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# COMPLETE

STATISTICS
by
AMIR D. ACZEL
&
JAYAVEL SOUNDERPANDIAN
7th edition.
Prepared by Lloyd Jaisingh, Morehead State
University

Chapter 7

Hypothesis Testing
McGraw-Hill/Irwin

## Copyright 2009 by The McGraw-Hill Companies, Inc. All

7-2

7 Hypothesis Testing

Using Statistics
The Concept of Hypothesis Testing
Computing the p-value
The Hypothesis Test
Pre-Test Decisions

7-3

LEARNING OBJECTIVES

## Explain why hypothesis testing is important

Describe the role of sampling in hypothesis testing
Identify Type I and Type II errors and how they conflict with each other
Interpret the confidence level, the significance level and the power of a test
Compute and interpret p-values
Determine the sample size and significance level for a given hypothesis test
Use templates for p-value computations
Plot power curves and operating characteristic curves using templates

7-4

## 7-1: Using Statistics

A hypothesis is a statement or assertion about the state of nature (about the true
value of an unknown population parameter):

## The accused is innocent

= 100
The accused is guilty
100

A hypothesis is either true or false, and you may fail to reject it or you may
reject it on the basis of information:

Sample data

7-5

Decision-Making

false:

## Guilt is proven beyond a reasonable doubt

The alternative is highly improbable

Correct

## An innocent defendant may be acquitted

A guilty defendant may be convicted

Incorrect

7-6

## Statistical Hypothesis Testing

nullhypothesis,
hypothesis,denoted
denotedby
byHH0,0,isisan
anassertion
oneorormore
morepopulation
population
AAnull
parameters. This
Thisisisthe
theassertion
assertionwe
wehold
holdtotobe
betrue
trueuntil
untilwe
wehave
havesufficient
sufficient
parameters.
statisticalevidence
evidencetotoconclude
concludeotherwise.
otherwise.
statistical
H0: = 100
H
0: = 100

Thealternative
alternativehypothesis,
hypothesis,denoted
denotedby
byHH1,1,isisthe
theassertion
assertionofofall
allsituations
situationsnot
not
The
coveredby
bythe
thenull
nullhypothesis.
hypothesis.
covered
H1: 100
H
1: 100

andHH1are:
are:
HH00and
1
Mutually
Mutuallyexclusive
exclusive

Onlyone
onecan
canbe
betrue.
true.
Only
Exhaustive
Exhaustive

Togetherthey
theycover
coverall
allpossibilities,
possibilities,so
soone
oneor
orthe
theother
othermust
mustbe
be
Together
true.
true.

7-7

## Hypotheses about other parameters such as population proportions and and

population variances are also possible. For example

H0: p 40%
H1: p < 40%
H0:
H1:

7-8

## The Null Hypothesis, H0

Thenull
nullhypothesis:
hypothesis:
The

Oftenrepresents
representsthe
thestatus
statusquo
quosituation
situationor
oran
anexisting
existingbelief.
belief.
Often
Is maintained, or held to be true, until a test leads to its rejection
Is maintained, or held to be true, until a test leads to its rejection
favorof
ofthe
thealternative
alternativehypothesis.
hypothesis.
ininfavor
Isaccepted
acceptedas
astrue
trueor
orrejected
rejectedas
asfalse
falseon
onthe
thebasis
basisof
ofaa
Is
considerationof
ofaatest
teststatistic.
statistic.
statistic
consideration
statistic

## 7-2 The Concepts of Hypothesis

Testing

7-9

teststatistic
statisticisisaasample
samplestatistic
statisticcomputed
computedfrom
fromsample
sampledata.
data. The
Thevalue
valueof
of
AAtest
thetest
teststatistic
statisticisisused
usedinindetermining
determiningwhether
whetherorornot
notwe
wemay
mayreject
rejectthe
thenull
null
the
hypothesis.
hypothesis.
Thedecision
decisionrule
ruleofofaastatistical
statisticalhypothesis
hypothesistest
testisisaarule
rulethat
thatspecifies
specifiesthe
the
The
conditionsunder
underwhich
whichthe
thenull
nullhypothesis
hypothesismay
maybe
berejected.
rejected.
conditions

ConsiderHH00::=
=100
100.. We
Wemay
mayhave
decisionrule
rulethat
thatsays:
says:Reject
Reject
Consider
thesample
samplemean
meanisisless
lessthan
than95
95or
ormore
morethan
than105.
105.
HH00ifif the
Inaacourtroom
courtroomwe
wemay
maysay:
say:The
Theaccused
accusedisisinnocent
innocentuntil
untilproven
proven
In
guiltybeyond
beyondaareasonable
reasonabledoubt.
doubt.
guilty

7-10

Decision Making
There are
are two
two possible
possible states
states of
of nature:
nature:
There
true
HH00isistrue

false
HH00isisfalse

There are
are two
two possible
possible decisions:
decisions:
There
Fail to
to reject
reject H
H00 as
as true
true
Fail

Reject H
H00 as
as false
false
Reject

7-11

Decision Making
decision may
may be
be correct
correct in
in two
two ways:
ways:
Fail to
to reject
reject aa true
true H
H00
Fail

Reject aa false
false H
H00
Reject

decision may
may be
be incorrect
incorrect in
in two
two ways:
ways:
Type II Error:
Error: Reject
Reject aa true
true H
H00
Type

The Probability
Probability of
of aaType
Type II error
error isis denoted
denoted
The

by .
.
by
Type IIII Error:
Error: Fail
Fail to
to reject
reject aa false
false H
H00
Type

The Probability
Probability of
of aaType
Type IIII error
error isis denoted
denoted
The
by .
.
by

7-12

## Errors in Hypothesis Testing

decisionmay
maybe
beincorrect
incorrectin
intwo
twoways:
ways:
TypeIIError:
Error:Reject
Rejectaatrue
trueHH00
Type

TheProbability
ProbabilityofofaaType
TypeI Ierror
errorisisdenoted
denotedby
by.
.
The
calledthe
thelevel
levelofofsignificance
significanceofofthe
thetest
test
isiscalled

TypeIIIIError:
Error:Accept
Acceptaafalse
falseHH00
Type

TheProbability
ProbabilityofofaaType
TypeIIIIerror
errorisisdenoted
denotedby
by..
The
calledthe
thepower
powerofofthe
thetest.
test.
11- -isiscalled

andare
areconditional
conditionalprobabilities:
probabilities:
and

= P(Reject H 0 H 0 is true)
= P(Accept H 0 H 0 is false)

7-13

## Type I and Type II Errors

Acontingency
contingencytable
table illustrates
illustrates the
the possible
possible outcomes
outcomes
A
of aastatistical
statistical hypothesis
hypothesis test.
test.
of

7-14

The p-Value
Thep-value
p-valueisisthe
theprobability
probabilityof
ofobtaining
obtainingaavalue
valueof
ofthe
thetest
teststatistic
statisticas
as
The
extremeas,
as,or
ormore
moreextreme
extremethan,
than,the
theactual
actualvalue
valueobtained,
obtained,when
whenthe
thenull
null
extreme
hypothesisisistrue.
true.
hypothesis
Thep-value
p-valueisisthe
thesmallest
smallestlevel
levelof
ofsignificance,
significance,,
,atatwhich
whichthe
thenull
null
The
hypothesismay
maybe
berejected
rejectedusing
usingthe
theobtained
obtainedvalue
valueof
ofthe
thetest
teststatistic.
statistic.
hypothesis
RULE:When
Whenthe
thep-value
p-valueisisless
lessthan
than, ,reject
rejectHH0. .
RULE:
0

## NOTE: More detailed discussions about the p-value will be

given later in the chapter when examples on hypothesis
tests are presented.

