Small business. The director of a small business development center located in a mid-sized city is reviewing data about its clients. In particular, she is interested in examining if the distribution of business owners across the various stages of the business life cycle is the same for white-owned and Hispanic-owned businesses. The data are shown below.

a) Will you test goodness-of-fit, homogeneity, or independence?

b) Write the appropriate hypotheses.

c) Find the expected counts for each cell and explain why chi-square procedures are not appropriate for this table.

d) Create a new table by combining categories so that a chi-square procedure can be used.

e) With this change in the table, what has happened to the number of degrees of freedom?

f) Test your hypothesis about the two groups and state an appropriate conclusion.

Transcribed Image Text:

Stage in Business White-Owned Hispanic-Owned Planning 11 9 14 11 Starting Managing Getting Out 20 15 21