Is the antilock braking system (ABS) now available as a standard feature on many cars really effective? The ABS works by automatically pumping brakes extremely quickly on slippery surfaces so the brakes do not lock and thus avoiding an uncontrollable skid. If ABS is effective, we would expect that cars equipped with ABS would have fewer accidents, and the costs of repairs for the accidents that do occur would be smaller. To investigate the effectiveness of ABS, the Highway Loss Data Institute gathered data on a random sample of 500 General Motors cars that did not have ABS and 500 GM cars that were equipped with ABS. For each year, the institute recorded whether the car was involved in an accident and, if so, the cost of making repairs.
Forty-two cars without ABS and 38 ABS-equipped cars were involved in accidents. The costs of repairs were recorded. Using frequency of accidents and cost of repairs as measures of effectiveness, can we conclude that ABS is effective? If so, estimate how much better are cars equipped with ABS compared to cars without ABS.