7-15

## The Power of a Test

The power
power of
of aa statistical
statistical hypothesis
hypothesis test
test isis the
the
The
probability of
of rejecting
rejecting the
the null
null hypothesis
hypothesis when
when the
the
probability
null hypothesis
hypothesis isis false.
false.
null
Power== (1
(1 -- )
)
Power

7-16

## The Power Function

Theprobability
probabilityofofaatype
typeIIIIerror,
error,and
andthe
thepower
powerofofaatest,
test,depends
dependson
onthe
theactual
actualvalue
value
The
theunknown
unknownpopulation
populationparameter.
parameter. The
Therelationship
relationshipbetween
betweenthe
thepopulation
populationmean
mean
ofofthe
andthe
thepower
powerofofthe
thetest
testisiscalled
calledthe
thepower
powerfunction.
function.
and
Valueofof
Power
Power==(1
(1--)
)
Value
0.8739
0.8739
0.7405
0.7405
0.5577
0.5577
0.3613
0.3613
0.1963
0.1963
0.0877
0.0877
0.0318
0.0318
0.0092
0.0092
0.0021
0.0021

0.1261
0.1261
0.2695
0.2695
0.4423
0.4423
0.6387
0.6387
0.8037
0.8037
0.9123
0.9123
0.9682
0.9682
0.9908
0.9908
0.9972
0.9972

1.0
0.9

Power

61
61
62
62
63
63
64
64
65
65
66
66
67
67
68
68
69
69

0.8
0.7
0.6
0.5
0.4
0.3

0.2
0.1
0.0
60

61

62

63

64

65

66

67

68

69

70

7-17

## Factors Affecting the Power Function

The power depends on the distance between the value of the parameter under
the null hypothesis and the true value of the parameter in question: the greater
this distance, the greater the power.
The power depends on the population standard deviation: the smaller the
population standard deviation, the greater the power.
The power depends on the sample size used: the larger the sample, the greater
the power.
The power depends on the level of significance of the test: the smaller the level
of significance,, the smaller the power.

7-18

Example
companythat
thatdelivers
deliverspackages
packageswithin
withinaalarge
largemetropolitan
metropolitan
AAcompany
areaclaims
claimsthat
thatitittakes
takesan
anaverage
averageof
of28
28minutes
minutesfor
foraapackage
packageto
to
area
bedelivered
deliveredfrom
fromyour
yourdoor
doorto
tothe
thedestination.
destination. Suppose
Supposethat
thatyou
you
be
wantto
tocarry
carryout
outaahypothesis
hypothesistest
testof
ofthis
thisclaim.
claim.
want
Set the null and alternative hypotheses:
H0: = 28
H1: 28
Collect sample data:
n = 100
x = 31.5
s=5
Construct a 95% confidence interval for
the average delivery times of all packages:

x z

. 025

s
5
315
. 196
.
n
100
315
. .98 30.52, 32.48

## We can be 95% sure that the average time for

all packages is between 30.52 and 32.48
minutes.
Since the asserted value, 28 minutes, is not
in this 95% confidence interval, we may
reasonably reject the null hypothesis.

7-19

## 7-3 Computing the p-Value

Recall:
Thep-value
p-valueisisthe
theprobability
probabilityof
ofobtaining
obtainingaavalue
valueof
ofthe
thetest
teststatistic
statisticas
as
The
extremeas,
as,or
ormore
moreextreme
extremethan,
than,the
theactual
actualvalue
valueobtained,
obtained,when
whenthe
thenull
null
extreme
hypothesisisistrue.
true.
hypothesis
Thep-value
p-valueisisthe
thesmallest
smallestlevel
levelof
ofsignificance,
significance,,
,atatwhich
whichthe
thenull
null
The
hypothesismay
maybe
berejected
rejectedusing
usingthe
theobtained
obtainedvalue
valueof
ofthe
thetest
teststatistic.
statistic.
hypothesis

7-20

Example
Anautomatic
automaticbottling
bottlingmachine
machinefills
fillscola
colainto
intotwo
twoliter
liter(2000
(2000cc)
cc)bottles.
bottles. AAconsumer
wants
An
testthe
thenull
nullhypothesis
hypothesisthat
thatthe
theaverage
averageamount
amountfilled
filledby
bythe
themachine
machineinto
intoaabottle
bottleisisatatleast
least2000
2000
tototest
cc. AArandom
randomsample
sampleofof40
40bottles
bottlescoming
comingout
outofofthe
themachine
machinewas
wasselected
selectedand
andthe
theexact
exactcontent
contentofof
cc.
theselected
selectedbottles
bottlesare
arerecorded.
recorded. The
Thesample
samplemean
meanwas
was1999.6
1999.6cc.
cc. The
Thepopulation
populationstandard
standard
the
deviationisisknown
knownfrom
frompast
pastexperience
experiencetotobe
be1.30
1.30cc.
cc.
deviation
Computethe
thep-value
p-valuefor
forthis
thistest.
test.
Compute

2000
HH0:0:2000
2000
HH1:1:2000
40,0==2000,
2000,x-bar
x-bar==1999.6,
1999.6,
nn==40,
0
1.3
==1.3
Thetest
teststatistic
statisticis:
is:
The

x 0

x0 =1999.6
1999.6--2000
2000
x
z

0
z =
1.3
1.3
40
nn
40
1.95
==1.95
valueP(Z
P(Z--1.95)
1.95)
pp--value
0.5000--0.4744
0.4744
0.5000
0.0256
0.0256

7-21

## Example Using Excel Template

Anautomatic
automaticbottling
bottlingmachine
machinefills
fillscola
colainto
intotwo
twoliter
liter(2000
(2000cc)
cc)bottles.
bottles. AAconsumer
wants
An
testthe
thenull
nullhypothesis
hypothesisthat
thatthe
theaverage
averageamount
amountfilled
filledby
bythe
themachine
machineinto
intoaabottle
bottleisisatatleast
least2000
2000
tototest
cc. AArandom
randomsample
sampleofof40
40bottles
bottlescoming
comingout
outofofthe
themachine
machinewas
wasselected
selectedand
andthe
theexact
exactcontent
contentofof
cc.
theselected
selectedbottles
bottlesare
arerecorded.
recorded. The
Thesample
samplemean
meanwas
was1999.6
1999.6cc.
cc. The
Thepopulation
populationstandard
standard
the
deviationisisknown
knownfrom
frompast
pastexperience
experiencetotobe
be1.30
1.30cc.
cc.
deviation
Computethe
thep-value
p-valuefor
forthis
thistest.
test.
Compute

