Auto Insurance The cost of automobile insurance has become a sore subject in California because the rates are dependent on so many variables, such as the city in which you live, the number of cars you...

Auto Insurance
The cost of automobile insurance has become a sore subject in California because the rates are dependent on so many variables, such as the city in which you live, the number of cars you insure, and the company with which you are insured. Here are the annual 2006–2007 premiums for a single male, licensed for 6–8 years, who drives a Honda Accord 12,600 to 15,000 miles per year and has no violations or accidents.¹⁰

a. Why would you expect these pairs of observations to be dependent?

b. Do the data provide sufficient evidence to indicate that there is a difference in the average annual premiums between Allstate and 21st Century insurance? Test using a = .01.

c. Find the approximate p-value for the test and interpret its value.

d. Find a 99% confidence interval for the difference in the average annual premiums for Allstate and 21st Century insurance.

e. Can we use the information in the table to make valid comparisons between Allstate and 21st Century insurance throughout the United States? Why or why not?