Introduction to Inferential Statistics

Objectives
At the end of this module, the students will be able to:
1. Describe Inferential statistics;
2. Appreciate the importance of Inferential statistics; and
3. Demonstrate competence on Inferential statistics.

Statistical Inference Defined

Statistical inference consists of estimation of parameters and testing of hypothesis.

I. Related, Dependent and Independent Samples

A. Related samples – have been drawn from the same population or identical populations

Example
Suppose we want to estimate the difference between the mean weights of all participants
before and after a weight loss program. To accomplish this, suppose we take a sample of 40
participants and measure their weights before and after the completion of this program.
 Note that these two samples include the same 40 participants. Such samples are also called
paired or matched samples.

B. Dependent samples. Also called paired or matched samples.

Case example
Suppose we want to estimate the difference between the mean weights of all participants
before and after a weight loss program. We take a sample of 40 participants and measure their
weights before and after the completion of this program. These two samples include the same 40
persons, so called dependent samples.

Note: Both samples are the same size.

C. Independent samples – drawn from two different populations and the elements of one
sample have no relationship to the elements of the second sample.

Case example

Suppose we want to estimate the difference between the mean salaries of all male and
female executives. To do so, we draw two samples, one from the population of male executives
and another from the population of female executives.

 The two samples are independent because they are drawn from two different populations,
and the samples have no effect on each other.
II. Sampling Techniques (Mann, 2004; Cochran, 1977)

Sample Design:
In sample studies, we have to make a plan regarding the size of the sample,
selection of the sample, collection of the sample data and preparation of the final results
based on the sample study. The whole procedure involved is called the sample design.
The term sample survey is used for a detailed study of the sample. In general, the term
sample survey is used for any study conducted on the sample taken from some real world
data.
Sampling Frame:
A complete list of all the units of the population is called the sampling frame. A
unit of population is a relative term. If all the workers in a factory make a population, a
single worker is a unit of the population. If all the factories in a country are being studied
for some purpose, a single factory is a unit of the population of factories. The sampling
frame contains all the units of the population. It is to be defined clearly as to which units
are to be included in the frame. The frame provides a base for the selection of the
sample.
Population:
The word population or statistical population is used for all the individuals or
objects on which we have to make some study. We may be interested to know the quality
of bulbs produced in a factory. The entire product of the factory in a certain period is
called a population. We may be interested in the level of education in primary schools.
All the children in the primary schools will make a population. The population may
contain living or non-living things. The entire lot of anything under study is called
population. All the fruit trees in a garden, all the patients in a hospital and all the cattle in
a cattle form are examples of population in different studies.
Finite Population:
A population is called finite if it is possible to count its individuals. It may also be
called a countable population. The number of vehicles crossing a bridge every day, the
number of births per years and the number of words in a book are finite populations. The
number of units in a finite population is denoted by N. Thus N is the size of the
population.
Infinite Population:
Sometimes it is not possible to count the units contained in the population. Such a
population is called infinite or uncountable. Let us suppose that we want to examine
whether a coin is true or not. We shall toss it a very large number of times to observe the
number of heads. All the tosses will make an infinite or countable infinite population.
The number of germs in the body of a patient of malaria is perhaps something which is
uncountable.
Target and Sampled Population:
Suppose we have to make a study about the problems of the families living in
rented houses is a certain big city. All the families living in rented houses are our target
population. The entire target population may not be considered for the purpose of
selecting a sample from the population. Some families may not be interested to be
included in the sample. We may ignore some part of the target population to reduce the
 cost of study. The population out of which the sample is selected is called sampled
population or studied population.

How many samples can be drawn from the finite population?

 From the combination N
n

Example
1. How many different samples of size n can be drawn from a finite population of size N when
N=12 and n=2?

Solution 12 = 12.11 = 66 different combination of samples that

2 2! can be drawn

2. If a population consists of the N = 5 elements a,b,c,d and e (which can be the height of 5 men,
weight of 5 boars, or prices of 5 commodities, etc.), there are

5 = 5.4.3 = 10
3 3!

Possible sample size n = 3. They consist of the elements abc, abd, abe, acd, ace, ade, bcd, bce, bde,
and cde.

 In a random sample, each element of the population has a chance (or probability) of being
selected or included in the sample

 Only samples that are randomly drawn/selected/chosen are valid for quantitative analysis using
statistical tools.

