For No High School Diploma:
n1 = 207, x1 = 71
p̂1 = x1/n1 = 0.343
For College Degree:
n2 = 178, x2 = 42
p̂2 = x2/n2 = 0.236
α = 0.05
Null and Alternative hypothesis:
Ho : p1 - p2 = 0, H1 : p1 - p2 ≠ 0
Pooled proportion:
p̄ = (x1+x2)/(n1+n2) = (71+42)/(207+178) = 0.2935
Test statistic:
z = (p̂1 - p̂2)/√ [p̄*(1-p̄)*(1/n1+1/n2)] = (0.343 - 0.236)/√[0.2935*0.7065*(1/207+1/178)] = 2.30
Critical value :
Two tailed critical value, z crit = NORM.S.INV(0.05/2) = +1.96, -1.96
Reject Ho if z < -1.96 or if z > 1.96
Decision:
p-value < α, Reject the null hypothesis.
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Note: if the significance level, α is different from 0.05 do tell me in comments.
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