7-22

P-value

7-23

## 1-Tailed and 2-Tailed Tests

Thetails
tailsof
ofaastatistical
statisticaltest
testare
aredetermined
determinedby
bythe
theneed
needfor
foran
anaction.
action. IfIfaction
action
The
betaken
takenififaaparameter
parameterisisgreater
greaterthan
thansome
somevalue
valuea,a,then
thenthe
thealternative
alternative
isistotobe
hypothesisisisthat
thatthe
theparameter
parameterisisgreater
greaterthan
thana,a,and
andthe
thetest
testisisaaright-tailed
right-tailed
hypothesis
test.
50
test.
HH0:0:50
50
HH1:1:50

actionisistotobe
betaken
takenififaaparameter
parameterisisless
lessthan
thansome
somevalue
valuea,a,then
thenthe
the
IfIfaction
alternativehypothesis
hypothesisisisthat
thatthe
theparameter
parameterisisless
lessthan
thana,a,and
andthe
thetest
testisisaa
alternative
left-tailedtest.
test.
50
left-tailed
HH0:0:50
50
HH1:1:50

actionisistotobe
betaken
takenififaaparameter
parameterisiseither
eithergreater
greaterthan
thanor
orless
lessthan
thansome
some
IfIfaction
valuea,a,then
thenthe
thealternative
alternativehypothesis
hypothesisisisthat
thatthe
theparameter
parameterisisnot
notequal
equaltotoa,a,
value
andthe
thetest
testisisaatwo-tailed
two-tailedtest.
test. HH:0:50
50
and
0
50
HH1:1:50

7-24

## Computing (for a left-tailed test)

Considerthe
thefollowing
followingnull
nulland
andalternative
alternativehypotheses:
hypotheses:
Consider
1000
HH0:0:1000
1000
HH1:1:1000

Let==5,5,==5%,
5%,and
andnn==100.
100. We
Wewish
wishtotocompute
computewhen
when==1==998.
998.
Let
1
Referto
tonext
nextslide
slide
Refer
Thefigure
figureshows
showsthe
thedistribution
distributionof
ofx-bar
x-barwhen
when==0==1000,
1000,and
andwhen
when
The
0
998.
==11==998.
Notethat
thatHH0will
willbe
berejected
rejectedwhen
whenx-bar
x-barisisless
lessthan
thanthe
thecritical
criticalvalue
valuegiven
given
Note
0
by(x-bar)
(x-bar)crit==0-z-z/n
/n==1000
10001.6455/
1.6455/100
100==999.18.
999.18.
by
crit
0

Conversely,HH0will
willnot
notbe
berejected
rejectedwhenever
wheneverx-bar
x-barisisgreater
greaterthan
than(x-bar)
(x-bar) crit. .
Conversely,
0
crit

7-25

Computing (continued)

7-26

Computing (continued)

When==1==998,
998,will
willbe
bethe
theprobability
probabilityof
ofnot
notrejecting
rejectingHH0which
which
When
1
0
impliesthat
thatP{(x-bar
P{(x-bar>>(x-bar)
(x-bar)crit}.}.
implies
crit
When==,1,x-bar
x-barwill
willfollow
followaanormal
normaldistribution
distributionwith
withmean
mean1and
and
When
1
1
standarddeviation
deviation==/n.
/n. Thus,
Thus,
standard

X crit 1
P Z
P( Z 1.18 / 0.5) P( Z 2.360)
/ n

0.0091
Thepower
powerof
ofthe
thetest
test==110.0091
0.0091==0.9909.
0.9909.
The

7-27

7-28

## 7-4 The Hypothesis Test

Wewill
willsee
seethe
thethree
threedifferent
differenttypes
typesof
ofhypothesis
hypothesistests,
tests,namely
namely
We
Tests
Testsof
ofhypotheses
populationmeans.
means.

Tests
Testsof
ofhypotheses
populationproportions.
proportions.

Tests
Testsof
ofhypotheses
populationvariances.
variances.

7-29

## Testing Population Means

Casesin
inwhich
whichthe
thetest
teststatistic
statisticisisZZ
Cases
isisknown
knownand
andthe
thepopulation
populationisisnormal.
normal.

isisknown
knownand
andthe
thesample
samplesize
sizeisisatatleast
least30.
30. (The
(Thepopulation
population

neednot
notbe
benormal)
normal)
need

The formula
formula for
forcalculatin
calculatingg ZZ isis::
The
x
x
zz

n
n

7-30

## Testing Population Means

Casesin
inwhich
whichthe
thetest
teststatistic
statisticisistt
Cases
isisunknown
unknownbut
butthe
thesample
samplestandard
standarddeviation
deviationisisknown
knownand
and

thepopulation
populationisisnormal.
normal.
the

The formula
formula for
forcalculatin
calculatinggttisis::
The
x
x
tt s
s
n
n

7-31

Rejection Region

## The rejection region of a statistical hypothesis test is the range of

numbers that will lead us to reject the null hypothesis in case the
test statistic falls within this range. The rejection region, also
called the critical region, is defined by the critical points. The
rejection region is defined so that, before the sampling takes
place, our test statistic will have a probability of falling within
the rejection region if the null hypothesis is true.

7-32

Nonrejection Region

## The nonrejection region is the range of values (also determined by the

critical points) that will lead us not to reject the null hypothesis if the
test statistic should fall within this region. The nonrejection region is
designed so that, before the sampling takes place, our test statistic will
have a probability 1- of falling within the nonrejection region if the
null hypothesis is true

## In a two-tailed test, the rejection region consists of the values in both

tails of the sampling distribution.

7-33

## Picturing Hypothesis Testing

Population
mean under H0

= 28

95% confidence
interval around
observed sample mean

30.52

x = 31.5

32.48

It seems reasonable to reject the null hypothesis, H 0: = 28, since the hypothesized
value lies outside the 95% confidence interval. If we are 95% sure that the
population mean is between 30.52 and 32.58 minutes, it is very unlikely that the
population mean will actually be 28 minutes.
Note that the population mean may be 28 (the null hypothesis might be true), but
then the observed sample mean, 31.5, would be a very unlikely occurrence. There
is still the small chance (= 0.05) that we might reject the true null hypothesis.
represents the level of significance of the test.

7-34

Nonrejection Region
If the observed sample mean falls within the nonrejection region, then you fail
to reject the null hypothesis as true. Construct a 95% nonrejection region
around the hypothesized population mean, and compare it with the 95%
confidence interval around the observed sample mean:
0 z.025

s
5
28 1.96
n
100
28.98 27,02 ,28.98

## 95% nonrejection region

around the
population Mean

27.02

0=28

28.98

95% Confidence
Interval
around the
Sample Mean

30.52

x z .025

s
5
315
. 1.96
n
100
315
. .98 30.52 ,32.48

32.48

The nonrejection region and the confidence interval are the same width, but
centered on different points. In this instance, the nonrejection region does not
include the observed sample mean, and the confidence interval does not include
the hypothesized population mean.

7-35

## Picturing the Nonrejection and

Rejection Regions
If the null hypothesis were
true, then the sampling
distribution of the mean
would look something
like this:

0.8
0.7

.95

0.6
0.5
0.4
0.3
0.2

.025

.025

0.1

## We will find 95% of the

sampling distribution between
the critical points 27.02 and 28.98,
and 2.5% below 27.02 and 2.5% above 28.98 (a two-tailed test).
The 95% interval around the hypothesized mean defines the
nonrejection region, with the remaining 5% in two rejection
regions.
0.0

27.02

0=28

28.98

7-36

## The Decision Rule

The Hypothesized Sampling Distribution of the Mean
0.8
0.7

.95

0.6
0.5
0.4
0.3
0.2

.025

.025

0.1
0.0
27.02

0=28

28.98
x

Lower Rejection
Region

Nonrejection
Region

Upper Rejection
Region

## Construct a (1-) nonrejection region around the hypothesized population

mean.

