Test of independence using level of significance

Reference no: EM1316987

Q1) With double-digit annual percentage increase in cost of health insurance, more and more workers are probable to lack health insurance coverage (USA Today, January 23, 2004). Following sample data give a comparison of workers with and without health insurance coverage for small, medium, and large companies. For purposes of this study, small companies are companies which have fewer than 100 employees. Medium companies have 100 to 99 employees, and large companies have 1000 or more employees. Sample data are reported for 50 employees of small companies, 75 employees of medium companies, and 100 employees of large companies.

	Health Insurance
Size of company	Yes	No	Total
Small	36	14	50
Medium	65	10	75
Large	88	12	100
Total	189	36	225

Carry out test of independence to find out whether employee health insurance coverage is independent of size of company. Use α = 0.05 level of significance.

Reference no: EM1316987

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