a. State the hypothesis and identify the claim
b. Find the critical vaules(s)
c. Compute the test value.
d. Make the decision.
e. Summarize the results.
Based on the following data showing the numbers of people (in thousands) with and without
health insurance, can it be concluded at the 0.01 level of significance that the proportion with or
without health insurance is related to the state chosen?
With Without
Arkansas 522 123
Montana 793 146
North Dakota 553 61
Wyoming 447 70
Solution
a. State the hypothesis and identify the claim
Ho: the proportion with or without health insurance is not related to the state chosen
Ha: the proportion with or without health insurance is related to the state chosen
b. Find the critical vaules(s)
Given a=0.01, the critical value is Chisquare with 0.99, df=3 is 11.34 (from chisquare table)

c. Compute the test value.
Chisquare = 21.992
d. Make the decision.
Since 21.992 is larger than 11.34, we reject Ho.
e. Summarize the results.
We can conclude that the proportion with or without health insurance is related to the state
chosen