Module 5: Z – Test

Learning outcomes:

At the end of the lesson, students will be able to:

 Test hypothesis about a single mean using large samples from a normal population, and
 Test hypothesis about the Differences between Two means (Large Independent Samples).

5.1 Z-test: Testing hypothesis about a single mean using large samples from a normal Population.

A significance test can be applied to test whether a mean x based on the size n, differs significantly, or otherwise, from a
popular mean, M . The one sample z-test is a statistical test for the mean of a population and can be used when the
following requirements are satisfied:

1. When we want to test significant difference between population mean ( M ) and the sample mean (x ).
2. When sample size is large ( n ≥ 30 ) .
3. When the population ( N ) is normally distributed.
4. When the population variance (o 2) or population standard deviation ( o ) is known. However, if the population
standard deviation is not known, a z-test is still applicable provided that the sample size is sufficiently large (n> 30)
and the distribution of the sample data are normally distributed.
5. When the samples are independent or taken at random.

The formula for the z-test (for a single mean) is:

X−M
Z c=
σ (if σ is known)
√n
X−M
Z c=
sd (if σ is unknown with large samples, n>30 and the distribution of sample data are normally
√n
distributed)

where: Z c =¿ Z-computed value (one sample case)

x = sample mean

M = population mean

σ = population standard deviation

n = sample size

sd = sample standard deviation

σ / √ n or s . d . / √ n = represents standard error of the mean or standard deviation of the mean

Application 1: It is known that the average salary of College Dean is Php 36,000 per month with population standard
deviation of Php 5,200. A random sample of 36 College Deans were interviewed by a researcher and found out that the
average salary per month was Php 40,590. Using 0.01 level of significance, test the hypothesis that the college Deans earn
more than Php 36,000 per month. Assume that the population is normally distributed.

Solution: Following the six (6) steps in hypothesis testing:

Given: M = Php 36,000.00 x = Php 40,590.00 σ = Php 5,200.00 n = 36 a = 0.01

Step 1. State the H o and H a

H o : M = Php 36,000/month (The average monthly salary of College Dean is Php = 36,000)

H a : M > Php 36,000/month (The average monthly salary of College Dean is more than Php = 36,000)

Step 2. The level of significance ( α )=0.01

Step 3. Z-test (one sample case or single mean). This is a one-tailed/sided test, and the rejection region is on the right tail of
the distribution (i.e., H a : M > ¿Php 36,000)

Step 4. Compute the one sample or single mean z-test value using the given formula:

X−M ( X −M ) √ n
Z c= =
ο o
√n
(40,590−36,000) √ 36
Z c=
5,200

(4,590)(6)
Z c=
5,200

27,540
Z c=
5,200

Z c =5.296

Step 5. By referring to Appendix Table 1 of the critical value of Z, the tabular value is the value under the 0.01 level of
significance under a one-tailed test which is +2.33.
Step 6. Decision rule

Since, Z computed 5.296 greater than Ztabular 2.33 at level of significance 0.01, therefore, we would need to reject the null
hypothesis. Thus, we can conclude that the average monthly salary of College Dean is more than Php = 36,000.

Application 2. An Agricultural researcher claims that the average monthly consumption of coffee of a farmer is 29 cups. In a
sample of 40 randomly selected farmers, the mean monthly consumption was 31 cups. The population standard deviation
was 6 cups. At 0.01 level of significance, test the hypothesis that the researchers’ claim is valid. Assume that the population
is normally distributed.

Solution:

Step 1. State the hypotheses

H o : M =29 cups (The mean monthly consumption of coffee of a farmer is 29 cups)

H a : M ≠ 29 cups (The mean monthly consumption of coffee of a farmer is not equal to 29 cups)

Step 2. The level of significance, a = 1%

Step 3. Z-test (one-sample case or single mean)

This is a two-tailed test and the rejection regions are on both tails of the curve

¿ ¿ cups).

Step 4. Compute the Z-test value:

X−M
Z c=
σ
√n
31−29
Z c=
6
√ 40
(31−29) √ 40
Z c=
6

(2) √ 40
Z c=
6

12.64911
Z c=
6

Z c =2.108
Step 5. Critical region or the tabular value

The tabular value is the value under the 0.01 level of significance under a two-tailed test which is ± 2.58.

Step 6. Decision rule.

