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Central Limit - Let 𝑋1 , 𝑋2 , … , 𝑋𝑛 be a random sample of size n darwn from a population - Standardized normal distribution will be standard normally distr.: N(0,1)
Theorem distribution with mean 𝜇 and variance 𝜎 2 . Suppose we are interested in 𝑋̅, the Probability of tail - Every normal distribution 𝑁(𝜇, 𝜎 2 ) can be standardized, therefore we only need
sample mean. Then: as n approaches +∞ area one Z-table which shows the probability under the standard normal distribution,
√𝑛(𝑋̅−𝜇) 𝑑 𝑑 𝜎2
→ 𝑁(0,1), or equivalently, 𝑋̅ → 𝑁(𝜇, ) e.g. 𝑁(4,4) → 𝑍 =
𝑋−4
𝜎 𝑛 √4
Implications of ∑
𝜇 ≈ 𝑋̅ = 𝑖=1
𝑛
𝑋
𝜎2 ≈ 𝑠2 =
1
∑𝑛𝑖=1(𝑥𝑖 − 𝑥̅ )2 - Therefore, to find the probability of the Tail area e.g. 𝑃(𝑋 ≤ 𝒂): 𝑃(𝑍 ≤
𝒂−𝜇
)→
𝑛−1
Central Limit 𝑛 𝜎
If n approaches +∞, SE of sample mean will be
𝑠 check the Z table to find value
Theorem √𝑛
Steps of Significance 1. Assumptions
Characteristics of Unbi𝛔 asedness: Efficiency: Consistency:
Test (1)random sample, (2)quantitative variable, (3) pop. Distr. Normal distr.
Good Estimator Expected value: identical Low Variance As sample size n
(one sided t-test) 2. Stating 𝑯𝟎 and 𝑯𝒂
to population parameter increases, estimator will
Two sided test One sided test
approach the parameter
𝐻0 : 𝜇 = 𝜇0 , vs. 𝐻𝑎 : 𝜇 ≠ 𝑦0 𝐻0 : 𝜇 = 𝜇0 , vs. 𝐻𝑎 : 𝜇 < 𝑜𝑟 > 𝑦0
Approximation using - 𝒏 ≤ 𝟑𝟎: t-distribution, df=n-1
3. Calculate test statistic
normal / t- - 𝒏 > 𝟑𝟎: normal distribution (𝑥̿ − 𝜇0 ) 𝑠
distribution - Degrees of freedom (df): number of values in the final calculation of a statistic 𝑡= , 𝑠𝑒 =
𝑠𝑒 √𝑛
that are free to vary, most of the time: 𝑁 − 1 4. Found p-value based on the test statistic
Parameter vs Parameter Statistics Two sided: p-value=2*tail probability; one sided: p-value=tail probability
Statistic Mean 𝜇 𝑥̅ 5. Compare p-value with pre chosen 𝜶 & 6. Make Conclusions
Proportion 𝑝 𝑝̂ If 𝑃 ≤ 𝛼, we reject null hypothesis
Standard Deviation 𝜎 s Comparing Means - Comparison of means between two groups
Correlation 𝜌 r between two groups - In the two independent samples test, steps are the same but there are
Types of Population Distribution: Sample Distribution: Sampling Distribution: differences in steps 1. Assumptions and 3. Test statistic
Distributions Probability distribution of prob. Distr. of sample prob. Distr. of sample 1. Assumptions
population from the population statistics Additional assumption: 𝜎 2 equals each other and population 𝜎12 = 𝜎22 = 𝜎 2
Interval Estimate - Gives a range of plausible values for a population parameter 2. Test statistic
- Common interval estimate: 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ± 𝑚𝑎𝑟𝑔𝑖𝑛 𝑜𝑓 𝑒𝑟𝑟𝑜𝑟, ̅𝑦̅̅1̅−𝑦
̅̅̅1̅ 𝑠2 𝑠2
We use: 𝑡 = 𝑠𝑒
, 𝑠𝑒 = √𝑛1 + 𝑛2 , 𝑑𝑓 = (𝑛1 − 1) + (𝑛2 − 1)
- margin of error: precision of the sample statistic as point estimate for the 1 2