Do not reject H0 if the sample mean falls within the nonrejection region (between the
critical points).
Reject H0 if the sample mean falls outside the nonrejection region.

7-37

Example 7-5
An automatic bottling machine fills cola into two liter (2000 cc) bottles. A consumer advocate wants to test the
null hypothesis that the average amount filled by the machine into a bottle is at least 2000 cc. A random sample of
40 bottles coming out of the machine was selected and the exact content of the selected bottles are recorded. The
sample mean was 1999.6 cc. The population standard deviation is known from past experience to be 1.30 cc.
Test the null hypothesis at the 5% significance level.

2000
HH0:0:2000
2000
HH1:1:2000
40
nn==40
For==0.05,
0.05,the
thecritical
criticalvalue
value
For
ofzzisis-1.645
-1.645
of
Thetest
teststatistic
statisticis:
is: z
The

x 0

40
nn==40
1999.6
xx==1999.6
1.3
==1.3

1999.6--2000
2000
xx 0 1999.6
0
z

=
z
=
1.3

nn

1.3
40
40

Donot
notreject
rejectHH0if:
if:[z[z-1.645]
-1.645]
Do
0
RejectHH0if:
if:zz]
]
Reject
0

1.95
Reject
RejectHH
==1.95
00

7-38

## Example 7-5: p-value approach

An automatic bottling machine fills cola into two liter (2000 cc) bottles. A consumer advocate wants to test the
null hypothesis that the average amount filled by the machine into a bottle is at least 2000 cc. A random sample of
40 bottles coming out of the machine was selected and the exact content of the selected bottles are recorded. The
sample mean was 1999.6 cc. The population standard deviation is known from past experience to be 1.30 cc.
Test the null hypothesis at the 5% significance level.

2000
HH0:0:2000
2000
HH1:1:2000
40
nn==40
For==0.05,
0.05,the
thecritical
criticalvalue
value
For
ofzzisis-1.645
-1.645
of
Thetest
teststatistic
statisticis:
is:
The

x 0

Donot
notreject
rejectHH0if:
if:[p-value
[p-value]
]
Do
0
RejectHH0if:
if:p-value
p-value]
]
Reject
0

1999.6--2000
2000
xx 0 1999.6
0
z

=
z
=
1.3

nn

1.3
40
40

1.95
==1.95
valueP(Z
P(Z- -1.95)
1.95)
pp- -value
0.5000- -0.4744
0.4744
0.5000
0.0256
Reject
RejectHH since
since0.0256
0.02560.05
0.05
0.0256
0
0

7-39

n = 40

## Observe that the decision about

the null hypothesis changed when the
sample size changed from 40 to 20.

n = 20

7-40

P-value

7-41

P-value

Sample Data
Results when
is known

Results when
is unknown

## Observe that the decision about

the null hypothesis changed
when the population standard
deviation is known or unknown.

7-42

Data and = 1.8
P-value

7-43

## Example 7-6: Using Minitab with Sample

Data with unknown
P-value

7-44

7-45

## Testing Population Proportions

Casesin
inwhich
whichthe
thebinomial
binomialdistribution
distributioncan
canbe
beused
used
Cases
Thebinomial
binomialdistribution
distributioncan
canbe
beused
usedwhenever
wheneverwe
weare
areable
ableto
to
The
calculatethe
thenecessary
necessarybinomial
binomialprobabilities.
probabilities. This
Thismeans
meansthat
that
calculate
forcalculations
calculationsusing
usingtables,
tables,the
thesample
samplesize
sizennand
andthe
thepopulation
population
for
proportionppshould
shouldhave
havebeen
beentabulated.
tabulated.
proportion
Note:For
Forcalculations
calculationsusing
templates,sample
sample
Note:
sizesup
upto
to500
500are
arefeasible.
feasible.
sizes

7-46

## Testing Population Proportions

Casesin
inwhich
whichthe
thenormal
normalapproximation
approximationisisto
tobe
beused
used
Cases
thesample
samplesize
sizennisistoo
toolarge
large(n
(n>>500)
500)to
tocalculate
calculatebinomial
binomial
IfIfthe
probabilities,then
thenthe
thenormal
normalapproximation
approximationcan
canbe
beused,
used,and
andthe
the
probabilities,
populationproportion
proportionppshould
shouldhave
havebeen
beentabulated.
tabulated.
population

7-47

## Example 7-7: p-value approach

coinisistototested
testedfor
forfairness.
fairness. ItItisistossed
tossed25
25times
timesand
andonly
are
AAcoin
observed.Test
Testififthe
thecoin
coinisisfair
fairatatan
anof
of5%
5%(significance
(significancelevel).
level).
observed.
Letppdenote
denotethe
theprobability
probabilityof
Let
0.5
HH0:0:pp0.5
p
HH1:1:p
Becausethis
thisisisaa2-tailed
2-tailedtest,
test,the
thep-value
p-value==2*P(X
2*P(X

Because
Fromthe
thebinomial
binomialtables,
tables,with
withnn==25,
25,pp==0.5,
0.5,this
thisvalue
value
From
2*0.054==0.108.
0.108.
2*0.054
Since0.108
0.108>>==0.05,
0.05,then
then
Since
donot
notreject
rejectHH0
do
0

## Example 7-7: Using the Template with

the Binomial Distribution

7-48

## Example 7-7: Using MINITAB without

Normal Approximation

7-49

Approximation

## NOTE: The p-value given by Minitab is different

from the previous slide because we used the
normal approximation.

7-50

7-51

## Testing Population Variances

Fortesting
testinghypotheses
populationvariances,
variances,the
thetest
test
For
statistic(chi-square)
(chi-square)is:
is:
statistic
n 1 s

2
0

where isisthe
theclaimed
claimedvalue
valueof
ofthe
thepopulation
populationvariance
variancein
inthe
the
where
nullhypothesis.
hypothesis. The
Thedegrees
degreesof
offreedom
freedomfor
forthis
thischi-square
chi-square
null
randomvariable
variableisis(n
(n1).
1).
random
2

Note:Since
Sincethe
thechi-square
chi-squaretable
tableonly
onlyprovides
providesthe
thecritical
criticalvalues,
values,itit
Note:
cannotbe
beused
usedto
tocalculate
calculateexact
exactp-values.
p-values. As
Asin
inthe
thecase
caseof
ofthe
thet-tables,
t-tables,
cannot
onlyaarange
rangeof
ofpossible
possiblevalues
valuescan
canbe
beinferred.
inferred.
only

7-52

Example 7-8
manufacturerofofgolf
golfballs
ballsclaims
claimsthat
thatthey
theycontrol
controlthe
theweights
weightsof
ofthe
thegolf
golfballs
balls
AAmanufacturer
accuratelyso
sothat
thatthe
thevariance
varianceofofthe
theweights
weightsisisnot
notmore
morethan
than11mg
mg2.2. AArandom
randomsample
sample
accurately
31golf
golfballs
ballsyields
yieldsaasample
samplevariance
varianceof
of1.62
1.62mg
mg2.2. IsIsthat
thatsufficient
sufficientevidence
evidencetoto
ofof31
rejectthe
theclaim
claimatatan
anofof5%?
5%?
reject

