Step 1: Specify the population value of interest — recent article Wall Street Journal titled Identity Theft Moves Online Crime Rings

A recent article in The Wall Street Journal titled “As Identity Theft Moves Online, Crime Rings Mimic Big Business” states that 39% of the consumer scam complaints by American consumers are about identity theft. Suppose a random sample of 90 complaints is obtained. Of these complaints, 40 were regarding identity theft. Based on these sample data, what conclusion should be reached about the statement made in The Wall Street Journal? (Test using α = 0.10.)

SOLUTION

Step 1: Specify the population value of interest.

The value of interest is the population proportion, .

Step 2: Formulate the null and alternative hypotheses.

H0: p = 0.39

HA: p 0.39

Step 3. Specify the significance level.