Chi-Square Test Example

  1. The marketing manager of Telecommunications Company is reviewing the results of a study of potential users of a new cell phone. The study used a random sample of 200 respondents and was conducted in metropolitan area representative of the company’s target market area. The marketing manager is intrigued by one table which is cross tabulation of data on whether target consumers would buy a phone (Yes or No) and whether the cell phone had access to the internet (Yes or No). Table represents this cross tabulation. Can the marketing manager infer that an association exists between internet accesses and buying the cell phone?

  1. State the Null and Alternative hypothesis

  2. Test the hypothesis and draw inference.

As the p-value = 7.1904098^{-17} < 0.05, reject H0 at 5% l.o.s.