S2 Q4 Statistics and Probability FORMS OF ESTABLISHING HYPOTHESES

1. Statement form is the literal or textual method

Lesson 1 of formulating hypotheses.
HYPOTHESIS TESTING 2. Quantitative form is the numerical method of
expressing the mathematical relationship of the
hypotheses using equality and directional
STEP 1-2. HYPOTHESIS inequality such as greater than (>), less than
● Hypothesis is a general statement regarding
certain descriptions or conditions about a subject (<), or not equal (≠).
under consideration.
● It is an assumption, a conjecture or inferential For symbolism purposes, we will make use of the
statements concerning a quantitative following:
characteristic of the population involved.
● It is a statement of claim or assertion about a Population Sample
population parameter or causal relationship
among a group of subjects based on the merits Mean µ (𝑚𝑢) 𝑥̅
of sample information.
Standard
σ 𝑠
HYPOTHESIS TESTING Deviation
● It is a process of finding enough evidence to
conclude whether the rejection or non-rejection
of a belief or hypothesis about a parameter is FORMULATION OF HYPOTHESIS INVOLVING SINGLE SAMPLE
reasonable. An inference based on a single sample is to show
how to make use of the information taken from the
TEN STEPS OF HYPOTHESIS TESTING sample to test whether a population parameter is
equal to, less than or greater than a specified
1) Formulate or establish the null hypothesis value.
(Ho).
2) Formulate or establish the alternative Ho: μ = μ𝑜 μ ≥ μ𝑜 μ ≤ μ𝑜
hypothesis (Ha).
3) Determine the type of test. Ha: μ ≠ μ𝑜 μ < μ𝑜 μ > μ𝑜
4) Determine the level of significance / degrees
of freedom.
5) Determine the appropriate test statistic. EXAMPLE 1
6) Select the appropriate formula. A scientific journal on corn farming published that with the
use of new technology, the average yield of corn per
7) Calculate the test statistic value. hectare is 1500 cavans. A sample of 115 corn producers
8) Determine the tabular or critical value. in Cagayan showed an average yield of 1450 cavans with
9) State the decision. a standard deviation of 105 cavans. Can we assume that
10) Make the statistical conclusion. the yield of corn in Cagayan is significantly different from
the research finding?
TYPES OF HYPOTHESES
The two types are set up in opposition to each #1 Statement form Quantitative form
other; that is, the rejection of one leads to the There is no significant
non-rejection of the other. difference in the
Ho average yield of corn in μ = 1500
1. Null hypothesis Cagayan from the
○ “Ho” can be constructed as the “prevailing research finding.
assumption.”
○ It connotes that there is no significant There is a significant
difference in the quantitative difference in the
characteristic. Ha average yield of corn in μ ≠ 1500
Cagayan from the
research finding.
2. Alternative hypothesis
○ “Ha” poses as the “new assumption.”
○ It gives the idea that there is a significant EXAMPLE 2
difference in the quantitative A survey published in the journal of Marketing
characteristic of the population. Management attempted to determine why customer
service is important to managers in Malaysia. The
researchers surveyed managers of selected hotels in
Kuala Lumpur. One of the reasons proposed was that
customer service is a means of retaining customers. On a
scale of 1-4, with 1 being the lowest and 4 being the
highest, the survey respondents rated this reason more
highly than any of the other reasons with a mean
response of 3.96. Suppose researchers believe that a QUESTION 2
sample of 20 hotel managers would not rate this reason A liquor company claims that the new billboard display
as highly and conduct a hypothesis test to prove their featuring a well-known actress will increase product sales
theory. What can be concluded? in retail stores by an average of 20 1-liter bottles in a
week.
#2 Statement form Quantitative form
#5 Statement form Quantitative form
There is no significant
Ho decrease in the mean μ = 3. 96 There is no significant
response. Ho difference in the product μ1 = 20
sales in retail stores.
There is a significant
Ha decrease in the mean μ < 1500 There is a significant
response. Ha increase in the product μ1 > 20
sales in retail stores.
FORMULATION OF HYPOTHESIS INVOLVING TWO SAMPLES
MORE EXAMPLES
An inference based on two samples is to show
Determine whether or not the pair would be appropriate
whether the differences between information for a hypothesis test. Explain why.
gathered from two samples is significant
enough to test whether their population 1) 𝐻𝑜: µ = 100 𝐻𝑎: µ ≠ 100
parameters are equal, or one is less than or
greater than the other.
2) 𝐻𝑜: µ = 25 𝐻𝑎: µ ≠ 25
Ho: μ1 = μ2 μ1 ≥ μ 2 μ1 ≤ μ 2

Ha: μ1 ≠ μ2 μ1 < μ 2 μ1 > μ 2

3) 𝐻𝑜: µ = 16 𝐻𝑎: µ ≤ 16

EXAMPLE 3
In Noble, Manalo & Uy accounting firm, a sample of 25
clients serviced by Noble are found to have an average of 4) 𝐻𝑜: µ = 0. 42 𝐻𝑎: µ ≠ 0. 40
P1.2 million transactions last year, with a standard
deviation of P150,000. A sample of 30 clients serviced by
Manalo averaged P1.28 million, with a standard deviation 5) 𝐻𝑜: µ ≥ 73 𝐻𝑎: µ < 73
of P210,000. Assuming that the population variances are
the same, test whether the average transactions are
equal for these two populations serviced by the two
account executives. 6) 𝐻𝑜: µ ≤ 1200 𝐻𝑎: µ ≠ 1200

#3 Statement form Quantitative form

The average 7) 𝐻𝑜: µ = 1/3 𝐻𝑎: µ < 0. 33 ...
transactions for the two μ1 = μ2
Ho
account executives are
equal.
8) 𝐻𝑜: µ ≠ 95 𝐻𝑎: µ = 95
The average
transactions for the two μ1 ≠ μ2
Ha
account executives are
9) 𝐻𝑜: µ ≠ 30 𝐻𝑎: µ ≠ 30
equal.

QUESTION 1
A manufacturer of bed mattresses wants to test the SEATWORK 1
performance of one of its foam machines. Machine x is Using the statement and relation form, formulate
designed to produce a mean quantity of 500 grams per the null and alternative hypotheses for each of the
minute. They let the machine operate for 25 minutes and following:
produce 1200 grams of foam.
1. Brown Sugar House restaurant is attempting to
#4 Statement form Quantitative form determine whether their weekday lunch
There is no significant business has changed with their new menu.
Ho difference in the mean μ1 = 500 Previously, the average revenue per weekday
quantity. lunch was Php 107,400. A random sample of
There is a significant
25 weekdays after the menu change resulted in
Ha difference in the mean μ1 ≠ 500 a mean revenue of Php 109,850. Has the
quantity. revenue changed significantly if the sample
standard deviation is Php 12,210?
 Lesson 2
#1 Statement form
The revenue did not
Quantitative form
HYPOTHESIS TESTING PT. 2
Ho
change significantly.
μ1 = 107, 400
TEST STATISTIC, Z-CRITICAL & T-CRITICAL
The revenue changed
Ha
significantly.
μ1 ≠ 107, 400 TEN STEPS OF HYPOTHESIS TESTING

2. One of the leading companies in the Philippines
is concerned that the quality of graduates they
interview for permanent jobs may be
decreasing. Last year, the average grade point
average (GPA) of overall applicants interviewed
was 3.32. This year, the first 145 applicants
interviewed had an average GPA of 3.25. If
these 145 students are considered at random
sample, is the company‘s concern justified?
Assume that the population standard deviation
is 0.19.
3) Determine the type of test.
4) Determine the level of significance/degrees
of freedom
5) Determine the appropriate test statistic.
6) Select the appropriate formula.
7) Calculate the test statistic value.
8) Determine the tabular or critical value.
9) State the decision.
10) Make the statistical conclusion.

