A sample of human resource executives was asked how their company planned to change their work force over the next 12 months. A categorical response variable showed three options: no change, add employees, lay off employees. Another categorical variable indicated if the company was private or public. The sample data for 180 companies are summarized as followed
(Private) add employees 37 no change 19 lay off employees 16
(Public add employees 32 no change 34 lay off employees 42
1. Perform a test of independence to find if the employment plan for the next 12 months is independent on the type of company. At a .05 level significance what is your conclusion?
2. Explain any differences in the employment plans for public or private companies over the next 12 months.