Accept the null hypothesis ( H o : M =29 cups) at a = 0.01 level, since Z c =2.108<Z tab 0.005=2.58 . Considering that we
accept the null hypothesis, we can conclude that there is enough evidence to support the claim of the researcher that the
mean monthly consumption of coffee of a farmer is 29 cups at a = 1% level.

5.2 Z-test: Testing the Differences between Two means (Large Independent Samples)

In this part, we are going to deal with the procedures for making inferences of hypotheses about two large
populations. When we want to compare two populations, we need to draw at random two samples, one from each normally
distributed population. When comparing the means of two normally distributed populations, we usually consider the
difference between their means, M 1−M 2. The null hypothesis is H 0 : M 1−M 2=0. The inferences that we will make about
M 1−M 2 will be based on the difference between the observed sample means, X 1 −X 2 . This observed difference belongs
to a sampling distribution. This is true, if two independent samples are drawn randomly from large populations with means
M 1 and M 2 and variances σ 1 and σ 1, respectively.

Assumptions:

1. When we want to test significant differences between two means.

2. When the sample size is large (n ≥ 30).
3. When the samples are independent or taken at random.
4. When the populations are normally distributed.
5. When the population standard deviations are known. If the population standard deviations are not given/known,
a z-test two sample case can still be utilized provided that the samples are large (n 1 and n2 are greater than 30).
This can be done by solving the two standard deviations (sd 1 and sd2) of the two sample groups (i.e., n 1 and n2),
using the formula:
 Z c =¿ ¿ ; if population standard deviations are known

( X 1− X 2)−(M 1−M 2)
Z c=

√ s 21 s 22
+
n1 n 2
; if population standard deviations (σ ) are unknown but n>30.

The quantity in the numerator (i.e. M 1-M2) of the above equations stands for the hypothesized value of the difference
between two population means. If this difference is hypothesized to be zero as specified in the null hypothesis of the form:

H 0 : M 1−M 2=0 or

H 0 : M 1=M 2, then

The p-value of getting a difference at least as large as that observed between the sample result ( X 1 −X 2) and the
hypothesized value ( M 1−M 2) is reduced to p-value ( X 1 −X 2) if H 0 is true, then the above equations will be:

( X 1− X 2)−(M 1−M 2)
Z c=

√ σ 21 σ 22
+
n1 n2

( X 1− X 2)−(M 1−M 2)
Z c=

√ s 21 s 22
+
n1 n 2

where:

Z c = Z-computed value for two independent samples: X 1 and X 2 = the mean values of the samples group 1 and
group 2.

2 2
σ 1 and σ 2 = the variances of the population of group 1 and group 2.

2 2
s1 and s2 = the variances of the sample of group 1 and group 2.

N 1∧N 2 = the sample size of the samples of group 1 and group 2.

M 1−M 2 = the expected difference of the population means of population 1 and population 2 (which is expected to
be zero).

X 1 −X 2 = the observed mean difference of the two sample groups.

√
2 2
σ1 σ2
+ = the standard error of the difference.
n1 n2
Application 1: A Farm Manager of an Agricultural Station wants to validate claim that there is no significant difference in the
mean rice yield of irrigated areas in South Cotabato and North Cotabato in Mindanao. He randomly selected a sample of 55
rice farmers in each area. The mean rice yields per hectare and the sample standard deviations are shown below. At 1%
level of significance, determine if there is enough evidence to reject the claim of no difference in the mean rice yield of the
two areas. Assume that the populations are normally distributed.

South Cotabato North Cotabato

X 1 = 94 cav./ha X 2 = 90 cav./ha
sd 1 = 4.2 cav. sd 2 = 3.8 cav.
n1 = 55 n2 = 55
a = 1% level

Solution (following the six steps):

Step 1. H 0 : M 1=M 2 (claim)

(There is no significant difference between the average rice yields of the two locations)

H a : M 1≠ M 2

(There is a significant difference between the mean rice yields of the two locations)

Step 2. The level of significance is a = 1% level.

Step 3. Z-test (two sample case or two means). This is a two-tailed/sided test ( H a : M 1 ≠ M 2)

Step 4. Compute the test value using the formula for an unknown population standard deviation ( σ ) with n > 30:

X 1− X 2−(M 1−M 2 )
Z c=

√
2 2
(sd ¿¿ 1) ( sd ¿¿ 2)
+ ¿¿
n1 n2

( 94−90 )−0
Z c=

√
2 2
(4.2) (3.8)
+
55 55

4
Z c=

√ 17.64 14.44
55
+
55

4
Z c=
√ 0.3207272+0.262545
 4
Z c=
√ 0.58327265
4
Z c=
0.763723

Z c =5.24

Step 5. Critical region or the tabular value

The tabular value is the value under the 0.01 level of significance under a two-tailed test which is ± 2.58.