#2 Statement form Quantitative form STEP 3. TYPES OF TEST

● Hypothesis testing can be done with either of the
There is no significant two types of test: one-tailed or two-tailed.
Ho difference in the μ1 = 3. 32 ● These types can be referred to as the directional
average GPA. changes or differences, as established by the
There is a significant alternative hypothesis.
Ha increase in the average μ1 > 3. 32 ● It is therefore determined by the following
GPA. conditions:

1. It is one-tailed test, if the established alternative

hypothesis is directional.

For example:
a) Ha: µ > 50 → 𝑜𝑛𝑒 − 𝑡𝑎𝑖𝑙𝑒𝑑 𝑡𝑒𝑠𝑡 (right)
b) Ha: µ < 50 → 𝑜𝑛𝑒 − 𝑡𝑎𝑖𝑙𝑒𝑑 𝑡𝑒𝑠𝑡 (left)

2. It is a two-tailed test, if the established

alternative hypothesis is non-directional.

For example:
Ha: µ ≠ 50 → 𝑡𝑤𝑜 − 𝑡𝑎𝑖𝑙𝑒𝑑 𝑡𝑒𝑠𝑡

STEP 4. LEVEL OF SIGNIFICANCE

The concept of the level of significance is based on
the following:

1. It measures the risks in decision-making using

hypothesis testing methodology.
2. It is the probability of committing the “Type I
error”, which is rejecting the null hypothesis
when it is in fact true.
3. It is denoted by “α” and determines the size of
the rejection region. The rejection region
consists of the values of test statistics that are
unlikely to occur if the null hypothesis were
true.
4. It is directly under the control of the
individual performing the test. Traditionally,
levels from 0.01 to 0.10 are selected that
correspond to precision levels from 99% to
90% respectively.
STEP 5. TEST STATISTICS - The analysis of variance (ANOVA) is a powerful
● It is the basis for deciding whether to reject or procedure for testing the homogeneity of a set
to accept the hypothesis being tested. of means.
● It is based on the estimator of the parameter - It is used to test the equality of two or more
being tested. means and to make inferences about whether
● It corresponds to the specific distributions to be multiple samples come from populations having
used as defined by its basic assumptions. equal means.
For a simple test of hypothesis, we may use the Basic Assumptions for Z-test
z-test or the t-test. Other tests that can be used
1) Random and independent samples.
are the F ratio test and the chi-square test.
2) Normal populations.
Z-test T-test 3) Equal population standard deviations.
- May be used to test - T-test is normally used If these assumptions are not satisfied, an
hypotheses involving if the population alternative test called “Kruskal-Wallis Rank Test”
a single sample standard deviation is may be used.
mean or two not known and has
sample means. to be estimated Finally, since ANOVA only establishes the
- It makes use of the using the sample significant differences among the means of
normal standard deviation. the groups but does not indicate which groups
distributions. - A paired t-test is used differ, the “Tukey-Kramer Multiple Comparison
to compare samples Method” can be used to exactly determine which
resulting from before groups differ.
and after
experimentation. 2
Chi-square test 𝑡 (𝑋 − 𝑡𝑒𝑠𝑡)
Basic Assumptions for Basic Assumptions for
- In instances where we are not sure that the
Z-test T-test characteristics we intend to study are
1) Population 1) Samples are really distributed normally in the
standard deviation (𝜎) randomly selected. population, the chi-square test is used.
is known. The sample - It is based on fewer assumptions about the
standard deviation is a population than parametric tests like the z, t,
good approximation and f-tests.
of population - It may be used to test differences of
standard deviation so proportions with one degree of freedom (2
long as the sample size by 2 table), or to test the normality of the
is large. distribution of data.
2) Sample size is 2) Samples come from a Basic Assumptions for Z-test
large. (𝑛 ≥ 30) normally distributed
1) Samples are randomly selected.
population.
2) Data are classified into categories
3) Population is truly 3) Sample size is small.
or approximately (𝑛 < 30) 3) Nominal Variables – is the lowest level of
normally distributed. data measurement where the numerical result
in measuring variables is used for identification
4) Samples are 4) For inference based
purposes only and it does not signify any
randomly selected. on a single sample, the
quantitative value.
population standard
deviation (𝜎) is
Examples: bank account number, tax
unknown.
identification number, telefax number
5) Sample sizes, 𝑛1 5) For inference based
4) Independent cell entries of frequency 5. For a
and 𝑛2, both are large. on two sample means,
contingency table with 4 cells, expected
the populations have
frequency must not be less than.
equal variances.
5) With larger tables, a few values of less than 5
6) Samples are
are permissible. When this assumption is not
independent
met, the “Yates’ Correction” may be applied, or
samples.
the “Fisher’s Exact Test” may be used.
6) Another option is to do cell collapsing. Cell
F-ratio test
collapsing is combining rows or columns and Production, Craft, Repairing 12.5 1.6
adding their entries, if doing so does not affect Operators, Fabricators, Laborers 14.5 5.5
the hypothesis being tested.
Answer: Chi-square test
DETERMINING THE APPROPRIATE TEST STATISTICS Reasons: Test of independence, frequency data

In determining the appropriate test to be used for a EXAMPLE 5

given data or research problem, the following may
serve as guidelines:
1. Understand the hypothesis being tested.
2. Recall the basic assumptions of the different
test statistics.
3. Analyze the types or forms of the data given.
4. Foresee the needed solution to the problem
presented.
A socio-economic paper claims that generally,
dual-earner couples spent an average of 45 minutes
watching television together, with a standard deviation of
3 minutes. A sample of 18 dual-earner couples shows an
average of 60 minutes. Is there enough evidence to
accept the claim?
Answer: Z-test
Reasons: Test of population mean, population variance
known

EXAMPLE 1 EXAMPLE 6
The quality control department of Kamayan Industries, Local government officials, whether pro or
maker of shampoo, wants to test the performance of one anti-administration, were asked about the government’s
of its filling machines. The machine is expected to policy to issue a preventive suspension order. Is it fair?
discharge an average amount of 10 mg per sachet. The
study calls for a sampling of 100 sachets and aims to Answer: Chi-square Test
detect any departure from the setting. Reasons: Test of homogeneity, frequency data

Answer: Z-test EXAMPLE 7

Reasons: Testing population mean, large sample (n>30)
EXAMPLE 2
A businessman is considering the purchase of a vending
machine. The seller claims that over the past 3 years, the
average daily revenue of Php 925.00. An observation for
28 days reveals a daily revenue of Php 925.00 with a
standard deviation of Php 55.00. What can be
concluded?
A financial manager wants to determine whether there is
a significant difference in the mean investment return for
the three types of investment package: insurance, real
estate, and mining.
Answer: F-test
Reasons: Difference among three means
EXAMPLE 8

Answer: T-test Group A Group B

Reasons: testing population mean, small sample (n<30),
population variance unknown mean 100 105
sample size 20 30
EXAMPLE 3
The flower group of companies has identically sized variance 25 25
motels in Pasay, Pasig, Paranaque, and The flower group
of companies has identically sized motels in Pasay, Answer: Z-test
Pasig, Paranaque, and Pateros. They gathered data Reasons: Sample size of Group B ≥ 30
analyzing the motel occupancies on randomly selected
days in those locations. Is there evidence of difference in
the average guest occupancies for the 4 locations?

