Question

A national organization that conducts research on the cost and quality of health care in the U.S. reported that, in 2012, U.S. families spent an average of $9,590 on health care expenses. Suppose you decide to test whether the average in 2015 is greater than the average in 2012. After conducting the appropriate statistical test, you find a P-value of 0.022. If the level of significance is 0.05, which of the following is the best interpretation of the P-value?

a. The P-value of 0.022 indicates that there is a 2.2% chance that the 2015 average is greater than the average amount spent in 2012.
b. The P-value of 0.022 provides weak evidence that the average in 2015 average is greater than the average amount spent in 2012.
c. The P-value of 0.022 provides strong evidence that the 2015 average is greater than the average amount spent in 2012.
d. The P-value of 0.022 indicates that there is a very low probability that the 2015 average is different than average amount spent in 2012.

Answer 1

c. The P-value of 0.022 provides strong evidence that the 2015 average is greater than the average amount spent in 2012.

Explanation:

The P-value indicates the probability of having this sample results given that the null hypothesis is true. If the P-value is low enough (smaller than the significance level), we have evidence to reject the null hypothesis, as there is little chance the null hypothesis is true and this sample result is due to chance.