## An insurance company wants to study whether offering incentives for preventative care reduces overall health care costs. They select a

Question

An insurance company wants to study whether offering incentives for preventative care reduces overall
health care costs. They select a random sample of 200 of their customers.
The company ranks the customers according to total health care costs for the previous year. For every 2
customers, in order, from the list, the insurance company randomly assigns one customer to be offered the
incentive and the other to the control group.
What type of experiment design is this?
A
Stratified
B
Randomized block
Cluster
D
Completely randomized
Matched pairs

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6 months 2021-07-31T12:34:29+00:00 2 Answers 18 views 0

The correct option is;

Stratified sampling

Step-by-step explanation:

In the question, the insurance company intends to study and understand the relationship between the health care cost of customers and the provision of incentives for preventative care by two groups, each having one of the two given attributes under study, which are;

a) One group consist of customers having high health care cost and offered incentives for preventative care

b) The other group consist of customers having only high health care cost without incentives

Therefore, the insurance company customers are stratified into groups based on health care cost and again into groups that have high health care cost and are offered preventative care and those that have only high heath care cost, which is the process used to implement a stratified sampling technique

Stratified sampling is one in which the population are grouped into subgroups also known as strata by the researcher that have homogenous attributes such that the researcher is able to determine the relationships existing between two groups and be able to come to a conclusion as to the effect of the attribute by which the groups stratified