Answer: F-test
Reasons: Test of difference among 4 means

EXAMPLE 4
It is often believed that gender and occupation are
related. Is this statement supported by the following
information? Test the hypothesis at 0.05 level of
significance.

Occupation Male Female

Management & Professional 13.5 9.2
Technical, Administrative
11.0 19.1
Support
Service Occupations 5.6 8.0
Farming, Forestry 2.6 0.5
STEP 8. TABULAR (CRITICAL) VALUE HOW TO DETERMINE THE TABULAR VALUE OF t

HOW TO DETERMINE THE TABULAR VALUE OF Z 1. Specify the level of significance.

2. Determine the type of test.

The tabular value of z greatly depends on two
things: the type of test (#) and the level of
significance (∝). Thus, it is represented by "𝑍 ”
For convenience, the critical or tabular values
are found by using the table of critical values
of z.
1. If one-tailed test and Ha: 𝑢1 < 𝑢2 then the
tabular value is negatively signed.
2. If one-tailed test and Ha: 𝑢1 > 𝑢2 then the
tabular value is positively signed.
3. If two-tailed test, 𝑢1 ≠ 𝑢2 then the value is ±
signed.
TABLE OF CRITICAL VALUES (Z-SCORE)
Level of Significance
Test Type
α = 0. 01 α = 0. 025 α = 0. 05
3. Find the degrees of freedom. Degrees of
freedom is a property of the t distribution. It is
∝,#
the number of variables that is allowed to vary
without changing the mean.
For a single sample, degrees of freedom
(𝑑𝑓) = 𝑛 − 1, while for two samples,
degrees of freedom (𝑑𝑓) = 𝑛1 + 𝑛2 − 2
4. Refer to the t distribution table and look for the
value of t with a subscript corresponding to step
1, 2 and 3.
The tabular value is the t value on the distribution
table with a subscript of the level of significance
(∝) and the degrees of freedom (𝑑𝑓), thus it is
represented by "𝑡 ".α,𝑑𝑓
4. If one-tailed test and Ha: 𝑢1 < 𝑢2 then the
tabular value is negatively signed.
α = 0. 10

Left-tailed 5. If one-tailed test and Ha: 𝑢1 > 𝑢2 then the

− 2. 33 − 1. 96 − 1. 645 − 1. 28
test
tabular value is positively signed.
Right-tailed 2. 33 1. 96 1. 645 1. 28
Two-tailed 6. If two-tailed test, 𝑢1 ≠ 𝑢2 get the value of a/2
± 2. 575 ± 2. 33 ± 1. 96 ± 1. 645
test
before looking at the table, and the value is ±
signed.
EXAMPLE 1
Given: ∝ = 0.05 ; two-tailed test. What is the tabular EXAMPLE 1
value of z? Given: Ha: 𝑢1 ≠ 𝑢2 ; α = 0. 010; and 𝑛 = 25. Find the
𝑍= ± 1. 96 tabular value of t.

α 0.010
EXAMPLE 2 2
= 2
= 0. 005
Given: (a) precision level at 90%; (b) one-tailed test. 𝑑𝑓 = 25 − 1 = 24
What is the critical value of z?
𝑡0.005,24 = ± 2. 797
Since, precision level is 90%, then level of significance is
0.10. EXAMPLE 2
The director of the Human Resource Department
Thus, 𝑍1 = + 1. 28 𝑜𝑟 − 1. 28 believes that its rank and file employees have a mean
daily rate of Php 225.00. A sample of 16 employees
showed a mean daily rate of Php 415.00. Is this sufficient
evidence for the director to conclude that the average
daily rate is decreasing ? Test the hypothesis at 0.05
level of significance. Find the tabular value of t.

Since Ha: µ < 225, then α = 0. 05 ; and 𝑛 = 16,

𝑑𝑓 = 16 − 1 = 15

Therefore, 𝑡 = − 1. 753
0.05,15
EXAMPLE 3 Lesson 3

HYPOTHESIS TESTING PT. 3

The average number of applicants for a trainee in a call
center for the past three years has been 44.5. Recent
study from 10 call centers suggests that the
attractiveness of this type of job may be increasing. If the F-CRITICAL, CHI-SQUARE CRITICAL & Z-TEST
hypothesis will be tested using t-test with 97.5%
confidence level, what is the tabular value of t? TEN STEPS OF HYPOTHESIS TESTING
Since Ha: µ < 44. 5, then α = 0. 025 ; and 𝑛 = 10,
𝑑𝑓 = 10 − 1 = 9 6) Select the appropriate formula.
7) Calculate the test statistic value.
Therefore, 𝑡 = ± 2. 262 8) Determine the tabular or critical value.
0.025,9
9) State the decision.
EXAMPLE 4
10) Make the statistical conclusion.
Given: type of test – two tailed, α = 0. 05 ; and
𝑛1 = 12 ; 𝑛2 = 11. Find the tabular value of t.
Financial Leverage (in millions)
α 0.05
= = 0. 025 Garments Computer Autoparts
2 2
𝑑𝑓 = 12 + 11 − 2 = 21 Technology
3.6 3.0 4.9
𝑡0.025,21 = ± 2. 080
5.2 6.0 5.3

EXAMPLE 5 6.8 6.2 5.8

A computer programmer is considering two different
accounting systems. Two groups of accountants have
been randomly selected to rate the extensiveness of the DETERMINING THE TABULAR VALUE OF F
systems. The rating scores are summarized below. Does
it appear that the two programs could be equally
The tabular value or the critical value of F is
extensive? Test the hypothesis at 90% precision level.
determined based on the following terms:

Program A 𝑥𝐴 = 87. 2 𝑠1 = 8. 7 𝑛1 = 16
1. Level of significance;
Program B 𝑥𝐵 = 90. 0 𝑠2 = 9. 1 𝑛2 = 16 2. Degrees of Freedom; and
3. F distribution table
𝑡0.05,30 = ± 1. 697
● The F distribution table is given in the list of
tables (which for convenience is limited to a
level of significance of 0.05).
● Associated with the table of values of F are two
degrees of freedom:
a. one for the MSC or the numerator and
b. one for the MSE or the denominator.
● The tabular or critical value of F is determined by
a pair of degrees of freedom.

