In 1991 the Consumer Bankruptcy Project conducted a study to determine the education levels of people who declare bankruptcy. The percentages are shown in the following table. Also shown in the table is the observed frequency for these education levels from a random sample of individuals who filed for bankruptcy in 2017.

a. Using ? = 0.05, perform a chi-square test to determine if the probability distribution for the education levels of individuals who filed for bankruptcy changed between 1991 and 2017.

b. Determine the p-value using Excel and interpret its meaning.

c. What conclusions can be drawn about the type of individual who filed for bankruptcy in 2017 vs. the type of individual who filed for bankruptcy in 1991?

Transcribed Image Text:

Observed Probability 1991 (%) Frequency 2017 Education Level No high school diploma 21.8 11 High school diploma Some college College diploma 31.7 38 35.1 56 8.6 15 Advanced degree 2.8 5 Total 100 125