Let22denote
denotethe
thepopulation
populationvariance.
variance. Then
Then
Let
2
1
HH0:0:2 1
2

HH1:1:2
Inthe
thetemplate
template(see
(seenext
nextslide),
slide),enter
enter31
31for
forthe
thesample
samplesize
size
In
and1.62
1.62for
forthe
thesample
samplevariance.
variance.Enter
Enterthe
thehypothesized
hypothesizedvalue
value
and
of11inincell
cellD11.
D11. The
Thep-value
p-valueof
of0.0173
0.0173appears
appearsinincell
cellE13.
E13. Since
Since
of
thisvalue
valueisisless
lessthan
thanthe
theof
of5%,
5%,we
wereject
rejectthe
thenull
nullhypothesis.
hypothesis.
this

7-53

7-54

## Example 7-8 Using Minitab

P- value

7-55

Aspart
partofofaasurvey
surveytotodetermine
determinethe
theextent
extentofofrequired
requiredin-cabin
in-cabinstorage
storagecapacity,
capacity,aa
As
researcherneeds
needstototest
testthe
thenull
nullhypothesis
hypothesisthat
thatthe
theaverage
averageweight
weightofofcarry-on
carry-onbaggage
baggage
researcher
perperson
personisis==12
12pounds,
pounds,versus
versusthe
thealternative
alternativehypothesis
hypothesisthat
thatthe
theaverage
averageweight
weight
per

not12
12pounds.
pounds. The
Theanalyst
analystwants
wantstototest
testthe
thenull
nullhypothesis
hypothesisatat=
=0.05.
0.05.
isisnot

=12
12
HH0:0:=
12
HH1:1:12

0.8
0.7

.95

0.6

For==0.05,
0.05,critical
criticalvalues
valuesof
ofzzare
are1.96
1.96
For
x 0
z

Thetest
teststatistic
statisticis:
is:
s
The
n
Donot
notreject
rejectHH0if:
if:[-1.96
[-1.96z
z1.96]
1.96]
Do
0
RejectHH0if:
if:[z[z<-1.96]
<-1.96]or
or zz1.96]
1.96]
Reject
0

0.5
0.4
0.3
0.2

.025

.025

0.1
0.0
-1.96

Lower Rejection
Region

1.96

Nonrejection
Region

Upper Rejection
Region

7-56

144
nn == 144
14.6
xx == 14.6
7.8
ss == 7.8
x 0 14.6-12
14.6-12
x
0
zz s == 7.8
s
7.8
144
nn
144
2.6
2.6
=
= 0.6544
0.65

## The Standard Normal Distribution

0.8
0.7

.95

0.6
0.5
0.4
0.3
0.2

.025

.025

0.1
0.0
-1.96

1.96

Lower Rejection
Region

Nonrejection
Region

Upper Rejection
Region

Sincethe
thetest
teststatistic
statisticfalls
fallsininthe
theupper
upperrejection
rejectionregion,
region,HH 0isisrejected,
rejected,and
andwe
wemay
may
Since
0
concludethat
thatthe
theaverage
averageamount
amountof
ofcarry-on
carry-onbaggage
baggageisismore
morethan
than12
12pounds.
pounds.
conclude

7-57

Aninsurance
insurancecompany
companybelieves
believesthat,
that,over
overthe
thelast
lastfew
fewyears,
years,the
theaverage
averageliability
liability
An
insuranceper
perboard
boardseat
seatinincompanies
companiesdefined
definedas
assmall
smallcompanies
companieshas
hasbeen
been\$2000.
\$2000.
insurance
Using==0.01,
0.01,test
testthis
thishypothesis
hypothesisusing
usingGrowth
GrowthResources,
Resources,Inc.
Inc.survey
surveydata.
data.
Using
100
nn == 100
2700
xx == 2700
947
s s == 947

=2000
2000
HH0:0:=
2000
HH:1:2000
1

For==0.01,
0.01,critical
criticalvalues
valuesof
ofzzare
are2.576
2.576
For
Thetest
teststatistic
statisticis:
is:
The

x 0
z
s
n

Donot
notreject
rejectHH0if:
if:[-2.576
[-2.576z
z 2.576]
2.576]
Do
0
RejectHH0if:
if:[z[z<-2.576]
<-2.576]or
or zz2.576]
2.576]
Reject
0

z z

xx00
ss
nn

==

700
700

2700- -2000
2000
2700
=
=
947
947
100
100

.39
Reject
RejectHH
77.39
94.7
00
94.7

7-58

## Additional Examples (b) : Continued

The Standard Normal Distribution
0.8
0.7

.99

0.6
0.5
0.4
0.3
0.2

.005

.005

0.1
0.0
-2.576

2.576

Lower Rejection
Region

Nonrejection
Region

Upper Rejection
Region

Sincethe
thetest
teststatistic
statisticfalls
fallsin
in
Since
theupper
upperrejection
rejectionregion,
region,HH00
the
rejected,and
andwe
wemay
may
isisrejected,
concludethat
thatthe
theaverage
average
conclude
insuranceliability
liabilityper
perboard
board
insurance
seatin
insmall
smallcompanies
companiesisis
seat
morethan
than\$2000.
\$2000.
more

7-59

Theaverage
averagetime
timeitittakes
takesaacomputer
computertotoperform
performaacertain
believedtotobe
be3.24
3.24
The
seconds. ItItwas
wasdecided
decidedtototest
testthe
thestatistical
statisticalhypothesis
hypothesisthat
thatthe
theaverage
averageperformance
performance
seconds.
timeofofthe
usingthe
thenew
newalgorithm
algorithmisisthe
thesame,
same,against
againstthe
thealternative
alternativethat
thatthe
the
time
averageperformance
performancetime
timeisisno
nolonger
longerthe
thesame,
same,atatthe
the0.05
0.05level
levelofofsignificance.
significance.
average

=3.24
3.24
HH0:0:=
3.24
HH1:1:3.24
For==0.05,
0.05,critical
criticalvalues
valuesof
ofzzare
are1.96
1.96
For
Thetest
teststatistic
statisticis:
is:
The

x 0
s
n

Donot
notreject
rejectHH0if:
if:[-1.96
[-1.96z
z1.96]
1.96]
Do
0
RejectHH0if:
if:[z[z<<-1.96]
-1.96]or
or zz1.96]
1.96]
Reject
0

200
nn == 200
3.48
xx == 3.48
2.8
s s == 2.8
z z

xx00
ss
nn

==

3.48--3.24
3.24
3.48
==
2.8
2.8
200
200

0.24
0.24
.21
Do
Donot
notreject
rejectHH
11.21
0.20
00
0.20

7-60

## Additional Examples (c) : Continued

The Standard Normal Distribution
0.8
0.7

.95

0.6
0.5
0.4
0.3
0.2

.025

.025

0.1
0.0
-1.96

1.96

Lower Rejection
Region

Nonrejection
Region

Upper Rejection
Region

Sincethe
thetest
teststatistic
statisticfalls
fallsin
in
Since
thenonrejection
nonrejectionregion,
region,HH00isis
the
notrejected,
rejected,and
andwe
wemay
may
not
concludethat
thatthe
theaverage
average
conclude
performancetime
timehas
hasnot
not
performance
changedfrom
from3.24
3.24seconds.
seconds.
changed