1. Find the degrees of freedom for

numerator (𝑑𝑓𝑛) = 𝐽 − 1

2. Find the degrees of freedom for

denominator (𝑑𝑓𝑑) = 𝑁 − 𝐽

3. Refer to the F distribution table that

satisfies the condition in step 1 and 2,
"𝐹α,𝑑𝑓 ,𝑑𝑓 ".
𝑛 𝑑

✓ Analysis of variance tests are always one-tailed

tests.
✓ The table provided is limited to 0.05 level of
significance.
EXAMPLE 1 2
Given: α = 0. 05; and 𝑑𝑓𝑛 = 5; 𝑑𝑓𝑑 = 24. Find the DETERMINING THE TABULAR VALUE OF 𝑋
tabular value of F.
2
The tabular value or the critical value of 𝑋 is
𝐹0.05,5,24 = 2. 62 determined based on the following terms:

EXAMPLE 2
The Noble records’ highest selling musical CD categories 1. Level of significance;
for five days are rap, jazz, and rock. The following sales 2. Degrees of Freedom; and
are in terms of the number of CDs sold. 3. X2 distribution table

RAP JAZZ ROCK 2

● Referring to the 𝑋 distribution table, associated
29 32 25 2
with table of value of 𝑋 are the degrees of
27 33 24 freedom and the level of significance.
30 31 24 ● The tabular value or critical value of the
chi-square test statistic is determined by the
27 34 25 intersection of the column that corresponds to
28 30 26 a specific level of significance and the row that
corresponds to a certain degree of freedom.
Assuming that you are using F test to find if there is a
significant difference among means, determine the
tabular value of F.
1. Establish the level of significance (𝛼)
2. Find the degrees of freedom using the
Since, 𝐽 = 3; and 𝑁 = 15, then, following:
𝑑𝑓 = (𝑟 − 1)(𝑐 − 1)
𝑑𝑓𝑛 = 𝐽 − 1 = 3 − 1 = 2 Where r - no. of rows & c - no. of columns
2
𝑑𝑓𝑑 = 𝑁 − 𝐽 = 15 − 3 = 12 3. The tabular value is the 𝑋 value on the
distribution table with a subscript of the
Therefore, level of significance (𝛼) and the degrees of
𝐹0.05,2,12 = 3. 89 2
freedom "𝑋 "
α,𝑑𝑓
EXAMPLE 3
Four MBA teams played last weekend. The following are Note: Chi-square tests are always one-tailed tests.
the scores of their players. Using the F ratio test,
determine the following: EXAMPLE 1
2
Given: α = 0. 05; and 𝑑𝑓 = 10. Find the tabular 𝑋 .
Team A Team B Team C Team D
5 10 23 35 Based on the level of significance and the degrees of
freedom, referring to the table.
7 12 31 22
2
6 8 21 15 𝑋 0.05,10
= 18. 3070
10 13 30 27
EXAMPLE 2
4 14 25 22 Given the following contingency table:
8 15 22 28
X Y Total
11 14 22
A 20 30 50
17 22
B 30 20 50
5
Total 50 50 100
Since, 4; and 𝑁 = 30, then, 2
Find the tabular value of 𝑋 at 0.010 level of significance.
𝑑𝑓𝑛 = 𝐽 − 1 = 4 − 1 = 3
Since, 𝑟 = 2; 𝑐 = 2, then 𝑑𝑓 = (2 − 1)(2 − 1) = 1; and
𝑑𝑓𝑑 = 𝑁 − 𝐽 = 30 − 4 = 26 α = 0. 010

Therefore,
Therefore, 2
𝐹0.05,3,26 = 2. 98 𝑋 0.010,1
= 6. 6349
EXAMPLE 3
A plant manager wants to know if there is a difference in
STEP 9. DECISION MAKING
the number of machine breakdowns during the plant’s Hypothesis Testing Methodology
shifts. The following sample information is randomly ■ The decision dilemma on whether to accept or
collected on four machines. At 0.025 level of significance, to reject certain hypotheses basically depends
2
find the tabular value of 𝑋 if he tests whether on two values, the tabular value and the
breakdowns are independent of shifts. computed value.
■ As mentioned, the computed value is
Time of Shift M1 M2 M3 M4 determined by calculations using the
appropriate statistical test formula, while the
6AM - 12NN 5 10 9 12
tabular value is taken from the table.
12NN - 6PM 15 14 11 8
6PM - 12PM 10 7 13 10 Critical Value Method in Decision Making
■ The critical value method is one of the methods
Since, 𝑟 = 3; 𝑐 = 4, then 𝑑𝑓 = (3 − 1)(4 − 1) = 6; and
that leads to a decision about rejection or
α = 0. 025 non-rejection of the null hypothesis.
■ The idea is to determine the critical value,
Therefore, which is the tabular value of the test statistic
2 that divides the rejection and the non-rejection
𝑋 = 14. 4494
0.025,6 region of the distribution and serves as the
boundary between them.
■ The critical value method determines the critical
mean value for the computed value of z to be
in the rejection region.

EXAMPLE 1
Given: (a) 𝑧𝑐 = 2. 19 (b) 𝑧𝑡 = ± 1. 65. What is the
decision?

Since 2. 19 > 1. 65, the z value falls on the rejection

region. The decision is to reject the null hypothesis.

EXAMPLE 2
A scientific journal on corn farming published that with the
use of new technology, the average yield of corn per
hectare is 1500 cavans. A sample of 115 corn producers
in Cagayan showed an average yield of 1450 cavans with
a standard deviation of 105 cavans. Can we assume that
the yield of corn in Cagayan is significantly different from
the research finding? Use 0.01 significance level.

