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Hypothesis Testing;

Z-Test, T-Test, F-Test


BY NARENDER SHARMA
2
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What is Hypothesis?

Hypothesis is a predictive statement, capable of


being tested by scientific methods, that relates an
independent variables to some dependent
variable.
A hypothesis states what we are looking for and it is
a proportion which can be put to a test to
determine its validity
e.g.
Students who receive counseling will show a greater
increase in creativity than students not receiving
counseling

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Characteristics of Hypothesis

Clear and precise.


Capable of being tested.
Stated relationship between variables.
limited in scope and must be specific.
Stated as far as possible in most simple terms so that the same is
easily understand by all concerned. But one must remember that
simplicity of hypothesis has nothing to do with its significance.
Consistent with most known facts.
Responsive to testing with in a reasonable time. One cant spend a
life time collecting data to test it.
Explain what it claims to explain; it should have empirical reference.

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Null Hypothesis

It is an assertion that we hold as true unless we have


sufficient statistical evidence to conclude otherwise.
Null Hypothesis is denoted by 0
If a population mean is equal to hypothesised mean
then Null Hypothesis can be written as

0 : = 0

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Alternative Hypothesis

The Alternative hypothesis is negation of null


hypothesis and is denoted by
If Null is given as 0 : = 0

Then alternative Hypothesis can be written as


: 0
: > 0
: < 0

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Level of significance and
confidence

Significance means the percentage risk to reject a


null hypothesis when it is true and it is denoted by .
Generally taken as 1%, 5%, 10%
(1 ) is the confidence interval in which the null
hypothesis will exist when it is true.

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Risk of rejecting a Null Hypothesis
when it is true

Risk Confidence
Designation Description

More than $100 million
0.001 0.999
Supercritical (Large loss of life, e.g. nuclear
0.1% 99.9%
disaster
0.01 0.99 Less than $100 million
Critical
1% 99% (A few lives lost)
0.05 0.95 Less than $100 thousand
Important
5% 95% (No lives lost, injuries occur)
0.10 0.90 Less than $500
Moderate
10% 90% (No injuries occur)

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Type I and Type II Error

Decision

Situation Accept Null Reject Null


Null is true Correct Type I error
( )

Null is false Type II error Correct


( )

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Two tailed test @ 10
5% Significance level

Acceptance and Rejection


regions in case of a Two Suitable When 0 : = 0
tailed test : 0



/ /
( = 0.025 2.5%) ( = 0.025 2.5%)
(1 ) = 95%
0 : = 0

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Left tailed test @ 11
5% Significance level

Acceptance and Rejection


regions in case of a left tailed Suitable When 0 : = 0
test : < 0


/
( = 0.05 5%) (1 ) = 95%

0 : = 0

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Right tailed test @ 12
5% Significance level

Acceptance and Rejection


regions in case of a Right Suitable When 0 : = 0
tailed test : > 0


/
(1 ) = 95% ( = 0.05 5%)

0 : = 0

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Procedure for Hypothesis
Testing

State the null State a Decide a test Calculate the


(Ho)and alternate significance level; statistics; z-test, t- value of test
(Ha) Hypothesis 1%, 5%, 10% etc. test, F-test. statistics

Compare
Calculate the p-
the p-value P-value >
value at given
with Calculated Accept Ho
significance level
calculated value
from the table
value

P-value <
Calculated Reject Ho
value
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Hypothesis
Testing of Z-TEST AND T-TEST

Means

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Z-Test for testing means

Test Condition Test Statistics


Population normal and
infinite
Sample size large or small, 0
Population variance is
=
known
Ha may be one-sided or
two sided

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Z-Test for testing means

Test Condition Test Statistics


Population normal and
finite,
Sample size large or small,
0
Population variance is =

known 1

Ha may be one-sided or
two sided

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Z-Test for testing means

Test Condition Test Statistics


Population is infinite and
may not be normal, 0
Sample size is large, =
Population variance is
unknown
Ha may be one-sided or
two sided

