INFERENTIAL STATISTICS

STATISTICAL INFERENCE is concerned

with the formulation of conclusions or
generalizations about a population based on
the observation or a series of observations
of a sample drawn from the population.

Inferential statistics are used to test

hypotheses and make estimations using
sample data.
 Statistics are then used as estimators of
the required population parameters. Thus, the
sample mean ẋ is used as an estimator of the
population mean µ. In order to understand
how to deal with such estimators, it is
necessary to introduce a special type of
probability distribution: the SAMPLING
DISTRIBUTION.
 SAMPLING DISTRIBUTION

It is a theoretical distribution which

is generally classified according to the
type of statistic involved. The standard
deviation of the sampling distribution of
any statistic is referred to as the standard
error of that statistic.
Consider a population consisting of 1,2,3,4, and 5. Clearly, these
five observations that make up the population are values of a
random variable X having a probability distribution:
f(x) = 1/5, x = 1,2,3,4,5.
x f(x) xf(x) µ (x-µ)2 (x-µ)2 f(x)

1 .2 .2 3 4 .8
2 .2 .4 1 .2
3 .2 .6 0 .0
4 .2 .8 1 .2
5 .2 1.0 4 .8
Σx = 15 Σxf(x) Σ(x-µ)2 f(x)
=3.0 =2.0

µ = Σxf(x)=3.0 or µ = 15/5
σ2 = Σ(x-µ)2 f(x) = 2.0
σ = Ѵ σ2 = Ѵ2 = 1.41
 STATISTICAL HYPOTHESES

A statistical hypothesis is an assertion or conjecture

concerning one or more populations. There are two types:
NULL HYPOTHESIS and ALTERNATIVE HYPOTHESIS.

NULL HYPOTHESIS (H0) – “hypothesis of no difference”. It is

ordinarily formulated with the purpose of being accepted or
rejected. If the null hypothesis is rejected, the alternative
hypothesis is accepted. The ALTERNATIVE HYPOTHESIS is
denoted by H1.
TYPES OF ALTERNATIVE HYPOTHESES:
1. Non directional – asserts that one value is different
from another. It is an assertion that there is a
significant difference between two statistical
measures.
2. Directional – assertion that one measure is less
than (or greater than) another measure of similar
nature.
Mathematically, a non directional hypothesis makes
use of the “not equal to” (≠) sign, while directional
hypothesis involves one of the order relations, “less
than” (<) or “greater than” (>).
1. H0: The average annual income of all the families of
Mapayapa District is ₱ 36,000.
H1 : The average annual income of all the families of
Mapayapa District is not ₱ 36,000.
2. H0: There is no significant difference between the
average life of brand A light bulbs and that of brand B
light bulbs.
H1 : There is significant difference between the
average life of brand A light bulbs and that of brand B
light bulbs.
3. H0: The proportion of Metro Manila college students
who prefer the taste of Coke is 2/3.
H1 : The proportion of Metro Manila college
students who prefer the taste of Coke is less than
2/3.
4. H0: The proportion of TV viewers who watch talk
shows from 9 – 10 in the evening is the same on
Wednesdays and Fridays.
H1 : The proportion of TV viewers who watch talk
shows from 9 – 10 in the evening is greater on
Wednesdays than on Fridays.
TWO TYPES OF ERRORS
Four possibilities exist in connection with the
acceptance or rejection of a null hypothesis. These
are:
1. The null hypothesis is accepted when, in fact, it
is true.
2. The null hypothesis is accepted when in fact, it
is false.
3. The null hypothesis is rejected when, in fact, it is
true.
4. The null hypothesis is rejected when, in fact, it is
false.
 We arrive at a “perfect decision” (this
means no error is made) if we accept a true
null hypothesis (possibility 1) or reject a false
null hypothesis (possibility 4). We commit an
error if we either accept a false null
hypothesis (possibility 2) or reject a true null
hypothesis (possibility 3).
Rejecting H0 in favor of H1 when, in fact,
H0 is true, is a type I error. Accepting H0
when, in fact, it is false is a type II error.
 For example, if we reject the hypotheses that
“the average annual income of all the families in
Mapayapa District is ₱36,000” when, in fact, the
actual mean does not vary “significantly” from
₱36,000, then we are committing a type I error. On
the other hand, if we accept the hypothesis that
“brand A and brand B light bulbs do not differ
significantly in terms of their average lifetimes”
when, in fact, the opposite is true, then we are
committing a type II error.
 Consequences of Decisions in Testing
Hypothesis

Decision/Fact H0 is true H0 is false

Accept H0 Correct decision Type II error

Reject H0 Type I error Correct decision

 LEVEL OF SIGNIFICANCE
This is used in determining a critical value
which defines a region of rejection (or critical
region) and a region of acceptance. In effect this
critical value serves as a basis for either accepting
or rejecting a hypothesis.
The area of the region of rejection is given
by the level of significance. When α = .05, the
region of rejection will have an area of 0.05; thus,
the region of acceptance will have an area of 0.95.
On the other hand, if α = .01, the area of the
region of rejection will be 0.01 and that of the
region of acceptance will be 0.99.
 STEPS IN HYPOTHESIS TESTING
1.Formulate the null hypothesis (H0) and the
alternative hypothesis (H1).
2.Specify the level of significance α.
3.Choose the appropriate test statistic.
4.Establish the critical region.
5.Compute for the value of statistical test.
6.Make decision and, if possible, draw a
conclusion.