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Basic Hypothesis Testing

Prepared by: Ross Christian Manuel


Objectives
At the end of the lesson, the students should be able to:
• illustrate:
(a) null hypothesis
(b) alternative hypothesis
(c) level of significance
(d) rejection region; and
(e) types of errors in hypothesis testing.
• calculate the probabilities of committing a Type I and Type II error.
• formulate the appropriate null and alternative hypotheses on a population mean.
• identify the parameter to be tested given a real-life problem.

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Hypothesis
• A hypothesis is a hunch, assumption, suspicion,
assertion, or an idea about a phenomenon, relationship
or situation, the reality or truth of which we do not
know.
• “A premise or claim that we want to test”

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Two Kinds of Hypothesis
1. Null Hypothesis (𝐻0 )
- is a statement that there is no difference between
a parameter and a specific value
- “a currently accepted value for a parameter”
2. Alternative Hypothesis (𝐻𝑎 𝑜𝑟 𝐻1 )
- is the opposite or negation of the null hypothesis
- “also called the research hypothesis”
- “involves the claim to be tested”

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Examples
1. It is believed that a candy machine makes
chocolate bars that are on average 5g. A worker
claims that the machine after maintenance no
longer makes 5g bars. Write 𝐻0 and 𝐻𝑎 .

𝑯𝟎 : 𝝁 = 𝟓𝒈
𝑯𝒂 : 𝝁 ≠ 𝟓𝒈

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2. Doctors believe that the average teen sleeps on
average no longer than 10 hours per day. A
researcher believes that teens on average sleep
longer. Write Ho and Ha.

𝑯𝟎 : 𝝁 ≤ 𝟏𝟎 𝒉𝒐𝒖𝒓𝒔
𝑯𝒂 : 𝝁 > 𝟏𝟎 𝒉𝒐𝒖𝒓𝒔

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3. The school board claims that at least 60% of
students bring a phone to school. A teacher
believes this number is too high. Write the Ho and
Ha.

𝑯𝟎 : 𝒑 ≥ 𝟎. 𝟔𝟎
𝑯𝒂 : 𝒑 < 𝟎. 𝟔𝟎

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4. Suppose Mike claims that the average price for
houses in Castle Hill is more $ 500,000. Write down
the null and alternative hypothesis.

𝑯𝟎 : 𝝁 ≤ $𝟓𝟎𝟎, 𝟎𝟎𝟎
𝑯𝒂 : 𝝁 > $𝟓𝟎𝟎, 𝟎𝟎𝟎

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Two Types of Test
1. Directional Test ( One – tailed Test)
• A test of any statistical hypothesis where the alternative hypothesis
is expressed, using less than (<) or greater than (>) is called
directional or one – tailed test since the critical or rejection region
lies entirely in one tail of the distribution.

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2. Non – Directional Test( Two Tailed Test)
• A test of any statistical hypothesis where the alternative hypothesis is
written with a not equal sign ≠ is called a nondirectional test or two
– tailed test since there is no assertion made on the direction of the
difference. The rejection region is split into two equal parts, one in
each tail of the sampling distribution.

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Two Types of Error
1. Type I Error
• Type I Error occurs when we reject the null
hypothesis when it is true. It is also called alpha
error (∝ 𝑒𝑟𝑟𝑜𝑟)
2. Type II Error
• Type II Error occurs when we accept the null
hypothesis when it is false. It is also called beta
error. (𝛽 𝑒𝑟𝑟𝑜𝑟)
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TYPE II ERROR TYPE I ERROR

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Level of Significance
• The probability of committing Type I error is called
the level of significance.
• It is denoted by the Greek letter 𝛼 (𝑎𝑙𝑝ℎ𝑎)
• The choice for the value of the significance level is
determined by the researcher
• The commonly used levels of significance are 0.05
and 0.01

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Example
1. At 0.01 level of significance means the researcher
is willing to take 1% of error in making a decision. It
also implies that he is 99% confident that he will
make a right decision. Likewise a 0.05 level of
significance means the researcher is willing to take
5% error in decision making. It also implies that he
is 95% confident that he will make a right decision.