III. Common Probability Sampling Techniques/Designs

(Online Source: QMSS E-Lessons. Columbia Center for New Media Teaching and
Learning. Institute for Social and Economic Research and Policy.)

1. Simple Random Sampling (SRS) - The most widely known type of a random sample is
the simple random sample (SRS). This is characterized by the fact that the probability of
selection is the same for every case in the population. Simple random sampling is a method
of selecting n units from a population of size N such that every possible sample of size n
has equal chance of being drawn.

2. Systematic Sampling - This method of sampling is at first glance very different from SRS.
In practice, it is a variant of simple random sampling that involves some listing of elements
 - every nth element of list is then drawn for inclusion in the sample. Say you have a list of
10,000 people and you want a sample of 1,000.

Creating such a sample includes three steps:

First: Divide number of cases in the population by the desired sample size. In this
example, dividing 10,000 by 1,000 gives a value of 10.

Second: Select a random number between one and the value attained in Step 1. In this
example, we choose a number between 1 and 10 - say we pick 7.

Third: Starting with case number chosen in Step 2, take every tenth record (7, 17, 27,
etc.).

More generally, suppose that the N units in the population are ranked 1 to N in some order
(e.g., alphabetic). To select a sample of n units, we take a unit at random, from the 1st k
units and take every kth unit thereafter.

The advantages of systematic sampling method over simple random sampling include:

 It is easier to draw a sample and often easier to execute without mistakes. This is a
particular advantage when the drawing is done in the field.
 Intuitively, you might think that systematic sampling might be more precise than SRS. In
effect it stratifies the population into n strata, consisting of the 1st k units, the 2nd k units,
and so on. Thus, we might expect the systematic sample to be as precise as a stratified
random sample with one unit per stratum. The difference is that with the systematic one
the units occur at the same relative position in the stratum whereas with the stratified, the
position in the stratum is determined separately by randomization within each stratum.

3. Stratified Random Sampling - n this form of sampling, the population is first divided into
two or more mutually exclusive segments based on some categories of variables of interest
in the research. It is designed to organize the population into homogenous subsets before
sampling, then drawing a random sample within each subset. With stratified random
sampling the population of N units is divided into subpopulations of units respectively.
These subpopulations, called strata, are non-overlapping and together they comprise the
whole of the population. When these have been determined, a sample is drawn from each,
with a separate draw for each of the different strata. The sample sizes within the strata are
denoted by respectively. If an SRS is taken within each stratum, then the whole sampling
procedure is described as stratified random sampling.

4. Cluster Sampling - In some instances the sampling unit consists of a group or cluster of
smaller units that we call elements or subunits (these are the units of analysis for your
study). There are two main reasons for the widespread application of cluster sampling.
Although the first intention may be to use the elements as sampling units, it is found in
many surveys that no reliable list of elements in the population is available and that it would
 be prohibitively expensive to construct such a list. In many countries there are no complete
and updated lists of the people, the houses or the farms in any large geographical region.

Even when a list of individual houses is available, economic considerations may point to the
choice of a larger cluster unit. For a given size of sample, a small unit usually gives more
precise results than a large unit. For example a SRS of 600 houses covers a town more evenly
than 20 city blocks containing an average of 30 houses apiece. But greater field costs are
incurred in locating 600 houses and in traveling between them than in covering 20 city blocks.
When cost is balanced against precision, the larger unit may prove superior.

Important things about cluster sampling:

1. Most large scale surveys are done using cluster sampling;

2. Clustering may be combined with stratification, typically by clustering within strata;
 3. In general, for a given sample size n cluster samples are less accurate than the other types
of sampling in the sense that the parameters you estimate will have greater variability than
an SRS, stratified random or systematic sample.

