Business Statistics, 4e: by Ken Black

Business Statistics, 4e
by Ken Black
Chapter 10
Discrete Distributions
Statistical
Inferences about
Two Populations
Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons. 10-1
Learning Objectives
• Test hypotheses and construct confidence

intervals about the difference in two
population means using the Z statistic.
population means using the t statistic.
Learning Objectives

related populations.
intervals about the differences in two
population proportions.
intervals about two population variances.
Sampling Distribution of the
Difference Between Two Sample
Means
Population 1
x1
X 1
x
x1  Xx2
X 1 2
x1 
n1
Xx1  xX2
1 2
x
x 
2
n2
x2
X 2
Population 2
Sampling Distribution of the
Difference between Two Sample
Means
 1212 2222
 xX xX   1 
1
2 2 x1  x2  
1 1 2 2
X X
1 2
nn11 nn22
 X xX1  Xx2
1 2
x1  xX2 2

1
Z Formula for the Difference
in Two Sample Means
When 12 and22 are known and

Independent Samples
 x  x       1 2
z 1 2
 
2 2
1 2
n n 1 2
Hypothesis Testing for Differences Between
Means: The Wage Example (part 1)
Ho: 1  2  0 Rejection
Rejection
Ha: 1  2  0
Region
Region
 
 .025  .025
2 2
Non Rejection Region
 Xx  Xx
 Xx1  Xx2
1 2
11 2
2
Critical Values
Hypothesis Testing for Differences Between
If z < - 1.96 or z > 1.96, reject Ho.
Rejection
Rejection Region If - 1.96  z  1.96, do not reject Ho.
Region

 .025 
2  .025
2
zZc c 11.96

.96 zZc c11.96
96
0
Critical Values
Hypothesis Testing for Differences
Between Means: The Wage Example
(part 3)
Advertising Managers Auditing Managers
74.256 57.791 71.115 69.962 77.136 43.649
n  32
1
55.052 66.035 63.369
96.234 65.145 67.574
89.807 96.767 59.621
x  70.700
1
57.828 54.335 59.676
93.261 77.242 62.483   16.253

1 63.362 42.494 54.449
  264.164
2
103.030 67.056 69.319 37.194 83.849 46.394
1
74.195 64.276 35.394 99.198 67.160 71.804
75.932 74.194 86.741 61.254 37.386 72.401
80.742 65.360 57.351 n2

 34 73.065 59.505 56.470
39.672 73.904 x 2
 62.187 48.036 72.790 67.814
45.652 54.270  2
 12.900 60.053 71.351 71.492
66.359 58.653

2
93.083 59.045
2
 166.411
61.261 63.508
63.384 68.508
Hypothesis Testing for Differences between
IfIf zZ<-11.96 z
.96 or Z 1.96, reject
> 1.96, rejectHHo.0 .
Rejection
Rejection Region IfIf - 1.96
1.96 Zz 1.96,
1.96,do
donot
notreject
rejectHHo. 0 .
 
Region
(xX
1 1  ) 2 (1 
x2X  2)
zZ 1 2

 .025
 1S
2 2

1 S
22
2
 2  2
2
 .025 n1n1 nn2 2


(70.700
70.700 - 62 .187  - (0)
62.187) 0
2.235.35
Zzc  2
2.33
.33 zZc c22.33
33 256
256.253
253 166 166.411
.411
0

c
Critical Values 32
32 34
34
Since zZ=22.35
Since .35 
>1 .96, reject
1.96, rejectHHo.0 .
Difference Between Means: Using Excel
z-Test: Two Sample for Means
Adv Mgr Auditing Mgr

Mean 70.7001 62.187
Known Variance 264.164 166.411
Observations 32 34
Hypothesized Mean Difference 0
z 2.35
P(Z<=z) one-tail 0.0094
z Critical one-tail 1.64
P(Z<=z) two-tail 0.0189

z Critical two-tail 1.960
Demonstration Problem 10.1 (part 1)
Rejection
Ho: 1   2  0
Region
Ha: 1   2  0  .001
zZc c3
3..08 0
Critical Value
Demonstration Problem 10.1 (part 2)
Women Men
x1  $3,352 x2  $5,727
 1  $1,100  2  $1,700
Rejection
Region n1  87 n2  76
 .001
 x  x      
1 2
Non Rejection Region z 1 2
 
2 2
1 2
Zzc  33.08.08
c 0
Critical Value
n n 1 2

 3352  5727    0  10.42
2 2
1100  1700
If z < - 3.08, reject Ho.
87 76
If z   3.08, do not reject Ho.
Since z = - 10.42 < - 3.08, reject Ho.
Confidence Interval to Estimate 1 - 2 When
1, 2 are known
x  x   z    
2 2 2 2
1 2
      x1  x 2   z 1 2
1
n n2
1 2
1 2
n n
1 2
Demonstration Problem 10.2
Re gular Pr emium
n  50
1 n  50
2
x  21.45
1 x  24.6
2
95% Confidence  z = 1.96
  3.46
1   2.99 2
x  x   z        x  x   z  
2 2 2 2
1 2 1 2
n n 1 2
n n1 2
1 2 1 2
1 2
2 2
2.992
 21.45  24.6  1.96 3.46  2.99       21.45  24.6  1.96 3.46
2

