrainMass Inc. brainmass.com June 3, 2020, 11:29 pm ad1c9bdddf
    https://brainmass.com/statistics/students-t-test/hypothesis-testing-paired-t-test-of-auto-insurance-281269

    Solution Summary

    The solution provides step by step method for the calculation of test statistic for comparing the yearly costs of auto insurance offered by two leading companies. 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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