Chapter 10: Chi Square tests

1. Use the chi-square contingency analysis to determine whether variable 1 is independent of variable 2. Use
a 5% level of significance.

Variable 2
12 23 21 56
8 17 20 45
Variable 1
7 11 18 36
27 51 59 137

2. There are three loan officers at Fisher National Bank. All decisions on mortgage loans are made by one of
these officers. The president of the bank would like to be sure that the rejection rate is about the same for
the three officers. A sample of 200 recent applications yielded the following results. Is the rejection rate
related to the officer that processes the loan? Use the 0.05 significance level.

Loan Officer
Brandon Sylvia James
Approved 50 70 55
Rejected 10 10 5
Total 60 80 60

3. One of the questions on the Business Week Subscriber Study was, “In the past 12 months, when
travelling for business, what type of airline ticket you purchased most often?” The data obtained are
shown in the following contingency table.

Type of flight
Type of Ticket Domestic Flights International Flights
First class 29 22
Business/ executive class 95 121
Full fare economy/ coach class 518 135

Use α=0.05 and test for the independence of type of flight and type of ticket. What is your conclusion?
4. As part of their infrastructure planning exercise, a city council analyst summarised annual household
income and the number of motor vehicles owned for a random sample of households. The results are as
follows. Using the chi-square test, determine whether the number of vehicles owned depends on the
household’s income. Use  = 0.05. Explain your test result.

Household income
Number of vehicles RM 100000 and
Under RM 20000 RM 20000- 49999 RM50000-$99999 above
0 20 12 10 8
1-2 9 18 30 80
3 or more 7 13 15 40