50 50 50 1 2 50
 4.42      1.88
1 2
The t Test for Differences
in Population Means
• Each of the two populations is normally
distributed.
• The two samples are independent.
• The values of the population variances are
unknown.
• The variances of the two populations are equal.
12 = 22
t Formula to Test the Difference in
Means Assuming 12 = 22
( x1  x2 )  ( 1   2 )
t
s12 (n1  1)  s22 (n2  1) 1 1

n1  n2  2 n1 n2
Hernandez Manufacturing Company
(part 1)
Ho: 1   2  0
Ha: 1   2  0
Rejection Rejection
Region Region

.025
2
 .05
  .025 
2 2 .025
2
df  n1  n2  2  15  12  2  25 Non Rejection Region
t0.25, 25  2.060
t . 025, 25
 2.060
t  2.060
0 .025, 25
If t < - 2.060 or t > 2.060, reject Ho. Critical Values
If - 2.060  t  2.060, do not reject Ho.
(part 2)
Training Method A Training Method B

56 51 45 59 57 53
47 52 43 52 56 65
42 53 52 53 55 53
50 42 48 54 64 57
47 44 44
n1  15 n2  12
x1  47.73 x2  56.5
s12  19.495 s22  18.273
(part 3)
( x1  x2 )  ( 1   2 )
t
s12 ( n1  1)  s22 ( n2  1) 1 1

n1  n2  2 n1 n2

 47.73  56.50  0
19.49514  18.27311 1

1
15  12  2 15 12
 5.20
If t < - 2.060 or t > 2.060, reject Ho. Since t = -5.20 < -2.060, reject Ho.

MINITAB Output for Hernandez
New-Employee Training Problem
Twosample T for method A vs method B
N Mean StDev SE Mean

method A 15 47.73 4.42 1.1
method B 12 56.60 4.27 1.2
95% C.I. for mu method A - mu method B: (-12.2, -5.3)
T-Test mu method A = mu method B (vs not =): T = -5.20

P=0.0000 DF = 25
Both use Pooled StDev = 4.35
EXCEL Output for Hernandez
New-Employee Training Problem
t-Test: Two-Sample Assuming Equal Variances
Variable 1 Variable 2
Mean 4 7.73 56.5
Variance 19.495 18.27
Observations 15 12
Pooled Variance 18.957
df 25
t Stat - 5.20
P(T<=t) one-tail 1.12E-05
t Critical one-tail 1.71
P(T<=t) two-tail 2.23E-05
t Critical two-tail 2.06
Confidence Interval to Estimate 1 -
2 when 12 and 22 are unknown and
12 = 22
s (n1  1)  s (n2  1) 1 1 2 2
( x1  x2 )  t  1 2
n1  n2  2 n1 n2
where df  n1  n2  2
Dependent Samples
• Before and after Individual Before After

measurements on
the same 1 32 39
individual 2 11 15
• Studies of twins 3 21 35
4 17 13
• Studies of spouses
5 30 41
6 38 39
7 14 22
Formulas for Dependent Samples
d D d
t d 
sd n
n ( d  d ) 2
sd 
n 1
df  n  1
( d ) 2
n  number of pairs d  2
 n
d = sample difference in pairs n 1
D = mean population difference

st = standard deviation of sample difference
d = mean sample difference
P/E Ratios for Nine Randomly Selected
Companies
Company 2001 P/E Ratio 2002 P/E Ratio

1 8.9 12.7
2 38.1 45.4
3 43.0 10.0
4 34.0 27.2
5 34.5 22.8
6 15.2 24.1
7 20.3 32.3
8 19.9 40.1
9 61.9 106.5
Hypothesis Testing with Dependent
Samples: P/E Ratios for Nine Companies
Ho : D  0
Ha : D  0
Rejection Rejection
Region Region
  .01  
.005 .005
df  n  1  9  1  8 2 2
t.005,6  3.355 Non Rejection Region
If t < - 3.355 or t > 3.355, reject Ho.

t .01,11
 3.355 0 t .01,11
 3.355
Critical Value
2001 P/E 2002 P/E

Company Ratio Ratio d
1 8.9 12.7 -3.8
2 38.1 45.4 -7.3
3 43.0 10.0 33.0
4 34.0 27.2 6.8
5 34.5 22.8 11.7
6 15.2 24.1 -8.9
7 20.3 32.3 -12.0
8 19.9 40.1 -20.2
9 61.9 106.5 -44.6
d  5.033
sd  21.599
 5.033  0
t  0.70
21.599
9
Since -3.355  t = - 0.70  3.355, do not reject Ho
t-Test: Paired Two Sample for Means
2001 P/E 2002 P/E

