03/09/2021

Lecture 3
Inference about Population
Variances (cont.)

Inference about population variances

Inference about
population variances

Inference Inference
about σ2 about σ12/ σ22

Outline

• Confidence interval for σ12/ σ22

• F test for σ12/ σ22

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Inference about σ12/σ22

• In this section we discuss how to compare the
variability of two populations.
• In particular, we draw inference about the
ratio of two population variances.

Inference about σ12/σ22

Reasons why we need to

draw inferences about
two population variances:
Variances can be used to
evaluate the consistency of
processes.
By comparing variances, we
can compare the levels of risk
associated with 2 investments.
and other reasons
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Problem context (Q11.19)

The variance in a production process is an important
measure of the quality of the process. A large variance
often signals an opportunity for improvement in the
process by finding ways to reduce the process variance.
Conduct a statistical test to determine whether there
is a significant difference between the variances in the
bag weights for two machines. Use a 0.05 level of
significance. It is known that the two populations are
normally distributed and two samples were selected
using simple random sampling method.

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Problem context (cont.)

What is your conclusion? Which machine, if either,

provides the greater opportunity for quality
improvements?

The technique

• We need to draw inference about σ12/ σ22

• The point estimator of σ12/ σ22 is s12/s22
• The inference about σ12/ σ22 will be based on
the F distribution

The F distribution

• Statisticians have shown that the ratio of two

independent chi-squared variables divided by
their degrees of freedom is F distributed
• If we have independent samples drawn from
two normal populations, then both (n1-
1)s12/σ12 and (n2-1)s22/σ22 are chi-squared
distributed with (n1-1) and (n2-1) degrees of
freedom, respectively

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The F distribution

• If we divide each of the above two chi-squared

variables by their respective degrees of freedom
and take the ratio, we produce:

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The F distribution

• The above ratio can be simplified to:

• This statistic is F distributed with 1

and 1 degrees of freedom

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The F distribution

• Characteristics of the F distribution:

– Range from 0 to ∞
– The shape is determined by 2 numbers of
degrees of freedom: numerator degrees of
freedom ( ) and denominator degrees of
freedom ( )

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F distribution

Let’s explore F distribution via:

http://homepage.divms.uiowa.edu/~mbogn
ar/applets/f.html

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The F Table (Table 4, Appendix B of Textbook)

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Using the F table

F 0.05, 7,5 = 4.88 F 1-α, ν1, ν2 = 1/ Fα, ν2, ν1

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F distribution

• f(F)
F=
α/2
α/2

1- α

0 F1-α/2, ν1, ν2 Fα/2, ν1, ν2 F

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Estimating the ratio of the two

population variances
• From the following probability statement
P(F1-α/2 < F < Fα/2) = 1 – α
We have

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Estimating the ratio of the two population

variances
• The confidence interval for σ2 is

where 1 – α is the confidence level

and 1 – 1, 2 1
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Example

• Q11.19:

Determine the 90% confidence interval estimate of the ratio of

the two population variances. It is known that the 2 populations
of bag weights are normally distributed and the samples were
selected using simple random sampling method.
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Solution
• The problem objective is to construct a 90%
confidence interval for the parameter
• The condition is that the 2 populations of bag
weights are normally distributed and the samples
are independent and were selected using simple
random sampling method.
• Therefore, the interval estimator for is:

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Solution

Sample 1 Sample 2

1 25 2 22

83.21 72.12

278.1295 236.5464

0.049 0.006

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Solution

• From the data we calculate:

0.049
8.17
0.006
• With 1 - α = 0.90, we have α/2 = 0.05
• F0.05, 24,21 = 2.054
• F0.05,21,24 = 2.015

• 3.9776
. !, #,

• $ %&.&', , ( 16.4626
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Solution

• The 90% confidence interval estimate of ratio

of the two population variances is (3.9776,
16.4626)

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Another example
The same capacity of hard drive is manufactured
on two different machines, Machine A and Machine
B. Samples are taken from both machines and
sample mean manufacturing times and sample
variances are recorded as follows:
• Machine A:
• Machine B:
Compute 95% confidence interval for the ratio of 2
variances.

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Testing the ratio of the two population

variances
Null
hypothesis

Alternative
Hypothesis

Test statistic

Decision rule F<F1-α, V1, V2 F< F1-α/2,V1,V2 or F>Fα/2, V1,V2 F>Fα, V1, V2
REJECT Ho if

α = level of significance
The two populations are known to be normally distributed. 25

Rejection region

• f(F) Ha :

Rejection
region

F
0
F1-α

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Rejection region

• f(F)
Ha:
Rejection
Rejection Region
Region
1- α

0 F 1- α/2 F
Fα/2

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Rejection region

f(F) Ha

Rejection
Region

0 F
Fα
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Problem context (Q11.19)

The variance in a production process is an important

measure of the quality of the process. A large variance
often signals an opportunity for improvement in the
process by finding ways to reduce the process variance.
Conduct a statistical test to determine whether there
is a significant difference between the variances in the
bag weights for two machines. Use a 0.05 level of
significance. It is known that the two populations are
normally distributed and two samples were selected
using simple random sampling method.
29

Problem context (cont.)

What is your conclusion? Which machine, if either,

provides the greater opportunity for quality
improvements?

30

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Solution to the problem in the problem

context
• The parameter to be tested is the ratio of the two population
variances.
• The two populations are normally distributed; the samples were
selected using simple random sampling method; the samples
are independent.
• Because we want to determine whether there
is a significant difference between the variances in the bag
weights for two machines, the alternative hypothesis is:
)
Ha: ≠1
)
• The null hypothesis automatically follows as:
)
H0: 1
) 31

Solution to the problem in the problem

context
) )
• Step 1: Ho: 1 Ha: ≠1
) )
/)
• Step 2: Test Statistic F = ~ F24,21
/)

• Step 3: Level of significance α = 0.05.

• Step 4: Decision rule:
Reject Ho if % < 0.4327 or % > %&.& ', (, 2.367
. !, , #
/) .
• Step 5: % 8.17
/) .
• Step 6: Reject Ho.
• There is enough statistical evidence to conclude that the
variances of bag weights of 2 machines are different.
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Solution

• f(F) )
Ha : ≠1
)

Rejection
Region

0
F
0.4327 2.3670
8.17
33

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Assumptions

The assumptions of the F procedures

discussed in this lecture are:
• Independent, simple random samples
• Two populations are normally distributed

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Caution

• The F test and other inference techniques

for variances discussed in this lecture and
the previous lecture are extremely
sensitive to non-normal distributions.
• In practice, don’t do them without expert
advice.

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Conclusion

• Confidence interval for the ratio of two

population variances.
• F test for the ratio of two population
variances.

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Another example

Two college instructors are interested in whether

or not there is any variation in the way they grade
math exams. They each grade the same set of 30
exams. The first instructor’s grades have a
variance of 52.3. The second instructor’s grades
have a variance of 89.9. Test the claim that the
first instructor’s variance is smaller. The level
of significance is 10%.

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