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Steps in Testing the Hypothesis
1. Identify the claim and formulate the null and
alternative hypothesis
2. Set the level of significance and determine
whether the test is one – tailed or two – tailed
by looking at how the alternative hypothesis is
expressed. Decide on the test statistic to be
used and find the critical value for the test.
Draw or illustrate the rejection region.

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3. Compute the test value, using the test statistic or
formula for the test.
4. Make a decision whether to accept or reject the
null hypothesis.
5. Formulate a conclusion by answering the
research question.

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Lesson 2
Comparing the Sample Mean
and the Population Mean in a
Large Sample Size

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The Z – Test is used when the following conditions
are satisfied.

1. The population standard deviation is known or


given.
2. The population standard deviation is unknown
but the sample size is sufficiently large, (i.e.,
greater than or equal to thirty, n≥ 𝟑𝟎). In this
case, we use the sample standard deviation (s)
to replace the population standard deviation.

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The Z – test of One – Sample Mean
• The z – test of one – sample mean is
used when we want to test if the sample
mean 𝑋ത differs significantly from a
population mean or hypothesized mean 𝜇.

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• To illustrate, suppose that the mean of
population is known to be 𝜇0 . If we take a
random sample size n from this population
and obtain a sample 𝑋ത which is somewhat
different from 𝜇0 , so there a reason to
believe that there is a significant difference
between the 𝜇0 and 𝑋. ത

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Z – test of One – Sample Mean
Formula:
ഥ − 𝝁) 𝒏
(𝑿
𝒛=
𝝈
Where
ഥ = mean of the sample
𝑿
𝝁 = mean of the population
n = size of the sample
𝝈= standard deviation of the population
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Critical Value for z
Level of Significance
Type of Test
𝛼 = 0.01 𝛼 = 0.05

One - tailed ±2.33 ±1.65

Two - tailed ±2.58 ±1.96

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Example 1
A new drug on the market is claimed by its
manufacturers to reduce overweight women by
4.55 kg per month with a standard deviation of 0.91
kg. Ten women chosen at random have reported
losing an average losing an average of 4.05 kg
within a month. Does this data support the claim of
the manufacturer at 0.05 level of significance?

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Solution:
Step 1
𝑯𝟎 : The average weight loss per month using a new drug is equal
to 4.55kg (𝜇 = 4.55)
𝑯𝒂 : The average weight loss per month using a new drug is not
equal to 4.55 kg (𝜇 ≠ 4.55)

Step 2
Type of test: two – tailed or nondirectional test
Critical value: 𝛼 = 0.05, 𝑡𝑤𝑜 𝑡𝑎𝑖𝑙𝑒𝑑 𝑡𝑒𝑠𝑡, the critical value is 𝑧 =
± 1.96
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Step 3
Compute the test value, using the formula or test statistic.
Given:
𝑋ത = 4.05
𝜇 = 4.55
n = 10
𝜎 = 0.91
(𝑋ത − 𝜇) 𝑛
𝑧=
𝜎
(4.05 − 4.55) 10
𝑧=
0.91
𝒛 = −𝟏. 𝟕𝟒
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Step 4
Decision: Since the computed or test value does not fall
within the rejection region, we accept the null hypothesis.

Step 5
Conclusion: There is no significant difference between the
sample mean and population mean. Thus, the
manufacturer is correct in claiming that the new drug in
the market can reduce overweight women by 4.55 kg per
month.

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Example 2
A sociologist believes that it costs more than
Php 90,000 to raise a child from birth to age one. A
random sample of 49 families, each with a child is
selected to see if this figure is correct. The average
expenses for these families reveal a mean of Php
92,000 with a standard deviation of Php 4,500.
Based on these sample data, can it be concluded
that the sociologist is correct in his claim? Use 0.05
level of significance.
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