Reconsider the previous question about Medicare audits. A statistics student decides to use the Two Proportions applet to find a p-value to investigate whether there is an association between the size of a claim and whether it is judged to be an overpayment. Here is the output:  

a. The above graph is a histogram of 1,000 possible values of difference in proportion of claims judged to be overpayments between small-and medium-sized claims. At what numeric value does this graph center? Explain why that makes sense.

b. The p-value is computed to be 0.184. Shade the region on the above graph that represents the p-value.
c. Interpret the p-value reported in part (b) in the context of the study.
d. Based on the p-value what would you conclude about strength of evidence?
e. Calculate an appropriate standardized statistic and interpret the standardized statistic in the context of the study.
f. Do the p-value and standardized statistic both lead you to the same conclusion?
g. Use the 2SD method to find a 95% confidence interval for the parameter of interest. Report this interval.
h. Interpret the interval reported in part (g) in the context of the study.
i. Is your conclusion from using either the p-value or the standardized statistic consistent with your finding from the 95% confidence interval? How are you deciding?
j. State a complete conclusion about this study, including significance, estimation (confidence interval), causation, and generalization. Be sure to explain how you are arriving at your conclusion.

Transcribed Image Text:

Total Shuffles = 1000 Mean = 0.005 SD = 0.125 200 150 100 50 -0.48 -0.28 -0.08 0.12 0.32 Shuffled difference in proportion Number of shuffles