Step 6. Decision rule and Conclusion.

Since the Z computed =5.24 is greater than Ztab 0.01=± 2.58, we need to reject the null hypothesis ( H 0 : M 1=M 2)
and accept the alternative hypothesis ( H a : M 1 ≠ M 2). Therefore, we can conclude that there is a significant difference
between the average rice yield of the two locations at ∝ = 1% level. There is enough evidence that the claim is not true (that
there is no significant difference in the mean rice yield of irrigated areas in South Cotabato and North Cotabato in
Mindanao). In this case, the mean rice yield in South Cotabato is significantly higher than the mean rice yield in North
Cotabato.

Application 2. An aptitude test in statistics was given to 75 randomly selected male and 60 female High School students in a
certain university. The higher the score, the greater is the aptitude of the examinee for Statistics. The males got an average
aptitude score of 84 with a standard deviation of 8 while the average female student’s score was 78 with a standard
deviation of 9. Is the mean aptitude score for statistics of the male students significantly higher than that of the female
students at a = 0.05 level? (Assume that the population is normal).

Solution:

Step 1. State the Hypotheses

H 0 : M 1=M 2

(There is no significant difference between the mean aptitude scores of male and female High School Students).

H a : M 1> M 2
 (The mean aptitude score for statistics of the male High School students is significantly higher than the mean
aptitude score for statistics of the female High School students).

Step 2. The level of significance is a = 0.05.

Step 3. Z-test (for H a : M 1> M 2), unidirectional test.

Step 4. Compute the test statistic value using the formula for an unknown population standard deviation ( σ ) with n > 30:

X 1− X 2−(M 1−M 2 )
Z c=

√ (sd ¿¿ 1)2 ( sd ¿¿ 2)2

n1
+
n2
¿¿

84−78−0
Z c=

√ (8)2 ( 9)2
+
75 60

6
Z c=

√ 64 81
+
75 60

6
Z c=
√ 0.853333+1.35
6
Z c=
√ 2.2033333
6
Z c=
1.48436

Z c =4.042

Step 5. Critical region or the tabular value

The tabular value is the value under the 0.05 level of significance under a one-tailed test which is +1.645.

Step 6. Decision rule and conclusion.

Since the Z c =4.043 is greater than the Ztab .0.005=1.645 statistically, we have enough evidence to reject the null
hypothesis ( H 0). Therefore, we can say that the mean aptitude score for statistics of the male High School students is
significantly better than the mean aptitude score for statistics of the female High School students at a = 5% level.

ACTIVITY 5: Z - TEST
Direction:
General instruction: In every activity always indicate your name, CN, time and activity no. You can use band paper or
yellow pad paper in answering the activity. Answers can be hand written or computer-encoded. Pass your activity on Use the
the set date and time.

appropriate statistical tool for each questions. Follow the six steps in hypothesis testing.

1. A report in LTO stated that the average age of taxis in the Philippines is 12 years. An operations manager of a large
taxi company selects a sample of 40 taxis and finds the average age of the taxis is 11.2 years. The σ of the
population is 2.3 years. At α =0.05 , can it be concluded that the average age of the taxis in his company is less
than the national average.
2. Average college cost of tuition fee for all private institutions last year was PhP 46,300. A random sample of costs
this year for 45 institutions of higher learning indicated that the sample mean was PhP 47,800 and a sample
standard deviation was PhP 5,600. At the 0.10 level of significance, is there sufficient evidence to conclude that the
cost has increased?
3. A real estate agent compares the selling price of townhouses in two major cities in National Capital Region to see if
there is a difference in price. The results of the study are shown. Is there enough evidence to reject the claim that
the average price of a townhouse in Quezon City is higher than Makati City? Use α =0.05 .

4. The operations manager of sales company wants to see whether there is a significant difference in the ages of male
and female customers. He selects a sample of 35 samples of each group. The ages are shown here. At α =0.05 ,
decide if there is enough evidence to reject the claim of no difference in the ages of the two groups.