7-61

Accordingtotothe
theJapanese
JapaneseNational
NationalLand
LandAgency,
Agency,average
averageland
landprices
pricesinincentral
centralTokyo
Tokyo
According
soared49%
49%ininthe
thefirst
firstsix
sixmonths
monthsofof1995.
1995. An
Aninternational
internationalreal
realestate
estateinvestment
investment
soared
companywants
wantstototest
testthis
thisclaim
claimagainst
againstthe
thealternative
alternativethat
thatthe
theaverage
averageprice
pricedid
didnot
notrise
rise
company
by49%,
49%,atataa0.01
0.01level
levelofofsignificance.
significance.
by

=49
49
HH0:0:=
49
HH1:1:49
18
nn==18
For==0.01
0.01and
and(18-1)
(18-1)==17
17df
df, ,
For
criticalvalues
valuesof
ofttare
are2.898
2.898
critical
Thetest
teststatistic
statisticis:
is:
The

x 0
s
n

Donot
notreject
rejectHH0if:
if:[-2.898
[-2.898t
t 2.898]
2.898]
Do
0
RejectHH0if:
if:[t[t<<-2.898]
-2.898]or
or tt2.898]
2.898]
Reject
0

n = 18
n = 18
x = 38
x = 38
s = 14
s = 14

t
t

x
38 - 49
x 0
0 == 38 - 49
s
14
s
14
n
18
n
18

- 11

=- 11 3.33 Reject H
= 3.3 3.33 Reject H 0
0
3.3

7-62

## Additional Examples (d) : Continued

The t Distribution
0.8
0.7

.99

0.6
0.5
0.4
0.3
0.2

.005

.005

0.1
0.0
-2.898

2.898

Lower Rejection
Region

Nonrejection
Region

Upper Rejection
Region

Sincethe
thetest
teststatistic
statisticfalls
fallsin
in
Since
therejection
rejectionregion,
region,HH0isis
the
0
rejected,and
andwe
wemay
mayconclude
conclude
rejected,
thatthe
theaverage
averageprice
pricehas
hasnot
not
that
risenby
by49%.
49%. Since
Sincethe
thetest
test
risen
statisticisisin
inthe
thelower
lower
statistic
rejectionregion,
region,we
wemay
may
rejection
concludethat
thatthe
theaverage
average
conclude
pricehas
hasrisen
risenby
byless
lessthan
than
price
49%.
49%.

7-63

Canon,Inc,.
Inc,.has
hasintroduced
introducedaacopying
copyingmachine
machinethat
thatfeatures
featurestwo-color
two-colorcopying
copyingcapability
capability
Canon,
compactsystem
systemcopier.
copier. The
Theaverage
averagespeed
speedofofthe
thestandard
standardcompact
compactsystem
systemcopier
copierisis
ininaacompact
27copies
copiesper
perminute.
minute. Suppose
Supposethe
thecompany
companywants
wantstototest
testwhether
whetherthe
thenew
newcopier
copierhas
hasthe
the
27
sameaverage
averagespeed
speedas
asits
itsstandard
standardcompact
compactcopier.
copier. Conduct
Conductaatest
testatatan
an=
=0.05
0.05 level
level
same
significance.
ofofsignificance.

=27
27
HH0:0:=
27
HH1:1:27
24
nn==24
For==0.05
0.05and
and(24-1)
(24-1)==23
23df
df, ,
For
criticalvalues
valuesof
ofttare
are2.069
2.069
critical
Thetest
teststatistic
statisticis:
is:
The

x 0
s
n

Donot
notreject
rejectHH0if:
if:[-2.069
[-2.069t
t 2.069]
2.069]
Do
0
RejectHH0if:
if:[t[t<<-2.069]
-2.069]or
or tt2.069]
2.069]
Reject
0

24
nn == 24
24.6
xx == 24.6
7.4
s s == 7.4
t t

xx00
ss
nn

24.6--27
27
24.6
==
7.4
7.4
24
24

-2.4
-2.4
.59
==
1.159
1.51
1.51

Do
Donot
notreject
rejectHH

00

7-64

## Additional Examples (e) : Continued

The t Distribution
0.8
0.7

.95

0.6
0.5
0.4
0.3
0.2

.025

.025

0.1
0.0
-2.069

2.069

Lower Rejection
Region

Nonrejection
Region

Upper Rejection
Region

Sincethe
thetest
teststatistic
statisticfalls
fallsin
in
Since
thenonrejection
nonrejectionregion,
region,HH00isis
the
notrejected,
rejected,and
andwe
wemay
maynot
not
not
concludethat
thatthe
theaverage
average
conclude
speedisisdifferent
differentfrom
from27
27
speed
copiesper
perminute.
minute.
copies

7-65

Statistical Significance
While the null hypothesis is maintained to be true throughout a hypothesis
test, until sample data lead to a rejection, the aim of a hypothesis test is
often to disprove the null hypothesis in favor of the alternative hypothesis.
This is because we can determine and regulate , the probability of a Type I
error, making it as small as we desire, such as 0.01 or 0.05. Thus, when we
reject a null hypothesis, we have a high level of confidence in our decision,
since we know there is a small probability that we have made an error.
A given sample mean will not lead to a rejection of a null hypothesis unless
it lies in outside the nonrejection region of the test. That is, the nonrejection
region includes all sample means that are not significantly different, in a
statistical sense, from the hypothesized mean. The rejection regions, in turn,
define the values of sample means that are significantly different, in a
statistical sense, from the hypothesized mean.

7-66

Aninvestment
investmentanalyst
analystfor
forGoldman
GoldmanSachs
Sachsand
andCompany
Companywanted
wantedtototest
testthe
thehypothesis
hypothesis
An
byBritish
Britishsecurities
securitiesexperts
expertsthat
that70%
70%ofofall
allforeign
foreigninvestors
investorsininthe
theBritish
Britishmarket
market
wereAmerican.
American. The
Theanalyst
analystgathered
gatheredaarandom
randomsample
sampleofof210
210accounts
accountsofofforeign
foreign
were
investorsininLondon
Londonand
andfound
foundthat
that130
130were
wereowned
ownedby
byU.S.
U.S.citizens.
citizens. At
Atthe
the=
=0.05
0.05
investors
levelofofsignificance,
significance,isisthere
thereevidence
evidencetotoreject
rejectthe
theclaim
claimofofthe
theBritish
Britishsecurities
securitiesexperts?
experts?
level

0.70
HH0:0:pp==0.70
0.70
HH1:1:pp0.70
210
nn==210
For==0.05
0.05critical
criticalvalues
valuesof
ofzzare
are1.96
1.96
For
Thetest
teststatistic
statisticis:
is: z p p0
The
p0 q 0
n

Donot
notreject
rejectHH0if:
if:[-1.96
[-1.96z
z 1.96]
1.96]
Do
0
RejectHH0if:
if:[z[z<<-1.96]
-1.96]or
or zz1.96]
1.96]
Reject
0

