Answer

Hypothesis testing can be defined as the statistical process of analyzing the statement of

hypothesis formed initially whether that is true or false on the basis of different statistical tools

like t-test, z-test or p-value test. It is possible to conduct hypothesis testing in single population,

two population or more than two populations as well. However, we would rather expand the idea

of hypothesis testing to two populations because it makes possible to conduct the research more

effectively and compare the different results of different populations to draw a logical conclusion

[ CITATION Lin \l 1033 ]. For instance, determining the changes found in both male and female after

joining gym would provide more effective result than to determine in male only or female only.

Moreover, we can be able to measure whether there is significant difference or no significant

difference between two populations at certain significance level where the two populations may

be dependent or independent as well [ CITATION Lup93 \l 1033 ].

Example:

A researcher is conducting a research on two companies to find out the significant

differences on the attendance of employees of ABC and MNC Company. For carrying out the

research, random sample of 40 and 55 employees was taken from the companies respectively.

Other information are listed below:

Company Average Attendance Standard Deviation

ABC 80 17
MNC 65 12

Significance level = 5%

Solution,

ABC MNC
n₁ = 40 n₂ = 55
 x̄1 = 80 x̄2 = 65
S1 = 17 S2 = 12

Hypothesis:

Null hypothesis H₀: µ1=µ2 i.e. there is no significant difference on mean attendance of

employees of ABC and MNC Company.

Alternative hypothesis H₁: µ1≠µ2 i.e. there is significant difference on mean attendance of

employees of ABC and MNC Company.

Selection of hypothesis test:

Z-test is selected because the size of population is greater than 30. Critical z value = zα/2 = 2.57

(from z-table)

Choosing level of significance:

The hypothesis is tested on 95% confidence level which is 0.05 level of significance.

Calculation of z-value:

Calculated z-value = (x̄₁- x̄₂) / [√ (S₁^2/ n₁) + (S₂^2/ n₂)]

= (80-65) / [√ (17^2 / 40) + (12^2 / 55)]

= 4.78

Interpretation:
Here, calculated z-value is greater than critical z-value i.e., 4.78 > 2.57 the null hypothesis is

rejected which depicts that there is significance difference on mean attendance of employees of

ABC and MNC Company.

References

Lupton, R. (1993). Statistics in Theory and Practice. New Jersey: Princeton University Press.

Lind, D. A., Marchal, W. G., & Wathen, S. A. (2019). Statistical Techniques in Business and

Economics. New York: McGraw-Hill Education.