UNIT IV. Part A: Sequential Analysis In Neyman ~ Pearson theory of testing hypothesis, the sample size n is regarded as a fixed constant and choice is made between rejection or acceptance of null hypothesis. But in sequential analysis sample size is not fixed in advance. Instead data are evaluated as they are collected, and further sampling is stopped in accordance with a pre-defined stopping rule as soon as significant results are observed. Thus, a conclusion may sometimes be reached at a much earlier stage than would be possible with more classical hypothesis testing or estimation, at consequently lower financial and/or human cost. In testing a hypothesis, the sequential method gives a rule for making one of the following three decisions at each stage of the experiment. i) Accept the hypothesis ii) Reject the hypothesis iii) Continue the experiment by taking an additional observation. Rule: Let $\") be m-dimensional sample space for possible samples(X,,X>.....X,,)- For each integral value of m, 5" R is divided into three mutually exclusive regions Rom+Rim and After the I observation .x, is being taken, the hypothesis Hg is Accepted if x € Ro, Rejected if 4 € Ri, Continue if 44 € Ry Now take I observation x5, the hypothesis Ho is Accepted if (ay,9) € Rop Rejected if (44.23) € Ry Continue if (4.45) € Ry and so on, The process is stopped when and only when either of the hypotheses is rejected or accepted. 1Sequential Probability Ratio Test (SPRT) for Simple vs Simple Hypothesis: Let f(3:0) be the pdf / pm of arandom variable (rv) X . Suppose we wish to test Hy: 0=% vs Hy: 0=6, Suppose f (. For any positive integral value of m , the probability that a sample x),x3,...,%), is obtained is Pan = (4) °F (58 so F (i) ~My Pom = F (138) F (%239) x. F (ni) ~ Ho Since simple null hypothesis is tested against simple alternative hypothesis. Thus, using Likelihood Ratio Test (LRT), we have 0) and f(x:0,) are the distributions of X under Ho and H, respectively. Dy = Pit. Pom Asa basis for deciding between Hy and H, for fixed sample size case Hy is accepted if Ay, yor <%)Solution: We have, oe heey F(x 0)= et a Now £ (x34) Z=K0 °F F350) ule srs-ay?-Gs-a)}] snore +62 -26,x,- x7 #02605 =-sha {48 -2(4-4)} da) Case (i): if @ > >-G >0 Reject Hy «if SZ; 210g 4 a > orSue a? log , (4, +4) or (4-6) = Sxzatme ° ial Accept Hy . if 3Z; slog B a mg? o Sue logB m(4 +6) ia (4%) 2 > Sx, b+me<¥; 8,-4 <0 Reject Hy . if 3z, zlogA ia = Anh > = 2 log A or zlog A+ a yy or ao log A m(A,+4 (4-&) = Sysesme © AAccept Hy . if or > © Continue, if log B< ¥Z; atme< S45, Example 3: Let X ~ B(1,0). Develop SPRT for testing Hy: 0=% vs Hy: 0=0, (0, >%)Solution: We have f (x:0)=6" (1-0) :x=0,1 Now wth nl (F) vole (e Thus, 1-6 i £4] () Sa Ss ig a) 8) noel IB If >A , then 1-6, <1-A, Thus, tog] 1% } 9 1-8, Reject Hy . if DZ; = log A, we have from (1) $ igg| ACI 6 x oh (Hl 6, log A meal A | Sy, 2-84 __ ial A(1-%) A(1-&) = Atcal| “lata Sx, 2 a—me Q a Accept Ho , if YZ; Slog B, we have from (1) St i 40) 2 om oe 8 ota 9A (I- @) Continue, if logB< SZ, bome< Dy 0000, 4 > 4 >15 1(4}>0 % % Reject Ho , if DZ, 2 log A, we have from (1) i2) @) Continue, if log B< 37, btme< Dx, Sys Fyeb+me © a 1Continue, if log B< YZ; At And Lemit Plnzn) = Los (i= PC me ny] N->0 N-300 = I-] =0 Skefore, Adm ©) S Ele mE pace ] =) Abvatam Wald bmma bet 2), Za, --9Z, ave eedrus avd A be He Dumber neecled +9 veack a doc'mon Cee rH also aver). : a Furths, ¢ Sn = 242.4 --+Z, = Zz , tn ECS) = ECZDEQ) , ihos, zp = Log FHI Fle ; Bo) free: ay Nate ’s fev domental Udoutity , NE Rowe eLert smc?) = Differ enficlurg a Us Seles a 7b, we pe ECOn?g moop” naleey e £6, a Smeg] =0 ® Nets that me = ecet4y = feFde ¢ ak Mie= [Rede Me b=0 > mop =feert ‘Seamed wth CancarnerNow, fom @, We Pave E[ Ca ECz) +6] =0 => - ECan EC) + ECG) =0 or ECSn) = ECA) Ez)(Unit (¢) 5 rae @ operating. charochsite (Oe) funckon of PRT Y the trae valas of 6 Uncles tho Yo My. & nether 8 ra by ve bag lntonest to Shady. the natins of He. 06 fond. -—L@). 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