210
nn == 210
130
130
p

=
.619
p = 21000.619
210
p p- -pp 0
0
z z==
==
p
q
p 0q 0
0 0
nn
==

0.619--0.70
0.70
0.619
(0.70)(0.30)
(0.70)(0.30)
210
210

-0.081
-0.081
.5614
Reject
RejectHH
22.5614
0.0316
0.0316
00

7-67

TheEPA
EPAsets
setslimits
limitson
onthe
theconcentrations
concentrationsofofpollutants
pollutantsemitted
emittedby
byvarious
variousindustries.
industries. Suppose
Supposethat
thatthe
the
The
upperallowable
allowablelimit
limiton
onthe
theemission
emission ofofvinyl
vinylchloride
chlorideisisset
setatatan
anaverage
averageofof55
55ppm
ppmwithin
withinaarange
rangeofoftwo
two
upper
milesaround
aroundthe
theplant
plantemitting
emittingthis
thischemical.
chemical. To
Tocheck
checkcompliance
compliancewith
withthis
thisrule,
rule,the
theEPA
EPAcollects
collectsaa
miles
randomsample
sampleofof100
differenttimes
timesand
anddates
dateswithin
withinthe
thetwo-mile
two-milerange
rangearound
aroundthe
theplant.
plant. The
The
random
findingsare
arethat
thatthe
thesample
sampleaverage
averageconcentration
concentrationisis60
60ppm
ppmand
andthe
thesample
samplestandard
standarddeviation
deviationisis20
20ppm.
ppm.
findings
thereevidence
evidencetotoconclude
concludethat
thatthe
theplant
plantininquestion
questionisisviolating
violatingthe
thelaw?
law?
IsIsthere

55
HH0:0:55
55
HH1:1:55
100
nn==100
For==0.01,
0.01,the
thecritical
criticalvalue
value
For
ofzzisis2.326
2.326
of
Thetest
teststatistic
statisticis:
is:
The

x 0
s
n

Donot
notreject
rejectHH0if:
if:[z[z2.326]
2.326]
Do
0
RejectHH0if:
if:zz2.326]
2.326]
Reject
0

100
nn == 100
60
xx == 60
20
s s == 20
z z

xx00
ss
nn

==

60--55
55
60
20
20
100
100

==

55 2.5
2.5
22

Reject
RejectHH

00

7-68

## Additional Examples (g) : Continued

Critical Point for a Right-Tailed Test
0 .4

0.99

f(z)

0 .3

0 .2

0 .1

0 .0
-5

2.326
2.5

Nonrejection
Region

Rejection
Region

Sincethe
thetest
teststatistic
statisticfalls
fallsin
in
Since
therejection
rejectionregion,
region,HH00isis
the
rejected,and
andwe
wemay
mayconclude
conclude
rejected,
thatthe
theaverage
averageconcentration
concentration
that
ofvinyl
vinylchloride
chlorideisismore
morethan
than
of
55ppm.
ppm.
55

7-69

A certain kind of packaged food bears the following statement on the package: Average net weight 12 oz.
Suppose that a consumer group has been receiving complaints from users of the product who believe that they are
getting smaller quantities than the manufacturer states on the package. The consumer group wants, therefore, to
test the hypothesis that the average net weight of the product in question is 12 oz. versus the alternative that the
packages are, on average, underfilled. A random sample of 144 packages of the food product is collected, and it is
found that the average net weight in the sample is 11.8 oz. and the sample standard deviation is 6 oz. Given these
findings, is there evidence the manufacturer is underfilling the packages?

12
HH0:0:12
12
HH1:1:12
144
nn==144
For==0.05,
0.05,the
thecritical
criticalvalue
value
For
ofzzisis-1.645
-1.645
of
Thetest
teststatistic
statisticis:
is:
The

x 0
s
n

Donot
notreject
rejectHH0if:
if:[z[z-1.645]
-1.645]
Do
0
RejectHH0if:
if:zz]
]
Reject
0

144
nn == 144
11.8
xx == 11.8
ss == 66

11.8-12
-12
xx 0 11.8
0
z

=
z
=
ss
66
144
nn
144
-.2
-.2
=
Do
Donot
notreject
rejectHH
= .5 00.4.4
00
.5

7-70

## Additional Examples (h) : Continued

Critical Point for a Left-Tailed Test
0.4

0.95

f(z)

0.3

0.2

0.1

0.0
-5

-1.645
-0.4

Rejection
Region

Nonrejection
Region

Sincethe
thetest
teststatistic
statisticfalls
fallsin
in
Since
thenonrejection
nonrejectionregion,
region,HH00isis
the
notrejected,
rejected,and
andwe
wemay
maynot
not
not
concludethat
thatthe
the
conclude
manufacturerisisunderfilling
underfilling
manufacturer
packageson
onaverage.
average.
packages

7-71

floodlightisissaid
saidtotolast
lastan
anaverage
averageofof65
65hours.
hours. AAcompetitor
competitorbelieves
believesthat
thatthe
theaverage
averagelife
lifeofofthe
the
AAfloodlight
floodlightisisless
lessthan
thanthat
thatstated
statedby
bythe
themanufacturer
manufacturerand
andsets
setsout
outtotoprove
provethat
thatthe
themanufacturers
manufacturers
floodlight
claimisisfalse.
false. AArandom
randomsample
sampleofof21
21floodlight
floodlightelements
elementsisischosen
chosenand
andshows
showsthat
thatthe
thesample
sample
claim
averageisis62.5
62.5hours
hoursand
andthe
thesample
samplestandard
standarddeviation
deviationisis3.3. Using
Using=0.01,
=0.01,determine
determinewhether
whetherthere
there
average
evidencetotoconclude
concludethat
thatthe
themanufacturers
manufacturersclaim
claimisisfalse.
false.
isisevidence

65
HH0:0:65
65
HH1:1:65
21
nn==21
For==0.01
0.01an
an(21-1)
(21-1)==20
20df,
df,the
the
For
criticalvalue
value-2.528
-2.528
critical
Thetest
teststatistic
statisticis:
is:
The
Donot
notreject
rejectHH0if:
if:[t[t-2.528]
-2.528]
Do
0
RejectHH0if:
if:zz]
]
Reject
0

7-72

## Additional Examples (i) : Continued

Critical Point for a Left-Tailed Test
0 .4

0.95

f(t)

0 .3

0 .2

0 .1

0 .0
-5

-2.528
-3.82

Rejection
Region

Nonrejection
Region

Sincethe
thetest
teststatistic
statisticfalls
fallsin
in
Since
therejection
rejectionregion,
region,HH00isis
the
rejected,and
andwe
wemay
mayconclude
conclude
rejected,
thatthe
themanufacturers
manufacturersclaim
claim
that
false,that
thatthe
theaverage
average
isisfalse,
floodlightlife
lifeisisless
lessthan
than65
65
floodlight
hours.
hours.