Since 𝑧𝑐 = 2. 86 and 𝑧𝑡 = ± 2. 58,

Reject the null hypothesis.
P-Value Method in Decision Making
P-VALUE
● P stands for probability. Hence, p-value
stands for probability value.
● It is referred to as the observed level of
significance.
● It is the smallest value at which the null
hypothesis can be rejected.
● It is the probability of obtaining a test statistic
equal to or greater than the result obtained
from the experiment, provided that the null
hypothesis is true.
● For one-tailed test, it is the area
a) To the left of the negative computed value.
b) To the right of the positive computed value.
● For two-tailed test, since there are two z
scores, it is the sum of the two areas.
Decision Rule (applicable to all test statistic)
■ If P-value is less than or equal to alpha (𝑃 ≤
α), then Ho is rejected.
■ If P-value is greater than alpha (𝑃 > α), then
Ho is not rejected.
EXAMPLE 1
Given: (a) type of test is two tailed test (b) level of
significance (𝛼) is 0.05 (c) P-value is 0.006
What is the decision?
If it is two tailed test, then α = 0. 05.
Since P-value is less than α, (0. 006 < 0. 05), the
decision is to reject the null hypothesis.
EXAMPLE 2
A scientific journal on corn farming published that with the
use of new technology, the average yield of corn per
hectare is 1500 cavans. A sample of 115 corn producers
in Cagayan showed an average yield of 1450 cavans with
a standard deviation of 105 cavans. Can we assume that
the yield of corn in Cagayan is significantly different from
the research finding? Use 0.01 significance level.
Since, 𝑧𝑐 = 2. 86, then the area to its right is 0.0021,
therefore P-value is equal to 0.0021.
Since P-value is less than the level of significance
(0. 0021 < 0. 01), the decision is to reject the null
hypothesis.
SEATWORK 2
1. A study of the dental status of critically ill
children in a Pediatric Intensive Care Unit
examined 16 children with permanent teeth and
found that the mean number of missing or filled
teeth was 1.2 with a standard deviation of 1.9.
Extensive analysis has established that the
mean number of such teeth in the wider
population of children is 1.4. Test at 90%
confidence level whether the mean for critically
ill children differs from this.
Ho: µ = 1. 4
На: µ ≠ 1. 4
Type of test: two-tailed test
Level of Significance / Degrees of freedom:
α = 0. 1; 𝑑𝑓 = 15
Test Statistic: t-test
Critical Value: ± 1. 753
2. A visual research lab has purchased a digital
color blindness test from a company. Before
they can use the test in their research, they
must ensure it is properly calibrated. To do this
they must check that they get the same results
as the company when testing participants with
no color deficiencies. The company states that
participants with healthy color vision will score
15 on the test on average. The research lab
tests 13 participants with healthy color vision.
On average they score 12 with a standard
deviation of 3.6. At 0.05 level of Significance, is
their machine properly calibrated?
Ho: µ = 15
На: µ ≠ 15
Type of test: two-tailed test
Level of Significance / Degrees of freedom:
α = 0. 05; 𝑑𝑓 = 12
Test Statistic: t-test
Critical Value: ± 2. 179
 STEP 10. MAKING THE STATISTICAL CONCLUSION FORMULA FOR COMPUTING THE VALUE OF Z FOR
The prime objective of the hypothesis testing TWO INDEPENDENT SAMPLES
process is to find enough evidence to reach a
decision whether to reject or not to reject the “null (𝑥1−𝑥2)−(µ1−µ2)
hypothesis”. Consequently, the decision leads us 𝑧= 2 2
to form a conclusion. The conclusion is drawn σ1 σ2
with the intention of summarizing the results of 𝑛1
+ 𝑛2
the statistical analysis. Hence, the following may
Where,
be a helpful guideline in drawing conclusions:
µ1 − µ2 = 0 (𝑠𝑖𝑛𝑐𝑒 𝐻𝑜: µ1 = µ2)
1. Read and understand the situation in the given 𝑥1 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐴; 𝑥2 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐵
study. µ1 = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐴;
2. Identify what is being asked to resolve in the
µ2 = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐵;
study.
3. State the conclusion related and in terms or in 2 2
σ1 = 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐴; σ2 = 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐵
the language of the original problem or
𝑛1 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑠𝑖𝑧𝑒 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐴; 𝑛2 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑠𝑖𝑧𝑒 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐵
question.

STEP 6. FORMULAS Note: If variances are not available, the sample

variance is a good approximation if and only if
sample size is large.
FORMULA FOR COMPUTING THE VALUE OF Z FOR A SINGLE MEAN
Where,
EXAMPLE 1
𝑥 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑚𝑒𝑎𝑛 Compute the z value for the data given below.
(𝑥−µ) 𝑛
𝑧= σ
µ = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑎𝑛
σ = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛
𝑛 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑠𝑖𝑧𝑒 𝑥1 = 12 500 𝑥2 = 11 275

𝑛1 = 80 𝑛2 = 80
EXAMPLE 1
Given: 𝑥 = 28. 1; 𝑛 = 49; σ = 8. 46; 𝐻𝑜: µ = 25. σ1 = 120 σ1 = 120
Calculate the computed value (𝑧𝑐).
(𝑥−µ) 𝑛 (28.1−25) 49 (12 500 − 11 275) 1225 1225
𝑧= σ
= 8.46 𝑧= =
2
(120) (120)
2
180 + 180 18.9737
𝑧 = 2. 57 80
+ 80

EXAMPLE 2 𝑧 = 64. 56
A survey published in the journal of Marketing
Management attempted to determine why customer EXAMPLE 2
service is important to managers in Malaysia. The Two samples of cultured prawns are drawn, one from the
researchers surveyed managers of selected hotels in Bicol area and the other from Palawan. The 102 prawns
Kuala Lumpur. One of the reasons proposed was that from Bicol showed a mean weight of 8.3 oz with a
customer service is a means of retaining customers. On a standard deviation of 1.12 oz, while the 87 prawns from
scale of 1-4, with 1 being the lowest and 4 being the Palawan showed a mean weight of 7.6 oz with a standard
highest, the survey respondents rated this reason more deviation of 0.8 oz. Test the hypothesis that there is no
highly than any of the other reasons with a mean significant difference in the mean weights of the cultured
response of 3.96. Suppose researchers believe that a prawns from Bicol and Palawan. Assuming all
sample of 20 hotel managers would not rate this reason assumptions are satisfied, what is the computed value of
as highly and conduct a hypothesis test to prove their z?
theory. Data are gathered from 132 respondents and (8.3 − 7.6) 0.7
showed a mean rating of 3.256 with a standard deviation 𝑧= =
(1.12)
2
(0.8)
2
0.0123 + 0.0074
of 0.574. What is the computed value of z? +
102 87
0.7
(𝑥−µ) 𝑛 (3.256−3.96) 132 =
𝑧= σ
= 0.574
0.14036
𝑧 = 4. 987
𝑧 = − 14. 091
TEN STEPS OF HYPOTHESIS TESTING USING THE Z-TEST
EXAMPLE 1
A manufacturer of Christmas light bulbs claims that
the average life of its product will exceed 40 hours.
A company is willing to buy large quantities of
bulbs if the claim is true. A random sample of 56
light bulbs is tested and is found that the sample
mean is 45 hours. If the population has a standard
deviation of 5 hours, is it likely that bulbs will be
bought? (use a = 10%)
ACTIVITY 1
The manager of a department store claims that the
average cost of a pair of rubber shoes for teens is
Php 4,500.00. A random sample of 50 pairs of
shoes has an average cost of Php 4,200.00 with
an assumed population standard deviation of Php
150.00. At 0.05 level of significance, is there
enough evidence to reject the manager’s claim?

1. 𝐻𝑜: µ = 40
2. 𝐻𝑎: µ > 40
3. One tailed test
4. α = 0. 10
5. Z-test
(𝑥−µ) 𝑛
6. 𝑧= σ
7. 𝑧𝑐 = 7. 48
8. 𝑧𝑡 = + 1. 28
9. Reject null hypothesis.
10. The bulbs will be bought.

EXAMPLE 2
A study was made to determine if there is a
significant difference in the salaries of professors in
the private and state colleges in Cebu. The results,
taken from 80 professors on both groups, are as
follows:

Private State
Mean 12 500 11 275
Std. Dev. 120 120

What can be concluded from this?

