Question

One of the biggest issues facing e-retailers is the ability to turn browsers into buyers. This is measured by the conversion rate, the percentage of browsers who buy something in their visit to a site. The conversion rate for a company's website was 0.28 (π). The website at the company was redesigned in an attempt to increase its conversion rates. A samples of 300 browsers at the redesigned site was selected. Suppose that 90 browsers made a purchase. The company officials would like to know if there is evidence of an increase in conversion rate at the 5% level of significance (α = 0.05).

1. State your null and alternate hypotheses:

                         

2. What is the value of the test statistic? Please show all the relevant calculations.

3. What is the rejection criterion based on the p-value approach?

4. What is the Statistical decision (i.e. reject /or do not reject the null hypothesis) based on the p-value obtained?  

Answer 1

Here , we apply the test for population proportion P using the test statistic z =( $\dpi{100} \fn_cm \hat{p}$ -P)/ $\dpi{100} \fn_cm \sqrt{PQ/n}$