Question

The marketing department of a national department store chain designs its advertising to target 18- to 24-year-olds. The marking manager worries that the average age of the chain’s customers is greater than 24, in which case the marketing plan should be reconsidered. He decides to survey a random sample of 200 customers and will use the resulting data to test ?_o: μ = 24 vs. ?_a: μ > 24 where μ is the mean customer age. Suppose that the p-value from this test was 0.03. Which of the following is a correct interpretation of this p-value?

Answer 1

In technical terms, a P-value is a probability of obtaining an effect at least as extreme as the one in your sample data, assuming the truth of the null hypothesis.

we want to test that the average age of the chain’s customers is greater than 24.

?o: μ = 24 vs. ?a: μ > 24

P-value = 0.03

We reject Ho if P-value < level of significance

The P-value tells that:

Assuming that the average age of the chain’s customers is not greater than 24, 3 % of the time you conclude that the average age of the chain’s customers is greater than 24 because of random sample error.