1. 𝐻𝑜: 𝑢 = 𝑢
𝑝 𝑠
2. 𝐻𝑎: 𝑢 ≠ 𝑢
𝑝 𝑠
3. Two-tailed test
4. α = 0. 05
5. Z-test
(𝑥1−𝑥2)−(µ1−µ2)
6. 𝑧= 2 2
σ1 σ2
𝑛1
+ 𝑛2

7. 𝑧 = 64. 56
𝑐
8. 𝑧 = ± 1. 96
𝑡
9. Reject null hypothesis.
10. There is a significant difference in the average
salaries between the professors in private and
state colleges.
 Lesson 4 EXAMPLE 1

HYPOTHESIS TESTING PT. 4

Assume that you have a sample size of 25 with a sample
mean of 11.2 and a standard deviation of 0.5. And from
another population an independent sample of the same
T-TEST & F-RATIO TEST size is selected with a sample mean of 11.3 and a
standard deviation of 1.0. What is the computed value of
t?
FORMULA FOR INFERENCE BASED ON A SINGLE SAMPLE
USING T-TEST Since 𝑛1 = 25, 𝑥1 = 11. 2, 𝑠1 = 0. 5;
Where, 𝑛2 = 25, 𝑥2 = 11. 3, 𝑠2 = 1. 0, then,
𝑥 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑚𝑒𝑎𝑛
(𝑥−µ) 𝑛
𝑡= 𝑠
µ = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑎𝑛
[11.2 − 11.3] 25 + 25 − 2
𝑠 = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛
𝑛 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑠𝑖𝑧𝑒
𝑡𝑐 = 2 2 1 1
[(25−1)(0.5) +(25−1)(1.0) ] [ 25 + 25
]
Although the formula is essentially the same as the 𝑡𝑐 = − 0. 0246
z formula, the distribution table values are not.

EXAMPLE 1
TEN STEPS OF HYPOTHESIS TESTING USING THE T-TEST
If in a normal population, a sample of 25 is randomly
selected and revealed that it has a mean of 50 with a EXAMPLE 1
standard deviation of 12. What is the computed value of The National Steel Company is manufacturing
the test statistics? (𝐻𝑜: µ = 60) steel wire with an average strength of 50 kilos. The
laboratory tests a random sample of 18 pieces of
Since 𝑛 = 25, 𝑥 = 50, and 𝑠 = 12 then, wires and finds that the mean strength is 48 kilos,
and the standard deviation is 10 kilos. Are the
(50−60) results in accordance with the hypothesis that the
𝑡𝑐 = 12
* 25
company produces steel wire with an average
𝑡𝑐 = − 4. 17 strength of 50 kilos? (Use 10% level of
significance)
EXAMPLE 2
The average number of applicants for a trainee in a call 1. 𝐻𝑜: µ = 50
center for the past 3 years has been 44.5. Recent study 2. 𝐻𝑎: µ ≠ 50
from 10 call centers showed an average of 46 applicants 3. Two tailed test
with a standard deviation of 1.5. What is the computed
4. α = 0. 05, 𝑑𝑓 = 17
value if the hypothesis will be tested?
5. T-test
Since 𝑛 = 10, 𝑥 = 46, 𝑠 = 1. 5 and 𝐻𝑜: µ = 44. 5, then, (𝑥−µ) 𝑛
6. 𝑡= 𝑠
(46−44.5) 7. 𝑡𝑐 = − 0. 85
𝑡𝑐 = 1.5
* 10
𝑡𝑐 = + 3. 16 8. 𝑡𝑡 = ± 1. 74
9. Do not reject Ho.
10. There is no significant difference in the
FORMULA FOR INFERENCE BASED ON TWO SAMPLES average strength.
(POOLED-VARIANCE T-TEST FOR THE DIFFERENCE IN TWO
MEANS) EXAMPLE 2
Use the following data to test if there is a
[(𝑥1−𝑥2)−(µ1−µ2)] 𝑛1+ 𝑛2−2 significant difference between the population
𝑡= means at 10% level of significance. Assume the X
2 2
[(𝑛1−1) 𝑠1 + (𝑛2−1) 𝑠2 ] [ 𝑛 + 𝑛 ]
1 1 is normally distributed in the population and
1 2 variances are approximately equal.
Where,
µ1 − µ2 = 0 (𝑠𝑖𝑛𝑐𝑒 𝐻𝑜: µ1 = µ2) 𝑥1 = 118 𝑛1 = 10 𝑠1 = 23. 9
𝑥1 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐴; 𝑥2 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐵
𝑥2 = 113 𝑛2 = 10 𝑠2 = 22. 6
µ1 = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐴;
µ2 = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐵;
2 2
𝑠1 = 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐴; 𝑠2 = 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐵 1. 𝐻𝑜: µ1 = µ2
𝑛1 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑠𝑖𝑧𝑒 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐴; 𝑛2 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑠𝑖𝑧𝑒 𝑜𝑓 𝑔𝑟𝑜𝑢𝑝 𝐵 2. 𝐻𝑎: µ1 ≠ µ2
3. Two tailed test
4. α = 0. 05, 𝑑𝑓 = 18 FORMULA TO DETERMINE THE VALUE OF F-RATIO
5. T-test
[(𝑥1−𝑥2)−(µ1−µ2)] 𝑛1+ 𝑛2−2 𝑀𝑆𝐶
6. 𝑡= 𝐹𝐶 = 𝑀𝑆𝐸
2 2 1 1
[(𝑛1−1) 𝑠1 + (𝑛2−1) 𝑠2 ] [ 𝑛 + 𝑛 ]
1 2
Where,
7. 𝑡𝑐 = + 0. 48 𝑆𝑆𝐶 𝑆𝑆𝐸
𝑀𝑆𝐶 = and 𝑀𝑆𝐸 =
8. 𝑡𝑡 = ± 1. 73 𝐽−1 𝑁−𝐽
9. Do not reject Ho.
10. There is no significant difference between the 1. Mean Square Column (MSC) also called the
population mean. Mean Square Between, measures the
amount of variability between the columns or
EXAMPLE 3 the explained variability.
R.M. Thai Restaurant is attempting to determine if
their average daily revenue for the new menu
Sum of Squares Column (SSC)
exceeds the old menu. A 15 randomly selected
yields the sum of squares between treatments.
days for the old menu showed mean revenue of
Php 3,600 with standard deviation of Php 250, 2
while the data for the new menu in 15 days 𝑆𝑆𝐶 = ∑ 𝑛 (𝑥𝑗 − 𝑥𝑔)
revealed a mean revenue of Php 3,750 with a
standard deviation of Php 230. What can be
concluded at 1% level of significance? 2. Mean Square Error (MSE) also called the
Mean Square Within, measures the amount
1. Ho: of variability within the columns or the
2. Ha: unexplained variability.
3. Type of Test:
4. Level of Significance/ Degrees of Freedom: Sum of Squares Error (SSE)
5. Test Statistics: yields the variation within columns.
6. Formula:
7. Computed Value: 2
8. Tabular Value: 𝑆𝑆𝐸 = ∑∑ (𝑥𝑖𝑗 − 𝑥𝑗)
9. Decision:
10. Conclusion:
NOTE: Sum of Squares Total = SSC + SSE
ONE-WAY ANOVA (F-RATIO TEST) EXAMPLE 1
The retailing manager of a large magazine stores
Group Treatment wishes to determine whether magazine location
has any effect on its sales. Four different locations
𝐽1 𝐽2 𝐽3 are considered: front, middle, left wing and right
wing. A random sample of 12 stores is selected
𝑖1 with 3 stores randomly assigned to each location.
1 4 7
𝐽 =3 At the end of the trial period, sales volume (in
𝑖2 𝑁 = 9 thousands of pesos) of the magazine in each store
2 5 8
was as follows:
𝑖3 3 6 9
Front Middle Right Wing Left Wing
𝑥𝐽 𝑥𝐽 𝑥𝐽 17.9 24.1 10.9 38.6
1 2 3

