PHILIPPINE WOMEN’S UNIVERSITY

TAFT, MANILA

EXPANDED TERTIARY EDUCATION EQUIVALENCY

AND ACCREDITATION PROGRAM (ETEEAP)
SECOND TRIMESTER, SY 2020-2021
BUSINESS STATISTICS – CLUSTER 4
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TOPIC- 6
HYPOTHESIS TESTING

It is important to understand the difference between hypothesis testing and estimation. Both
procedures involve the use of sampling distributions.

Estimation involves using sample evidence to estimate the unknown characteristics of a

population.

Hypothesis testing involves using sample evidence to assess the likelihood that an assumption
about some characteristics of a population s true.

Null Hypothesis is the assumption about the population that us tested using sample evidence. It
states that the difference between sample statistic and the assumed population parameter is due to
chance variation in sampling. The symbol for the null hypothesis is Ho The symbol for the
alternative hypothesis is H1

HYPOTHESIS TESTING PROCEDURES

1. State the null and alternative hypothesis.

2. Assume the null hypothesis is true, and determine the appropriate sampling distribution for
this assumption.

3. Take a random sample from the population under investigation and compute the appropriate
test statistics from the collected data. After the sample have been selected, the appropriate
statistic, a single numerical value, is calculated from the data, This is commonly the sample
mean or sample proportion.

4.Assess the likelihood of selecting the test statistics from the assumed sampling distributions.
QUESTIONS:
1.Why do analysts test the null hypothesis?

2. Whys is it necessary to assume that the null hypothesis is true?

3. State the appropriate null hypothesis and alternative hypothesis to test the following
statements:

a. A supplier of plastic cups has agreed to send manufacturing firm shipments containing no
more 2% defectives.

b. The average time for delivery of Jollibee is 45 minutes.

c. The average age of PWU college student is 21 years old.

d. A random sample of accounts receivable were checked to determine whether the proportion
that were delinquent has changed from 10%.