Statistics: Informed Decisions Using Data (4th Edition)

Published by Pearson
ISBN 10: 0321757270
ISBN 13: 978-0-32175-727-2

Chapter 12 - Section 12.1 - Assess Your Understanding - Applying the Concepts - Page 595: 14

Answer

$X^2\lt X_α^2$: the null hypothesis is not rejected. There is not enough evidence to conclude that the distribution does not follow Benford’s Law.

Work Step by Step

$H_0:$ the distribution follows Benford’s Law. $H_1:$ the distribution does not follow Benford’s Law. Total: 335 digits. Expected count of 1: $335\times0.301=100.835$ Expected count of 2: $335\times0.176=58.96$ Expected count of 3: $335\times0.125=41.875$ Expected count of 4: $335\times0.097=32.495$ Expected count of 5: $335\times0.079=26.465$ Expected count of 6: $335\times0.067=22.445$ Expected count of 7: $335\times0.058=19.43$ Expected count of 8: $335\times0.051=17.085$ Expected count of 9: $335\times0.046=15.41$ $X^2=Σ\frac{(O_i-E_i)^2}{E_1}=\frac{(104-100.835)^2}{100.835}+\frac{(55-58.96)^2}{58.96}+\frac{(36-41.875)^2}{41.875}+\frac{(38-32.495)^2}{32.495}+\frac{(24-26.465)^2}{26.465}+\frac{(29-22.445)^2}{22.445}+\frac{(18-19.43)^2}{19.43}+\frac{(14-17.085)^2}{17.085}+\frac{(17-15.41)^2}{15.41}=5.09$ $k=9$. So, $d.f.=9-1=8$ $X_α^2=X_{0.05}^2=15.51$ (According to Table VII, for d.f. = 8 and area to the right of critical value = 0.05) Since $X^2\lt X_α^2$, we do not reject the null hypothesis.
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