Question

One of the biggest issues facing e-retailers is the ability to turn browsers into buyers. This is measured by the conversion rate, the percentage of browsers who buy something in their visit to a site. The conversion rate for a company's website was 10%. The website at the company was redesigned in an attempt to increase its conversion rates. A sample of 200 browsers at the redesigned site was selected and it was found that 28 actually made a purchase. The company officials would like to know if there is evidence of an increase in conversion rate at the 5% level of significance. What is the p-value?

Answer 1

Here we have x =28, n-200, p =0.14 Hypotheses are: Ho: p 0.1 Ha: p0.1 Level of significance : α=0.05 Test is right tailed The standard deviation is: -sqrt((0.1*(1-0.1))/200) 0.0212 Test Statistics p-p (0.14-0.1)/(0.0212) = 1.89 Critical value: CV = 1.64 Rejection Region: If z > 1.64, Reject HO Decision: Since test statistics lies in rejection region so we reject the null hypothesis P-value: P-value-0.0294 Decision: Since p-value is less than level of significance so we reject the null hypothesis Excel function for critical value: NORMSINV(1-0.05) Excel function for p-value: -1-NORMSDIST(1.89)

Hence, the p-value is 0.0294.