Lesson note #

Statistical Inference Testing of Hypothesis
Type I Error:
Rejection of the null hypothesis when it is true is called a type I error.

Type II Error:
Acceptance of the null hypothesis when it is false is called a type II error. Decision of the test for the Null The Null Hypothesis is Hypothesis True False Accept Correct decision Incorrect decision

Type II Error
Reject Incorrect decision .Type I Error Correct decision

Test Concerning Mean
One and Two tailed Tests:
A test procedure is called a one tailed test procedure if the alternative hypothesis is one sided. The test will be two tailed if the alternative hypothesis is two sided.

Example:
Let a specified value of population mean is 45. Construct the null and alternative hypothesis for the following questions; a) Do the sample data provide sufficient evidence to indicate that the population mean is greater than 45.

H 0 : µ = 45

H A : µ > 45
b)

leads to one tailed test (or right tailed test)

Do the sample data provide sufficient evidence to indicate that the population mean is less than 45.

H 0 : µ = 45

H A : µ < 45
c)

leads to one tailed test (or left tailed test)

Do the sample data provide sufficient evidence to indicate that the population mean is not equal to 45.

H 0 : µ = 45

H A : µ ≠ 45

leads to two tailed test (or both tailed test)

P(type I error)= P(correct decision)=1. H A and α .β = level of significance of the =Power of test. test Decision of the test for the Null Hypothesis Accept Reject Rejection Rule and Conclusion: Points to Note i) Rejection of H 0 indicates that an extremely unlikely sample has been drawn which implies that H 0 is very likely to be false. Formal Testing Procedure: A hypothesis testing procedure involves the following six steps: Step 1: Set up the null and alternative hypothesis ( H 0 & H A ). ii) iii) iv) v) Failing to reject H 0 does not prove that H 0 is true. It implies that H 0 may be true. ). .β ) is called the power of the test.α . In testing hypotheses. Step 4: Dtermine the critical values and the critical region of the test (using z or t table). Step 2: Specify a level of significance (α . the assumption is always made that the sample used in the test process is a random sample. H 0 . The alternative hypothesis decides whether the test is one tailed or two tailed. Step 3: Select an appropriate test – statistic (z or t-test) and compute the value of the test statistic using sample data assuming null hypothesis to be true. are determined before the test is carried out.Level of Significance and Power of a Test: • • The probability of making type I error is called the level of significance of the test denoted by α . The probability of making a type two error is denoted by β and (1 . It is assumed that the sampling distribution of the test statistic is known. The Null Hypothesis is True False Correct decision Incorrect decision P(Correct decision)=1. Type two error P(type II error) = β Incorrect decision Correct decision α.

Step 6: Decide if the null hypothesis is to be rejected and write the conclusion of the test.test t . Testing the Mean of a Population: 1. = n-1) x − µ0 σ n x − µ0 z= s n x − µ0 t= s n z= (when σ is known) (when σ is unknown and n ≥ 30) (when σ is unknown and n < 30 The test statistic (z or t ) is decided according to the following table.test None large sample n ≤ small Z .test Z .10 etc.test Z .05 or 0. 3.Step 5: State a rule to reject the null hypothesis. = 0. Test Statistic: H A : µ ≠ µ0 H A : µ > µ0 H A : µ < µ0 (Two tailed test) (One tailed test) OR OR with d. f.01 or 0. Normal Population Non-Normal Population Sample Size σ known σ unknown σ known σ unknown (n) n>30 Z . OR (One tailed test) Significance level: α . Null Hypothesis: H 0 : µ = µ 0 ( µ 0 is the hypothesized value of µ ) Alternative Hypothesis: OR 2.test None None sample Thus t-test is used only if i) The population is normal σ is unknown ( but s is known or can be computed) ii) iii) n < 30 .

we use χ -distribution (Chi square distribution). and the area right and left to that value according to the alternative hypothesis in the case of one tailed test and the area to either left or right according to the alternative hypothesis in one tailed test to be shaded. The test will be significant if H 0 is rejected otherwise the test will be insignificant.645 1. These values taken by the table. If the value of Z or t calculated lie in the shaded region or considered as critical region then null hypothesis will reject otherwise accept. Z tab and t tab are critical or tabulated values of the test statistic.05 0. 5.28 2 Zε 0 Critical values of t for (n-1) degree of freedom are obtained from the t-table. Test Concerning Variance In testing hypothesis concerning Variance the basic six steps of hypothesis will remain same only the difference of distribution and critical region defining procedure. Zα 0. Write about critical region and rejection rule from page 320. 6. 3rd paragraph. Critical Region: The critical region shown in the curve of normal distribution (z table) or t-distribution.10 1.645 0.33 2. The value find out by z or t table. Test Two tail One tail α. Conclusion: Reject or do not reject the null hypothesis on the basis of the above rejection rule. the degree of freedom will be (n − 1) s 2 χ = σ2 2 υ = n −1 Note: it is incomplete.05 1.576 2.96 1.01 2. reject H 0 and accept H A Z cal and t cal are calculated values of the test statistic.33 0. reject H 0 and accept H A OR If t cal > t tab . Rejection Rule: If Z cal > Z tab . 2 In testing concerning variance. For finding the value from table.02 2. Walpole .4.

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