Pepito, Riezel V.

BSA 4A

Introductory of Statistics
(Introduction of Statistics)

Chapter 9: Hypothesis Testing

Hypothesis testing or significance testing is a method for testing a claim or hypothesis about a
parameter in a population, using data measured in a sample. In this method, we test some
hypothesis by determining the likelihood that a sample statistic could have been selected, if the
hypothesis regarding the population parameter were true.
Goal: Test a claim about the population

Five Parts/Steps
Step 1: Hypothesis Statement (roadmap for the test)
Step 2: Test Statistics
Step 3: Rejection Criteria
Step 4: Decision
Step 5: Conclusion
How to find a p-value
A p value is the probability of obtaining a sample outcome, given that the value stated in the null
hypothesis is true. The p value for obtaining a sample outcome is compared to the level of
significance.

When the p value is less than 5% (p < .05), we reject the null hypothesis. We will refer to p < .05
as the criterion for deciding to reject the null hypothesis, although note that when p = .05, the
decision is also to reject the null hypothesis. When the p value is greater than 5% (p > .05), we
retain the null hypothesis. The decision to reject or retain the null hypothesis is called
significance. When the p value is less than .05, we reach significance; the decision is to reject the
null hypothesis. When the p value is greater than .05, we fail to reach significance; the decision
is to retain the null hypothesis.

Hypothesis Tests for One Population Mean when Sigma Is Known

If the population standard deviation (σ) is known, a hypothesis test performed for one population
mean is called one-mean z-test or simply z-test.

A z-test is a hypothesis test for testing a population mean, μ, against a supposed population
mean, μ0. The z-test assumes normally distributed variables or a large sample size; then the
central limit theorem guarantees a normally distributed sampling distribution. In addition, σ, the
standard deviation of the population must be known. In real life applications this assumption is
almost never fulfilled, and thus, the z-test is rarely applied. However, it is the simplest
hypothesis test and thus, a good subject to start with.

To perform the z-test we follow the step wise procedure, as shown in the table below. First, we
showcase the critical value approach, then, in a second step, we repeat the analysis for the p-
value approach.
Hypothesis Tests for One Population Mean when Sigma is Unknown

A hypothesis test for a population mean when the population standard deviation, σ, is unknown
is conducted in the same way as if the population standard deviation is known. The only
difference is that the t-distribution is invoked, instead of the standard normal distribution (z-
distribution).