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Population
Variances Known

When the population variances are known, the difference of the means has a normal distribution. The
variance of the difference is the sum of the variances divided by the sample sizes. This makes sense,
hopefully, because according to the central limit theorem, the variance of the sampling distribution of the
sample means is the variance divided by the sample size, so what we are doing is add the variance of each
mean together. The test statistic is shown.

Population Variances Unknown, but both sample sizes large

When the population variances aren't known, the difference of the means has a Student's t distribution.
However, if both sample sizes are large enough, then you will be using the normal row from the t-table, so
your book lumps this under the normal distribution, rather than the t-distribution. This gives us the chance to
work the problem without knowing if the population variances are equal or not. The test statistic is shown,
and is identical to above, except the sample variances are used instead of the population
variances.

Population Variances Unknown, unequal with small

sample sizes

Ok, you're probably wondering how do you know if the variances are
equal or not if you don't know what they are. Some books teach the F-test to
test the equality of two variances, and if your book does that, then
you should use the F-test to see. Other books (statisticians) argue that if you
do the F-test first to see if the variances are equal, and then use the same level of significance to perform the
t-test to test the difference of the means, that the overall level of significance isn't the same. So, the Bluman
text tells the student whether or not the variances are equal and the Triola text.

Since you don't know the population variances, you're going to be using a Student's t distribution. Since the
variances are unequal, there is no attempt made to average them together as we will in the next situation. The
degrees of freedom is the smaller of the two degrees of freedom (n-1 for each). The "min" function means
take the minimum or smaller of the two values. Otherwise, the formula is the same as we used with large
sample sizes.

Population Variances Unknown but equal with small sample sizes

If the variances are equal, then an effort is made to average them together. Now, equal does not mean
identical. It is possible for two variances to be statistically equal but be numerically different. We will find a
pooled estimate of the variance which is simply the weighted mean of the variance. The weighting factors are
the degrees of freedom.

Once the pooled estimate of the variance is computed, this mean (average) variance is used in the place of the
individual sample variances. Otherwise, the formula is the same as before. The degrees of freedom are the
sum of the individual degrees of freedom.

Two Proportions
 2
Remember that the normal distribution can be used to approximate the binomial distribution in
certain cases. Specifically, the approximation was considered good when np and nq were both at
least 5. Well, now, we're talking about two proportions, so np and nq must be at least 5 for both

samples.

We don't have a way to specifically test two

proportions for values, what we have is the
ability to test the difference between the
proportions. So, much like the test for two means from
independent populations, we will be looking at the
difference of the proportions.

We will also be computing an average proportion and calling it p-bar. It is the total number of successes
divided by the total number of trials. The definitions which are necessary are shown to the right.

The test statistic has the same general pattern as before (observed minus expected divided by standard error).
The test statistic used here is similar to that for a single population proportion, except the difference of
proportions are used instead of a single proportion, and the value of p-bar is used instead of p in the standard
error portion.

Since we're using the normal approximation to the binomial, the difference of proportions has a normal
distribution. The test statistic is given.

Some people will be tempted to try to simplify the denominator of this test statistic incorrectly. It can be
simplified, but the correct simplification is not to simply place the product of p-bar and q-bar over the sum of
the n's. Remember that to add fractions, you must have a common denominator, that is why this
simplification is incorrect.

The correct simplification would be to factor a p-bar and q-bar out of the two expressions. This is usually the
formula given, because it is easier to calculate, but I wanted to give it the other way first so you could
compare it to the other formulas and see how similar they all are.