The World Bank collected data on the percentage of GDP that a country spends on health expenditures ("Health expenditure," 2013) and also the percentage of women receiving prenatal care ("Pregnant woman receiving," 2013). The data for 14 countries where this information is available for the year 2011 are in following table (note: outlier data has been removed):
Data of Health Expenditure versus Prenatal Care
Health Expenditure (% of GDP) |
Prenatal Care (%) |
3.7 |
54.6 |
5.2 |
93.7 |
5.2 |
84.7 |
10.0 |
100.0 |
4.7 |
42.5 |
4.8 |
96.4 |
6.0 |
77.1 |
5.4 |
58.3 |
4.8 |
95.4 |
4.1 |
78.0 |
6.0 |
93.3 |
9.5 |
93.3 |
6.8 |
93.7 |
6.1 |
89.8 |
Test at the 5% level for a correlation between percentage spent on health expenditure and the percentage of women receiving prenatal care.
(i) Which of the following statements correctly define both the null hypothesis HO and the alternate hypothesis HA ?
A. HO : ? = 0 HA : ? < 0
B. HO : ? > 0 HA : ? = 0
C. HO : ? = 0 HA : ? > 0
D. none of these answers are correct
(ii) Enter the level of significance ? used for this test, and the degrees of freedom df:
Enter level of significance in decimal form to nearest hundredth, followed by comma, followed by degrees of freedom value to nearest integer. Do not enter spaces.
Examples of correctly entered answers: 0.01,4 0.02,11 0.05,13 0.10,46
(iii) Use technology to determine correlation coefficient r between independent variable (percent GDP spent on healthcare) and dependent variable (percent women receiving prenatal care)
Enter in decimal form to nearest ten-thousandth with sign. Examples of correctly entered answers:
-0.0001 +0.0020 -0.0500 +0.3000 +0.7115
Recommended online calculator:
Correlation and Linear Regression Calculator Applet
(iv) Calculate and enter test statistic
Enter value in decimal form rounded to nearest hundredth, with appropriate sign (no spaces). Examples of correctly entered answers:
–2.10 –0.07 +0.60 +1.09
Recommended online calculator:
Correlation Coefficient - Testing Significance
(v) Using tables, calculator, or spreadsheet: Determine and enter p-value corresponding to test statistic.
Enter value in decimal form rounded to nearest thousandth. Examples of correctly entered answers:
0.000 0.001 0.030 0.600 0.814 1.000
Recommended online calculator:
Correlation Coefficient - Testing Significance
(vi) Comparing p-value and ? value, which is the correct decision to make for this hypothesis test?
A. Reject Ho
B. Fail to reject Ho
C. Accept Ho
D. Accept HA
Enter letter corresponding to correct answer.
(vii) Select the statement that most correctly interprets the result of this test:
A. The result is statistically significant at .05 level of significance. Evidence supports the claim that there is a correlation between percent GDP spent on healthcare and percentage of women receiving prenatal care.
B. The result is statistically significant at .05 level of significance. There is not enough evidence to show that there is a correlation between percent GDP spent on healthcare and percentage of women receiving prenatal care.
C. The result is not statistically significant at .05 level of significance. Evidence supports the claim that there is a correlation between percent GDP spent on healthcare and percentage of women receiving prenatal care.
D. The result is not statistically significant at .05 level of significance. There is not enough evidence to show that there is a correlation between percent GDP spent on healthcare and percentage of women receiving prenatal care.
i) We expect that if percentage of women receiving prenatal care increases then percentage of GDP health expenditure should increse. So, we expect there is a positive correlation between these two variable. So, we will test whether as an alternative hypothesis. So, our hypotheses are
Option (C) is correct
ii) As we have to do this test at 5% level of significance so, , and there are 14 observation in the data, so degrees of freedom = 14-2 = 12
So, the answer is 0.05,14
iii) using the excel function CORREL we get the observed correlation coefficient as
iv) the test statistic is
Answer : 1.98
v) p-value =
Answer : 0.036
vi) p-value = 0.036 < ,
Answer : (A) - We reject H0
vii) Option (A)
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