BACHELOR OF EDUCATION (BUSINESS STUDIES)

YEAR II
BUSINESS STATISTICS II
Statistical Test
By the end of this lesson you should be able to

 describe a statistical test

 compute a test statistic

 compute a p-value

 compare the test statistic to a critical value or p-value

 make a decision based on a statistical test

 interpret the results of a hypothesis test

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Introduction
 A statistical test uses data obtained from a sample to make a decision about whether the
null hypothesis should be rejected.
 In this type of a statistical test, the mean is computed for the data obtained from the
sample and is compared with the population mean. The numerical value obtained from a
statistical test is called the test value or test statistic.
 Then a decision is made to reject or not reject the null hypothesis on the basis of the
value obtained from the statistical test.
 If the difference is significant the null hypothesis is rejected. If the difference is not
significant then we fail to reject the null hypothesis.
 Null hypotheses are never accepted but rather we either reject them or fail to reject them.
If we fail to reject the null hypothesis, it does not mean that we have shown that there is
no difference. 3
Type I and Type II Errors in hypothesis testing

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Level of significance

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Hypothesis testing using the traditional method

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Example 1 (Traditional Method)

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Solution

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Solution…cont’d

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Solution…cont’d

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Hypothesis testing using the p-value method

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Hypothesis testing using the p-value method…cont’d

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Example 2 (P-value Method)

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Solution

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Solution…cont’d

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Solution…cont’d

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Activity 1

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Activity 2

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Activity 3

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 Conclusion

In this lesson you covered the following:

 A statistical test

 Hypothesis test using the traditional method

 Hypothesis test using the p-value method

 Interpretation of results of a hypothesis test

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References

• Anderson, D., Sweeney, D. & Williams, T. (2011). Statistics for

Business and Economics. Cengage learning

• Bluman, A. G. (2004). Elementary Statistics, A step by step

Approach, McGraw Hill Publications, New York, Fifth Edition

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