7-73

Afterlooking
lookingatat1349
1349hotels
hotelsnationwide,
nationwide,weve
wevefound
found13
13that
thatmeet
meetour
ourstandards.
standards. This
Thisstatement
statementby
bythe
theSmall
Small
After
LuxuryHotels
HotelsAssociation
Associationimplies
impliesthat
thatthe
theproportion
proportionofofall
allhotels
hotelsininthe
theUnited
UnitedStates
Statesthat
thatmeet
meetthe
theassociations
associations
Luxury
standardsisis13/1349=0.0096.
13/1349=0.0096. The
Themanagement
managementofofaahotel
hotelthat
thatwas
wasdenied
deniedacceptance
acceptancetotothe
theassociation
associationwanted
wantedtoto
standards
provethat
thatthe
thestandards
standardsare
arenot
notasasstringent
stringentasasclaimed
claimedand
andthat,
that,ininfact,
fact,the
theproportion
proportionofofall
allhotels
hotelsininthe
theUnited
United
prove
Statesthat
thatwould
wouldqualify
qualifyisishigher
higherthan
than0.0096.
0.0096. The
Themanagement
managementhired
hiredan
anindependent
independentresearch
researchagency,
agency,which
which
States
visitedaarandom
randomsample
sampleofof600
600hotels
hotelsnationwide
nationwideand
andfound
foundthat
that77ofofthem
themsatisfied
satisfiedthe
theexact
exactstandards
standardsset
setby
bythe
the
visited
association. IsIsthere
thereevidence
evidencetotoconclude
concludethat
thatthe
thepopulation
populationproportion
proportionofofall
allhotels
hotelsininthe
thecountry
countrysatisfying
satisfyingthe
the
association.
standardsset
setby
bythe
theSmall
SmallLuxury
Luxuryhotels
hotelsAssociation
Associationisisgreater
greaterthan
than0.0096?
0.0096?
standards

0.0096
HH0:0:pp0.0096
0.0096
HH1:1:pp0.0096
600
nn==600
For==0.10
0.10 the
thecritical
criticalvalue
value1.282
1.282
For
Thetest
teststatistic
statisticis:
is:
The
Donot
notreject
rejectHH0if:
if:[z[z1.282]
1.282]
Do
0
RejectHH0if:
if:zz]
]
Reject
0

7-74

## Additional Examples (j) : Continued

Critical Point for a Right-Tailed Test
0 .4

0.90

f(z)

0 .3

0 .2

0 .1

0 .0
-5

1.282

0.519

Nonrejection
Region

Sincethe
thetest
teststatistic
statisticfalls
fallsin
in
Since
thenonrejection
nonrejectionregion,
region,HH00isis
the
notrejected,
rejected,and
andwe
wemay
maynot
not
not
concludethat
thatproportion
proportionof
ofall
all
conclude
hotelsin
inthe
thecountry
countrythat
thatmeet
meet
hotels
theassociations
associationsstandards
standardsisis
the
greaterthan
than0.0096.
0.0096.
greater

Rejection
Region

## NOTE: Examples (a) through (j) can be solved using

MINITAB or the EXCEL templates.

7-75

## The p-Value Revisited

Standard Normal Distribution

## Standard Normal Distribution

0.4

0.4

f(z)

0.2

0.2

0.1

0.1

0.0

p-value=area to
right of the test statistic
=0.0062

0.3

f(z)

p-value=area to
right of the test statistic
=0.3018

0.3

0.0
-5

0.519

-5

2.5

Thep-value
p-valueisisthe
theprobability
probabilityof
ofobtaining
obtainingaavalue
valueof
ofthe
thetest
teststatistic
statisticas
asextreme
extremeas,
as,
The
ormore
moreextreme
extremethan,
than,the
theactual
actualvalue
valueobtained,
obtained,when
whenthe
thenull
nullhypothesis
hypothesisisistrue.
true.
or
Thep-value
p-valueisisthe
thesmallest
smallestlevel
levelof
ofsignificance,
significance,,
,atatwhich
whichthe
thenull
nullhypothesis
hypothesis
The
maybe
berejected
rejectedusing
usingthe
theobtained
obtainedvalue
valueof
ofthe
thetest
teststatistic.
statistic.
may

7-76

## The p-Value: Rules of Thumb

Whenthe
thep-value
p-valueisissmaller
smallerthan
than0.01,
0.01,the
theresult
resultisisconsidered
consideredto
to
When
bevery
verysignificant.
significant.
be
Whenthe
thep-value
p-valueisisbetween
between0.01
0.01and
and0.05,
0.05,the
theresult
resultisis
When
consideredto
tobe
besignificant.
significant.
considered
Whenthe
thep-value
p-valueisisbetween
between0.05
0.05and
and0.10,
0.10,the
theresult
resultisis
When
consideredby
bysome
someas
asmarginally
marginallysignificant
significant(and
(andby
bymost
mostas
asnot
not
considered
significant).
significant).
Whenthe
thep-value
p-valueisisgreater
greaterthan
than0.10,
0.10,the
theresult
resultisisconsidered
considered
When
notsignificant.
significant.
not

7-77

## p-Value: Two-Tailed Tests

p-value=double the area to
left of the test statistic
=2(0.3446)=0.6892
0.4

f(z)

0.3

0.2

0.1

0.0
-5

-0.4

0.4

Inaatwo-tailed
two-tailedtest,
test,we
wefind
findthe
thep-value
p-valueby
bydoubling
doublingthe
thearea
areain
in
In
thetail
tailof
ofthe
thedistribution
distributionbeyond
beyondthe
thevalue
valueof
ofthe
thetest
teststatistic.
statistic.
the

7-78

## The p-Value and Hypothesis Testing

Thefurther
furtheraway
awayininthe
thetail
tailof
ofthe
thedistribution
distributionthe
thetest
teststatistic
statisticfalls,
falls,the
thesmaller
smaller
The
thep-value
p-valueand,
and,hence,
hence,the
themore
moreconvinced
convincedwe
weare
arethat
thatthe
thenull
nullhypothesis
hypothesisisis
isisthe
falseand
andshould
shouldbe
berejected.
rejected.
false
Inaaright-tailed
right-tailedtest,
test,the
thep-value
p-valueisisthe
thearea
areatotothe
theright
rightof
ofthe
thetest
teststatistic
statisticififthe
the
In
teststatistic
statisticisispositive.
positive.
test
Inaaleft-tailed
left-tailedtest,
test,the
thep-value
p-valueisisthe
thearea
areatotothe
theleft
leftof
ofthe
thetest
teststatistic
statisticififthe
the
In
teststatistic
statisticisisnegative.
negative.
test
Inaatwo-tailed
two-tailedtest,
test,the
thep-value
p-valueisistwice
twicethe
thearea
areatotothe
theright
rightof
ofaapositive
positivetest
test
In
statisticor
ortotothe
theleft
leftof
ofaanegative
negativetest
teststatistic.
statistic.
statistic
Foraagiven
givenlevel
levelof
ofsignificance,:
significance,:
For
Rejectthe
thenull
nullhypothesis
hypothesisififand
andonly
onlyifp-value
ifp-value
Reject

7-79

## 7-5: Pretest Decisions

Onecan
canconsider
considerthe
thefollowing:
following:
One
Sample
SampleSizes
Sizes

versusfor
versusforvarious
varioussample
samplesizes
sizes

The
ThePower
PowerCurve
Curve

The
TheOperating
OperatingCharacteristic
CharacteristicCurve
Curve

## Note: You can use the different templates that come

with the text to investigate these concepts.

7-80

## Example 7-9: Using the Template

Note: Similar
analysis can
be done when
testing for a
population
proportion.

Computing and
Plotting Required
Sample size.

7-81

Plot of
versus for
various n.
Note: Similar
analysis can
be done when
testing for a
population
proportion.

7-82

Note: Similar
analysis can
be done when
testing for a
population
proportion.

7-83

The Operating
Characteristic
Curve for
H0:> 75;
= 10; n = 40;
= 10%
Note: Similar
analysis can be
done when
testing a
population
proportion.

7-84

H0:p> 0.52;
p1 = 0.49;
= 10%
Required Sample
size = 2233