American University Level of Significance Paper

One of the most important aspects of a store’s image is the perceived quality of its merchandise. Other factors include merchandise pricing, assortment of products, convenience of location, and service. Suppose image perceptions of shoppers of specialty stores and shoppers of discount stores are being compared. A random sample of shoppers is taken at each type of store, and the shoppers are asked whether the quality of merchandise is a determining factor in their perception of the store’s image. Out of 350 shoppers at the specialty store, 210 say yes; but only 260 of the 500 shoppers at the discount store say yes. Use these data to test to determine if there is a significant difference between the proportion of shoppers at specialty stores and the proportion of shoppers at discount stores who say that quality of merchandise is a determining factor in their perception of a store’s image.

a.Formulate the null and alternative hypotheses.

b.Using a 10% level of significance, test to determine if there is a significant difference between the proportion of shoppers at specialty stores and the proportion of shoppers at discount stores who say that quality of merchandise is a determining factor in their perception of a store’s image. Find p-value. Write conclusion.

Prof. Angela

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