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Z-Test for testing means

Test Condition Test Statistics


Population is finite and may
not be normal, 0
=
Sample size is large, 1

Population variance is
unknown
Ha may be one-sided or
two sided

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T-Test for testing means

Test Condition Test Statistics


Population is infinite and
normal, 0
Sample size is small,
=

Population variance is
. . = 1
unknown
Ha may be one-sided or 2
two sided =
( 1)

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T-Test for testing means

Test Condition Test Statistics


Population is finite and 0
normal, =
1
Sample size is small,
Population variance is
. . = 1
unknown
Ha may be one-sided or 2
two sided =
( 1)

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Hypothesis
testing for
difference Z-TEST, T-TEST

between
means

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Z-Test for testing difference
between means

Test Condition Test Statistics


Populations are normal
Samples happen to be
large, 1 2
=
Population variances are 2 2
known 1 2
+
Ha may be one-sided or 1 2
two sided

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Z-Test for testing difference
between means

Test Condition Test Statistics


Populations are normal
Samples happen to be large,
Presumed to have been 1 2
drawn from the same
population =
1 1
Population variances are 2 +
known 1 2
Ha may be one-sided or two
sided

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T-Test for testing difference
between means

Test Condition Test Statistics


Samples happen to be small,
Presumed to have been
drawn from the same 1 2
population =
2 2
1 1 1 + 2 1 2 1 1
Population variances are +
unknown but assumed to be
1 + 2 2 1 2
equal
Ha may be one-sided or two . . = (1 + 2 2)
sided

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Hypothesis
Testing for
comparing PAIRED T-TEST

two related
samples

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Paired T-Test for comparing
two related samples

Test Condition Test Statistics


Samples happens to be 0
small =
.
Variances of the two
populations need not be ( 1) . .
equal
= Mean of differences
Populations are normal
. = Standard deviation of differences
Ha may be one sided or
two sided =

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Hypothesis
Testing of Z-TEST

proportions

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Z-test for testing of proportions

Test Condition Test statistics


Use in case of qualitative
data
Sampling distribution may =
take the form of binomial .
probability distribution
Ha may be one sided or two
sided
=
= .
= . .

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Hypothesis
Testing for
difference Z-TEST

between
proportions

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Z-test for testing difference
between proportions

Test Condition Test statistics


Sample drawn from two
1 2
different populations =
1 1 2 2
Test confirm, whether the +
1 2
difference between the
proportion of success is 1 = proportion of success in sample one
significant
2 = proportion of success in sample two
Ha may be one sided or
two sided

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Hypothesis
testing of
equality of F-TEST
variances of
two normal
populations

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F-Test for testing equality of 32
variances of two normal
populations

Test conditions Test statistics


The populations are normal
2
Samples have been drawn 1
randomly
= 2
2
Observations are
independent; and 1 1 and 2 1 d. f.
There is no measurement
error
2
1 is the sample estimate for 1
2

Ha may be one sided or two 2


2 is the sample estimate for 2
2
sided

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Limitations of the test of
Hypothesis

Testing of hypothesis is not decision making itself; but help


for decision making
Test does not explain the reasons as why the difference
exist, it only indicate that the difference is due to
fluctuations of sampling or because of other reasons but
the tests do not tell about the reason causing the
difference.
Tests are based on the probabilities and as such cannot be
expressed with full certainty.
Statistical inferences based on the significance tests
cannot be said to be entirely correct evidences
concerning the truth of the hypothesis.
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Thank You
35
Shakehand with Life
Corporate Training and Management Education

www.shakehandwithlife.in , www.shakehandwithlife.puzl.com

Leading Training, Coaching, Consulting services in Delhi NCR for Managers at all levels,
Future Managers and Engineers in MBA and B.E. / B. Tech.,
Students in Graduation and Post-Graduation, Researchers, Academicians.
Training with MS-Excel for managerial decision making skills,
Working with MS-Excel to solve all mathematical and statistical problem.

Call Now WhatsApp


9468267324, 8684861131 9468267324

E-mail: shakehandwithlife@gmail.com
www.shakehandwithlife.in