Chi-square goodness of fit cannot find expected values

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SUMMARY

The discussion focuses on calculating expected values for a Chi-square goodness of fit test using a 2×2 contingency table. The data consists of 100 firms categorized by profit (35 service and 36 non-service firms made a profit; 12 service and 17 non-service firms incurred a loss). To determine if the events "the company made profit this year" and "the company is in the service industry" are independent, the Chi-square formula, Chi-square = ∑(O-E)²/E, is utilized. Participants emphasize the importance of understanding the definition of independent events and suggest consulting textbooks or online resources for further clarification.

PREREQUISITES
  • Understanding of Chi-square tests and their applications
  • Familiarity with contingency tables and data categorization
  • Knowledge of statistical significance levels, specifically 10%
  • Ability to compute expected values from observed data
NEXT STEPS
  • Learn how to calculate expected values in a Chi-square test
  • Study the concept of independence in probability and statistics
  • Explore the use of statistical software for Chi-square tests
  • Review examples of Chi-square goodness of fit tests in various contexts
USEFUL FOR

Students in statistics, data analysts, and researchers conducting hypothesis testing using Chi-square tests will benefit from this discussion.

Rifscape
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Homework Statement


An article in Business Week reports profits and losses of firms by industry. A random sample of 100 firms is selected, and for each firm in the sample, we record whether the company made money or lost money, and whether or not the firm is a service company. The data are summarized in the 2×2 table below. Use a 10% level of significance to test whether the two events "the company made profit this year" and "the company is in the service industry" are independent.

Industry Type

Service Nonservice

Profit 35 36

Loss 12 17

I am not sure how to find the expected values, any advice is appreciated

Homework Equations



Chi-squre = ∑(O-E)^2/E

The Attempt at a Solution



I am not sure how to find the expected values, if someone can tell me how to find those, I will be able to solve the problem.

I'm not sure how to find the expected value when given a table bigger than 1 x n, if someone could explain how to do this it would be much appreciated.

Any help would be greatly appreciated, thanks[/B]
 
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The relevant equation that you have not listed is the definition of independent events. Write that down and fill in as much as you can from the data you have.
 
Rifscape said:

Homework Statement


An article in Business Week reports profits and losses of firms by industry. A random sample of 100 firms is selected, and for each firm in the sample, we record whether the company made money or lost money, and whether or not the firm is a service company. The data are summarized in the 2×2 table below. Use a 10% level of significance to test whether the two events "the company made profit this year" and "the company is in the service industry" are independent.

Industry Type

Service Nonservice

Profit 35 36

Loss 12 17

I am not sure how to find the expected values, any advice is appreciated

Homework Equations



Chi-squre = ∑(O-E)^2/E

The Attempt at a Solution



I am not sure how to find the expected values, if someone can tell me how to find those, I will be able to solve the problem.

I'm not sure how to find the expected value when given a table bigger than 1 x n, if someone could explain how to do this it would be much appreciated.

Any help would be greatly appreciated, thanks[/B]
Google is your friend: try "chi-square test", for example. Alternatively: look in your textbook.
 

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