IV. Statistical Hypothesis (Lind, et al., 2006, Mann, 2004, Freund and Simon, 1997)

 an educated guess.
 an assertion or conjecture concerning one or more population
 A statement about a population parameter developed for the purpose of testing
 indicates the expectation of the researcher regarding certain variables
 refers to a statement postulating a possible relationship between two or more variables or
phenomenon
 provides the most specific way in which an answer to a problem can be stated
 a preliminary/tentative explanation/postulate by the researcher about what he considers the
outcome of an investigation will be

A. Characteristics of Hypothesis (Lind, et al., 2006, Mann, 2004, Freund and Simon,
1997)

 must be stated in simple and understandable terms

 should have elucidating power
 should provide an acceptable explanation of the phenomenon
 should correspond with existing knowledge
 must be verifiable
 should be TESTABLE. A condition for testability is CLEAR and UNAMBIGOUS
CONCEPTS

B. Purpose and Functions of a Hypothesis

(Lind, et al., 2006, Mann, 2004, Freund and Simon, 1997)

 gives direction to an investigation

 offers explanation for the relationships between those variables that can be empirically tested
 provide proof that the researcher has sufficient background knowledge to be able him/her to
make suggestions in order to extend existing knowledge
 structures the next phase in the investigation thus provides continuity to the examination of
the problem

C. Kinds of Hypothesis (Lind, et al., 2006, Mann, 2004, Freund and Simon, 1997)

1. Research hypothesis
 A research hypothesis is a tentative explanation for certain behaviors, phenomena, or
events that have occurred or will occur.
  The hypothesis states the researcher's expectations concerning the relationship between the
variables in the research problem.
 The hypothesis is a refinement of the research problem. It is the most specific statement of
the problem.
 The hypothesis states what the researcher thinks the outcome of the study will be.
 The researcher collects data that either supports the hypothesis or does not support it.
 The hypothesis is formulated following the review of related literature and prior to the
execution of the study. The related literature leads the researcher to expect a certain
relationship.
 "A good hypothesis states as clearly and concisely as possible the expected relationship (or
difference) between two variables and defines those variables in operational, measurable
terms”.
 "A well-stated and defined hypothesis must be (and will be if well-formulated and stated)
testable. It should be possible to support or not support the hypothesis by collecting and
analyzing data".

Example: In the survey of related literature, it was observed that first grade girls show better
reading comprehension than first grade boys. To state that as a research hypothesis,
it would be a causal-comparative research study.

Research Hypothesis: Girls will achieve higher reading comprehension test scores than boys
at the end of the first grade.

Or: Gender has influence on the reading comprehension of first grade children.

2. Null hypothesis or Non-directional (Lind, et al., 2006, Mann, 2004, Freund and Simon,
1997)

 denoted by H0
 usually formulated for the expressed purpose of being rejected or refuted in order to
support the alternative hypothesis.
 typically a hypothesis of “no effect” (difference, relationship, effect, impact, influence,
etc.) that is, it is the negation of the point one is trying to make.
 presumed true until statistical evidence, in the form of a hypothesis test, indicates
otherwise — that is, when the researcher has a certain degree of confidence, usually 95%
to 99%, that the data does not support the null hypothesis.
 Operationally, Ho is rejected in favor of Ha.

Null hypothesis: There is no significant difference of the reading comprehension mean scores
between the first grade boys and girls.
 Symbolized by: Ho : μ1 = μ2

where: Ho = the null hypothesis

μ1 = the mean of population 1 (boys), and
μ2 = the mean of population 2 (girls)

3. Alternative hypothesis or alternate non-directional

 usually denoted by Ha or H1
 a claim about a population parameter that will be true if the null hypothesis is false
 the possibility that an observed effect is genuine and the null hypothesis is the rival
possibility that it has resulted from random chance.
 the operational statement of the experimenter’s research hypothesis
 states that when the study data is obtained, that the results will be different from what one
would expect to find by chance

Alternative hypothesis. There is a significant difference of the reading comprehension mean

scores between the first grade boys and girls.

Symbolized by: Ha : μ1 ≠ μ2

4. Alternate - Directional Hypothesis

 usually denoted by Ha or H1
 state that the data will be either greater than or less than what would be expected by chance.

Directional hypothesis: The first grade girls mean score in reading comprehension is higher
than that of the first grade boys.

Symbolized by: Ha : μ1 > μ2

A well stated hypothesis fulfills the following criteria:

 stated clearly and concisely;

 testable (you don't set up to prove, simply to accept or reject);
 should agree with and logically follow the preponderance of existing research problem;
 states clearly and precisely the expected relationships between variables
V. Statistical Errors (Lind, et al., 2006)

Researcher

Null Does not reject Rejects

Hypothesis Ho Ho
Correct Type I
Ho is true decision error
Type II Correct
Ho is false error decision

A. Type I error – rejecting the null hypothesis, Ho, when in fact it is true. It is twice
as bad as a type II error.

 The chances or likelihood (probability) of committing a type I error is also called

the level of significance denoted by  and is likewise called the size of the critical
region. The larger the , the more likely is that H0 will be rejected falsely. In this
case, the more likely that Type I error will be committed.

