The finance director for North Dakota has established a toll-free tax assistance helpline in response to the large number of complaints citizens have made about the complexity of the state’s income tax forms. To determine the effectiveness of the tax assistance program, she collects a random sample of 500 tax forms early in the tax season.

Usage is coded as a dummy variable where 1 = filer used helpline and 0 = filer did not use helpline. Error is coded as a dummy variable where 1 = no errors found on tax return and 0 = one or more errors found on tax return. The director generates the following contingency table:

Present the research and null hypotheses, percentage the table, and calculate chi-square. What can you tell the director about the effect the tax assistance helpline is having on error rates?

Transcribed Image Text:

Error Found on Tax Return No Yes Used Tax Assistance Helpline No 139 93 Yes 190 78