16.8 25.6 11.0 37.0

𝐽 = 𝑡𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑡𝑟𝑒𝑎𝑡𝑚𝑒𝑛𝑡𝑠/𝑔𝑟𝑜𝑢𝑝𝑠 15.6 27.0 9.7 36.0

𝑁 = 𝑡𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑏𝑠𝑒𝑟𝑣𝑎𝑡𝑖𝑜𝑛𝑠
𝑥𝑖𝑗 = 𝑠𝑐𝑜𝑟𝑒 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑡ℎ 𝑟𝑜𝑤 𝑎𝑛𝑑 𝑡ℎ𝑒 𝑗𝑡ℎ 𝑐𝑜𝑙𝑢𝑚𝑛
𝑥𝑗 = 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑡ℎ𝑒 𝑣𝑎𝑙𝑢𝑒𝑠 𝑜𝑓 𝑡ℎ𝑒 𝑗𝑡ℎ 𝑐𝑜𝑙𝑢𝑚𝑛
𝑥𝑔 = 𝑔𝑟𝑎𝑛𝑑 𝑚𝑒𝑎𝑛
1. 𝐻𝑜: 𝑢1 = 𝑢2 = 𝑢3 = 𝑢4 Lesson 5
2. 𝐻𝑎: 𝑢1 ≠ 𝑢2 ≠ 𝑢3 ≠ 𝑢4 HYPOTHESIS TESTING PT. 5
3. one − tailed test CHI SQUARE TEST AND SAMPLING TECHNIQUES
4. α = 0. 05, 𝑑𝑓𝑛 = 3, 𝑑𝑓𝑑 = 8
5. f-ratio test FORMULA FOR INFERENCE BASED ON A SINGLE SAMPLE
6. 𝐹𝐶 =
𝑀𝑆𝐶 USING T-TEST
𝑀𝑆𝐸
7. 282.83 2 Where,
2 (𝑂−𝐸)
8. 4.07 𝑋 =∑ 𝐸
𝑂 = 𝑂𝑏𝑠𝑒𝑟𝑣𝑒𝑑 𝐹𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑖𝑒𝑠
9. Reject the null hypothesis 𝐸 = 𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝐹𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑖𝑒𝑠
10. There is a significant difference among the
mean sales in the different locations. CHARACTERISTICS OF THE CHI-SQUARE TEST
1. The test statistic is used for a nominal variable
SEATWORK 3 or two nominal variables with two or more
Given the three groups of samples A, B, and C categories each.
with the following data: 2. The chi-square test reflects the discrepancies
between the observed and the expected or
Sample A Sample B Sample C theoretical frequencies in the different
categories of nominal variables.
1.0 2.0 3.0
3. The larger the discrepancy, the larger the
1.1 2.1 3.1 resulting chi-square statistic will be.
4. The chi-square can range from zero to
1.1 2.0 3.1
positive infinity.
1.1 2.1 3.0 5. The chi-square statistic requires the expected
frequency of at least five to a cell.
1.0 2.1 3.1 6. The sum of the observed frequencies will
always equal the sum of the expected
Determine if there is a significant difference among frequencies.
the means of the group samples using 0.05 level of
significance. USES OF THE CHI-SQUARE TEST
1) To test goodness of fit;
11. 𝐻𝑜: 𝑢1 = 𝑢2 = 𝑢3
2) To test independence between nominal
12. 𝐻𝑎: 𝑢1 ≠ 𝑢2 ≠ 𝑢3 variables; and
3) To test whether samples are homogenous.
13. one − tailed test
14. α = 0. 05, 𝑑𝑓𝑛 = 1, 𝑑𝑓𝑑 = 12 1) TO TEST GOODNESS OF FIT
15. f-ratio test The chi-square test is a test of agreement
16. 𝐹𝐶 =
𝑀𝑆𝐶 between sample distribution (observed
𝑀𝑆𝐸 frequencies “OF”) and a theoretical or
17. 1666.67 hypothetical distribution (expected frequencies
18. 3.89 “EF”)
19. Reject the null hypothesis
20. There is a significant difference among the EXAMPLE 1
If you tossed a coin 30 times, and it landed on its
means of the group samples.
tail 12 times, do you have a fair coin? Test at 0.05
significance level.

Tail Head Total

OF 12 18 30
EF 15 15 30

1. 𝐻𝑜: 𝑂𝐹 = 𝐸𝐹
2. 𝐻𝑎: 𝑂𝐹 ≠ 𝐸𝐹
3. One tailed test
4. α = 0. 05, 𝑑𝑓 = 1
𝑑𝑓 = (𝑟 − 1)(𝑐 − 1) = (2 − 1)(2 − 1) = 1
𝑟 = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑟𝑜𝑤𝑠; 𝑐 = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑙𝑢𝑚𝑛𝑠
5. Chi-square test Job
Fila Nike
2 (𝑂−𝐸)
2 Description
6. 𝑋 =∑ 𝐸 (75)(45) (80)(45)
Manager 155
= 21. 7 155
= 23. 3
7. 1. 2 (75)(50) (80)(50)
2 2 Supervisor = 24. 2 = 25. 8
(12−15) (18−15) 155 155
= 15
+ 15
= 1. 2 (75)(60) (80)(60)
Clerk = 29. 1 = 30. 9
8. 3. 84 155 155
9. Do not reject Ho.
10. The coin is fair. (40−21.7)
2
(30−24.2)
2
(5−29.1)
2

21.7
+ 24.2
+ 29.1
2) TO TEST INDEPENDENCE (5−23.3)
2
(20−25.8)
2
(55−30.9)
2

The chi-square test is a test to determine whether + 23.3

+ 25.8
+ 30.9
= 71. 255
a relationship exists between variables; that is,
whether the variables are independent of each 8. 5. 99
other.
9. Reject Ho.
EXAMPLE 2
Below is a contingency table that shows the job 10. The job description affects the kind of rubber
description of 155 samples and the kind of rubber shoes bought by the individual.
shoes they bought for personal use. We want to
test whether a job description does not affect the 3) TO TEST HOMOGENEITY
kind of rubber shoes bought by an individual. Use The chi-square test is a test used to determine
0.05 level of significance. whether two samples come from the same
population; that is, determine if the data are
Job Fila Nike Total homogenous.
Description
Managers 40 5 45 EXAMPLE 3
Supervisors 30 20 50 A journal from the Commission on Higher
Clerks 5 55 60
Education wishes to know whether people from
different provinces (populations) in Luzon differ in
TOTAL 75 80 GT= 155 preference regarding three leading Universities in
Metro Manila. Each respondent was asked to
1. Job description does not affect the kind of specify which of the three Universities he or she
rubber shoes bought by the individual. prefers to study. The results are shown on the
table below. Use 0.05 level of significance.
2. Job description affects the kind of rubber
shoes bought by the individual.
Provinces UST LA SALLE ATENEO TOTAL
3. One tailed test
Bulacan 120 30 50 200
4. α = 0. 05, 𝑑𝑓 = 2 Laguna 10 75 15 100
Pampanga 10 30 60 100
𝑑𝑓 = (𝑟 − 1)(𝑐 − 1) = (3 − 1)(2 − 1) = 2
TOTAL 140 135 125 400
5. Chi-square test
1. The 3 provinces are homogenous in their
2 (𝑂−𝐸)
2 preference.
6. 𝑋 =∑ 𝐸
2. The 3 provinces are not homogenous in their
7. 71. 255 preference.
(𝐶𝑜𝑙𝑢𝑚𝑛 𝑡𝑜𝑡𝑎𝑙)(𝑅𝑜𝑤 𝑡𝑜𝑡𝑎𝑙)
𝐸𝐹 = 𝐺𝑟𝑎𝑛𝑑 𝑡𝑜𝑡𝑎𝑙
3. One tailed test