B. Type II error – denoted by  , is not rejecting the null hypothesis when in fact it
is false.

 The probability of committing a Type II error, is impossible to compute unless we

have a specific Ha.

The truth or falsity of a statistical hypothesis is never known with certainty

unless we examine the entire population (Lind, 2006)

VI. Level of Significance ()

In normal English, "significant" means important, while in Statistics "significant" means

probably true (not due to chance). A research finding may be true without being important. When
statisticians say a result is "highly significant" they mean it is very probably true. They do not
(necessarily) mean it is highly important.

Significance levels show how likely a result is due to chance. The most common level,
used to mean something is good enough to be believed, is 0.95. This means that the finding has a
95% chance of being true.
VII. The Rejection Region and the Critical Value

Critical Value – the dividing point between the region where the null hypothesis
is rejected and the region where it is accepted.

DECISION – When to reject Ho?

If test statistic computed absolute value > test statistic tabular value, then
reject H0
Tests
of
Significance

A. One-Tailed Test – when Ha states a direction

Examples

The mean income of men is greater than the mean income of women. Ha: m > w

The mean income of men is less than the mean income of women. Ha: m < w

B. Two-Tailed Test – when Ha does not state a direction

Example

The mean income of women is not equal to the mean income of women.
Ha: w  m

VIII. HYPOTHESIS TESTING (Lind, et al., 2006, Mann, 2004, Freund and Simon, 1997)

A. Hypothesis Testing
A procedure based on sample evidence and probability theory to determine whether the
hypothesis is a reasonable statement.

Some examples of hypothesis statements:

a) The typical Filipino family lives in a home more than 15 years.
b) The mean starting salary for graduates with 4-year baccalaureate degrees is P85,000.00 per
annum.
c) Engineers have higher Math I.Q. than Physicists.
 Tests of hypothesis can be carried out on one or two samples. One sample tests are used to
test if the population parameter (m) is different from a specified value. Two sample tests are used
to detect the difference between the parameters of two populations (m1 and m2).

Two sample tests can further be classified as unpaired or paired two sample tests. While in
unpaired two sample tests the sample data are not related, in paired two sample tests the sample
data are paired according to some identifiable characteristic. For example, when testing hypothesis
about the effect of a treatment on weight loss, it is desired to pair the data taken at different points
before and after implementation of the treatment.

Given the same level of significance the two tailed test is more conservative, i.e., it is more
rigorous than the one-tailed test because the rejection point is farther out in the tail. It is more
difficult to reject Ho with a two-tailed test than with a one-tailed test.

B. Five-Step Procedure for Testing a Hypothesis (Lind, et al., 2006)

Step 1. State the null hypothesis (Ho) and the alternative hypothesis (Ha,H1)

Step 2. Select a level of significance (). The value should be small, usually less than 10%. It is
important to consider the consequences of both types of errors.
 Level of Significance – denoted by , is the probability of rejecting the null hypothesis
when it is true.

Step 3. Identify and compute the test statistic. Select the test statistic and determine its value from
the sample data. This value is called the observed value of the test statistic. Remember that a t
statistic is usually appropriate for a small number of samples; for larger number of samples, a z
statistic can work well if data are normally distributed.

Step 4. Formulate the decision rule/critical regions. Compare the observed value of the statistic
to the critical value obtained for the chosen statistic.
 The decision rule states the conditions when Ho is rejected.
Step 5. Take a sample, arrive at decision
 To reject or not to reject the hypothesis
 When the computed value of the test statistic > tabulated value, reject Ho, otherwise
accept
C. 9-Step Procedure for Testing a Hypothesis
(Revised/Detailed Format)

Step 1. Make the Problem Statement

Step 2. State the null hypothesis (Ho) and the Alternative Hypothesis (Ha,H1)

Step 3. Identify the test statistic to be used& select a Level of Significance

Step 4. Compute the Test Statistic (Determine the computed value)

Step 5. Formulate the Decision Rule, Critical Regions and state the Findings

Step 6. Make a Decision

Step 7. Interpret the test results

Step 8. State the conclusion

Step 9. Discuss the implications