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Culture Documents
February 8, 2007
4. Compute the Test Statistic: Specify the test statistic to be followed for testing.
Calculate the value of the test statistic using the problem given in the data. This
value is also termed as the observed value or the calculated value Fcalc .
5. Find the Tabulated Value of the Statistic: Find out the value of test statistic
from the distribution table provided. This value is also termed as tabulated value
or Ftab . In the case of examinations - either the Ftab will be provided with the
problem and / or you will be allowed to consult the tables. However the values of
Z statistic at 99% and 95% level may not always be provided. You should always
learn the value(s) of the Z statistic by heart.
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6. Compare and Conclude: Compare Fcalc and Ftab . If Fcalc ≤ Ftab then accept H0
else reject H0 .
Based on the result of the comparison write down your conclusion. The conclusion
should always be written in probabilistic terms and NEVER in deterministic terms.
CASE B: Population standard deviation is not known but sample is large (> 30)
√
n(X − µ0 )
Z =
s
where n = sample size
s = sample standard deviation
Sampling distribution : Standard Normal
CASE C: Population standard deviation is not known but sample is small (≤ 30)
√
n(X − µ0 )
t =
σ0
where n = sample size
X = sample mean
Sampling distribution : t distribution with (n-1) degrees of freedom. Also known as
“Students T”.
CASE A: Population are independent and their standard deviation are known and are
equal to σ1 and σ2 respectively
X1 − X2
Z = r
σ12 σ22
n1
+ n2
2
Sampling distribution : Standard Normal
CASE B: Population are independent and their standard deviation are not known and
the sample is large (n1 , n2 > 30) respectively
X1 − X2
Z = r
S12 S22
n1
+ n2
CASE C: Population are independent and their standard deviation are unknown but
equal; and the sample is small (n1 , n2 ≤ 30) respectively
X1 − X2
t = q
1 1
S n1
+ n2
where n1 n2 = sample sizes
X 1 X 1 = sample means
2 (n1 − 1)S12 + (n2 − 1)S22
S =
n1 + n2 − 2
(Pooled standard deviation)
Sampling distribution : t distribution with (n1 + n2 − 2) degrees of freedom. This
distribution is also known as “Fischer’s Non Paired T”.
CASE D: Population are correlated and the sample is small (n1 , n2 ≤ 30) respectively
√
nU
t =
SU
where n1 , n2 = sample sizes
U = (X1 − X2 )and U and SU
are calculated w.r.t U
Sampling distribution : t distribution with (n − 1) degrees of freedom. This distribution
is also known as “Fischer’s Paired T”.
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Sampling distribution : χ2 distribution with n degrees of freedom
CASE B: Population mean is unknown but the sample is large (N > 30)
s − σ0
Z = q
σ0 / (2n)
where n = sample size
where s = sample standard deviation
(n − 1)s2
χ2 =
σ0
Pn 2
i=1 (Xi − X )
=
σ0
where X = sample mean
where s = sample standard deviation
CASE A: Population are independent and the sample size is large (n1 , n2 > 30)
S1 − S2
Z = q
1 1
S( 2n1
− 2n2
)
where S = standard deviation in the
Fischer’s T distribution
CASE B: Population are independent and the sample sizes are small(n1 , n2 ≤ 30)
S12
F =
S22
where S1 S2 = are standard deviation of the
respective populations
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CASE A: Population are independent and the sample size is large (n1 , n2 > 30)
p − p0
Z = q
p0 (1−p0 )
n
where n = sample size
where p = sample proportion
Sampling distribution : Standard Normal distribution
CASE A: Population are independent and the sample size is large (n1 , n2 > 30)
p1 − p2
Z = q
p(1 − p)( n11 + 1
n2
)
where n1 , n2 = sample sizes
where p1 , p2 = sample proportions
(n1 p1 + n2 p2 )
p =
(n1 + n2 )
Sampling distribution : Standard Normal distribution
3 Things to Remember
• All the Greek symbols always stand for parameters of population whereas all the
non-Greek symbols always stand for the parameters of the sample.
• Sample standard deviation is calculated as follows:
v
n
1
u
u X
S = t (xi − x)2
(n − 1) i=1
• Alternative hypothesis of 6= type are always two tailed tests. In such a case both
sides of the distribution needs to be taken into account.
• Alternative hypothesis of < or > are always one tailed test. In such a case only
one side of the distribution is taken into account.
• Critical region or region of acceptance will be generally given in the question
paper. However critical regions of Z test may not be provided in the question
paper. The following values of Z distribution should always be remembered:
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• If Fcalc value comes out as negative (-ve), then the negative sign is to be ignored
and only the absolute value(s) needs to be compared
4 A Solved Example
BeeTEL - a renowned television manufacturing company of India - is considering pur-
chasing picture tubes from independent producers; rather than manufacturing them
in-house. They maintain high quality standards; BeeTEL will not consider buying a TV
tube unless convinced that the average life expectancy of the tube is more than 500
hours. Elektra Tubes Ltd. - a potential supplier - has supplied 9 tubes for testing. The
tests provided the following data: Mean life of the tube = 600 hours and variance
2500 hours. Consider yourself to be in charge of recommending tube suppliers to the
top management. Based on the performance results of Elektra Tubes as a supplier of
picture tubes to BeeTEL?
Answer:
Null Hypothesis H0 : (µ = 500)
Alternative Hypothesis H0 : (µ > 500)
Data provided:
Sample size = n = 9
Mean = µ = 600 hours
Variance = 2500 hours √
⇒ standard deviation = 2500 = 50 hours
Test statistic to be used:
√
n(X − µ0 )
t =
σ0
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Qn 2. Before an increase in excise duty on cigarettes, 800 persons out of a sample of
1000 were found to be smokers. After the increase in excise duties, 800 persons were
found to be smokers in a sample of 1200 people. Would you conclude that there has
been a significant reduction in smoking habits of the people after the increase in excise
duty? Hint: See Section 2.6, Zcalc = 6.842
Qn 3. An insurance agent claims that the average age of policy holders who insure
through him is less than the average for all agents — which is 30.5 years. A random
sample of 100 policy holders who had insured through him gave the following age
distribution. Calculate the arithmetic mean and standard deviation of this distribution
and use these values to test his claim at 5% level of significance. You are given that
Z(1.645) = 0.95 Hint: See Section 2.1, Zcalc = -2.681
Engineer A Engineer B
503 502
505 497
497 492
505 498
495 499
502 495
499 497
493 496
510 498
501 –
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that the stimulus will, in general, be accompanied by an increase in blood pressure?
Hint: Use Paired T. tcalc = 2.89
Qn 7. A survey conducted by an NGO on the daily wages in Rs. of unskilled workers
in two cities gave the following data. Test at 5% level the equality of variance of the
wages distributed in the cities. Given: F12,15 ≥ 0.95 = 0.025.
Qn 8. In a year there are 956 births in town A, of which 52.5% were males. In town
A and B combined this proportion in a total of 1406 births was 0.496. Is there any
significant difference in the proportion of male births in the two towns? Hint: Zcalc =
3.368