Question

Suppose a study wants to know how residents prepare for retirement in LA County. A random sample of 200 residents was selected. The researcher asked each resident what proportion of annual income was saved up in the bank for retirement? The data shows that people save 5% of their annual income for retirement on average.

What is the parameter of interest in this study?
O The average percentage of annual income saved for retirement among all residents in LA County.
O The proportion of all residents in LA County who save some of their annual income for retirement.
O The average money (in US dollars) saved for retirement among all residents in LA County.
O The proportion of all residents in LA County who save more than 5% of their annual income for retirement.

Answer 1

The study's parameter of interest is the average percentage of annual income saved for retirement among all residents in LA County, which determines the overall average saving behavior regarding retirement preparation in the county.

Step-by-step explanation:

The parameter of interest in this study regarding how residents prepare for retirement in LA County is the average percentage of annual income saved for retirement among all residents in LA County. This parameter represents the overall average saving behavior of the population and is estimated using the sample mean of 5% from the random sample of 200 residents.

The study focuses specifically on the saving patterns in terms of the percentage of annual income that residents put aside for their retirement. It is not concerned with the actual dollar amounts saved, nor is it evaluating the proportion of residents who save differing amounts or who save anything at all. Instead, it looks at the typical or average proportion of income that is saved county-wide.

Understanding this average percentage saved can help in assessing the overall preparedness of residents for retirement and examining if current saving habits align with the recommended savings rates suggested by economists, which is around 15% of income for a secure retirement.