4. α = 0. 05, 𝑑𝑓 = 4
𝑑𝑓 = (𝑟 − 1)(𝑐 − 1) = (3 − 1)(3 − 1) = 4

5. Chi-square test
 2 i. Lottery Method
2 (𝑂−𝐸) - In this method, lots of numbers
6. 𝑋 =∑ 𝐸 representing members of the
population are drawn at random.
7. 180. 5
ii. Using the table of random
(𝐶𝑜𝑙𝑢𝑚𝑛 𝑡𝑜𝑡𝑎𝑙)(𝑅𝑜𝑤 𝑡𝑜𝑡𝑎𝑙) numbers
𝐸𝐹 = 𝐺𝑟𝑎𝑛𝑑 𝑡𝑜𝑡𝑎𝑙 - In this method, numbers
representing members of the
population are selected based on
the table of random numbers.
- A table of random numbers is a
series of numbers randomly
generated either manually or
electronically, and listed in the
order in which the numbers were
generated.

2. Systematic Probability Sampling

2 2 2
(120−70) (10−35) (10−35) ○ It is a probability sampling technique
70
+ 35
+ 35
+ that considers an essential
(30−67.5)
2
(75−33.75)
2
(30−33.75)
2
pre-selection system to complement
67.5
+ 33.75
+ 33.75
+ the random actual selection.
(50−62.5)
2
(15−31.25)
2
(60−31.25)
2 ○ It is an improvement of the random
62.5
+ 31.25
+ 31.25
= 180. 5 process that considers
representativeness of the selection in
8. 9. 49 the sample based on the sampled
population.
9. Reject Ho. ○ There are four types of systematic
probability sampling techniques:
10. The 3 provinces are not homogenous in their
preference. i. The kth system
○ The method involves selecting the
kth element of the population
SAMPLING TECHNIQUES where K = N/n.
■ Are the process of selecting sample ○ The first sample is chosen at
elements. random, and the rest is obtained
■ A sample is drawn from the population since it by selecting every kth item.
is less time-consuming and economical to work
with samples than with the population. ii. Stratified Sampling Technique
○ In this method, the population is
TYPES OF SAMPLING TECHNIQUES divided into strata according to
A. Probability Sampling certain predefined characteristics.
● It is a sampling method where each member ○ Sample units are selected
of the population is given an equal chance proportionate to the
of being included in the sample. homogenous groups of the
● The method requires a complete list of the population.
members of the population.
● There are two types of probability iii. Cluster Sampling Technique
sampling techniques: ○ In this method, the sample units
are selected from an area or
1. Pure Random Probability Sampling cluster where heterogeneity
○ It is a probability sampling technique among elements is already
where each member of the population considered; thus, the samples
has an equal probability or chance of taken are representative of the
being included in the sample set. population.
○ This technique does not consider any
particular order or system, but
randomness in the actual selection of
samples regardless of characteristics.
○ It is best used for small populations.
 iv. Multi-state Sampling Technique QUIZ 3
○ In this method, the selection
process is completed employing A. The table below indicates samples of
three or more stages, where the employees’ reaction to the SMOKE FREE
sample elements are selected by POLICY in Phil. Asian University, where the
narrowing down the larger units non-academic employees indicate all
to the smallest units. non-teaching personnel, and faculty members
indicate all teaching staff. Test the null
B. Non-Probability Sampling hypothesis that the group of employees and
● It is a method where every member of the reaction are independent variables, using 5%
populace is not ensured of an equal level of significance.
chance of being selected.
● It is referred to as “bias or judgement Reactions Faculty Non-Academic Total
sampling technique”.
● It is used commonly and appropriately in In favor 121 118 239
marketing research where a rough Against 114 112 226
approximation at low cost is desired. Total 235 230 465
● There are four types of non-probability
sampling techniques:
1. 𝐻𝑜: The group of employees and reaction are
1. Purposive Sampling independent variables.
○ In this method, the selection of sample 2. 𝐻𝑎: The group of employees and reaction are
elements is based on the criteria listed not independent variables.
according to the purpose or 3. one − tailed test
objective of the study. 4. α = 0. 05, 𝑑𝑓 = 1
○ It is the discretion on the part of the
5. chi − square test
researcher on which member of the
population satisfies the criteria. 2 (𝑂−𝐸)
2
6. 𝑋 =∑ 𝐸
2. Quota Sampling
○ In this method, a certain number of 7. 0.0017
sample elements is pre-determined
8. 3.84
based on the judgment of the
researcher. 9. Do not reject the null hypothesis
10. The group of employees and reaction are
3. Convenience Sampling independent variables.
○ In this method, sample elements are
selected in a process most convenient
to the researcher.
B. A leading chain of fast-food restaurants offers a
4. Snowball Sampling variety of sizes of soft drinks in terms of
○ Done when population size is small, comparative price in the following categories as
the initial sample is asked to identify medium, large and biggie. Prior to meal
another potential sample that meets promotion, the percentage sales in the three
the criteria of the researcher. categories were 25, 35 and 40 respectively.
During the meal promo, a random sample of 80
soft drinks sold was observed. Of these, 15 are
medium, 40 are large and 25 are biggie. Test if
there is a significant difference in the sales
pattern between before and during the promo
at 10% level of significance.

1. 𝐻𝑜: There is no significant difference in the

sales pattern between before and during the
promo.
2. 𝐻𝑎: There is a significant difference in the
sales pattern between before and during the
promo.
3. one − tailed test
4. α = 0. 1, 𝑑𝑓 = 2
5. chi − square test
2
2 (𝑂−𝐸)
6. 𝑋 =∑ 𝐸

7. 3.69
8. 4.61
9. Do not reject the null hypothesis
10. There is no significant difference in the sales
pattern between before and during the promo.

C. The table below indicates samples of

employees’ reaction to the SMOKE FREE
POLICY in Phil. Asian University, where the
non-academic employees indicate all
non-teaching personnel, and faculty members
indicate all teaching staff. Test the null
hypothesis that the group of employees and
reaction are independent variables, using 5%
level of significance.

Women Men Total

Observed
27 23 50
Frequency
Expected
25 25 50
Frequency

𝑋𝑐𝑜𝑚𝑝𝑢𝑡𝑒𝑑 𝑣𝑎𝑙𝑢𝑒 = 0. 32

Use at your own discretion. Thank you Rafael,

Fidel, and Sir Jomar!