Ratio Ratio
Mean 30.64 35.68
Variance 268.1 837.5
Observations 9 9
Pearson Correlation 0.674
df 8
t Stat -0.7
P(T<=t) one-tail 0.252
t Critical one-tail 1.86
P(T<=t) two-tail 0.504
t Critical two-tail 2.306
Samples: Demonstration Problem 10.5
Individual Before After d
1 32 39 -7
2 11 15 -4
3 21 35 -14
4 17 13 4
5 30 41 -11
6 38 39 -1
7 14 22 -8
Ho: D  0
Ha: D  0 Rejection
Region
  .05
df  n  1  7  1  6   .05
t.05,6  1.943 Non Rejection Region
t .05, 6
 1.943
0
If t  - 1.943, reject Ho. Critical Value
If t  -1.943, do not reject Ho.
d  5.857
sd  6.0945
 5.857  0
t  2.54
6.0945
7
Since t = - 2.54  t c  - 1.943, reject H 0 .
Confidence Intervals for Mean Difference
for Related Samples
d t s d
 D  d t s d
n n
df  n  1
Difference in Number of New-House Sales
Realtor May 2001 May 2002 d
1 8 11 -3
2 19 30 -11
3 5 6 -1
d  3.39
4 9 13 -4
5 3 5 -2
6 0 4 -4
7 13 15 -2
sd  3.27
8 11 17 -6
9 9 12 -3
10 5 12 -7
11 8 6 2
12 2 5 -3
13 11 10 1
14 14 22 -8
15 7 8 -1
16 12 15 -3
17 6 12 -6
Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons. 18 10 10 0 10-35
Confidence Interval for Mean Difference
in Number of New-House Sales
df  n  1  18  1  17
t .005,17  2.898
d t s d
 D  d t s d
n n
3.27 3.27
 3.39  2.898  D  3.39  2.898
18 18
 3.39  2.23  D  3.39  2.23
 5.62  D  1.16
Sampling Distribution of Differences
in Sample Proportions
For large samples
1. n  pˆ  5,
1 1
2. n  qˆ  5, 1 1
3. n  pˆ  5, and
2 2
4. n  qˆ  5 where qˆ = 1 - pˆ
2 2
the difference in sample proportions is normally distributed with

 pˆ 1
 pˆ 2
 pp 1 2
and
p q p q
σ pˆ ˆ
p
 1 1
 2 2
1 2
n 1 n 2
Z Formula for the Difference
in Two Population Proportions
Z
 ˆ  pˆ    p  p 
p 1 2 1 2
p q
1 1

p q
2 2
n 1 n 2
pˆ  proportion from sample 1

1
pˆ  proportion from sample 2

2
n  size of sample 1
1
n  size of sample 2
2
p  proportion from population 1

1
p  proportion from population 2

2
q 1- p
1 1
q 1- p
2 2
Z Formula to Test the Difference
in Population Proportions
Z
 pˆ  pˆ    p  p 1 2 1 2
 1 1 
 p  q    
 n1 n2 
P x1  x2
n n 1 2
n ˆ  n pˆ
p 1 2
 1 2
n n 1 2
q  1 p
Testing the Difference in Population
Proportions (Demonstration Problem 10.6)
pp
Ho :
1 2
0
Rejection
H :pp
Rejection
a 0 Region
Region
1 2

 .01 .005
  .005 
2
2 2 .005
2
z.005  2.575 Non Rejection Region
If z < - 2.575 or z > 2.575, reject Ho.

Zzc  2.575
c 0 Zzc  2.575
c
Critical Values
If - 2.575  z  2.575, do not reject Ho.
Testing the Difference in Population
Proportions (Demonstration Problem 10.6)
n  100
1 n  95
2
z
 ˆ  pˆ    p  p 
p
x  24 x  39
1 2 1 2
1 2
 1 1 
24  p  q   

ˆp  100
1
 .24 ˆp  39
2 95
 .41  n1 n2 

 .24  .41   0
 .323 .677   1

1 

P x x1 2  100 95 
n n1 2 
 .17
24  39 .067
  2.54
100  95
 .323
Since - 2.575  z = - 2.54  2.575, do not reject Ho.

Confidence Interval to Estimate p1 - p2
 pˆ  pˆ   z pˆ qˆ pˆ qˆ  pˆ  pˆ   z pˆ qˆ pˆ qˆ
1
 1 2 2
 pp  1
 1 2 2
1 2
n n
1 2
1 2 1 2
n 1 n 2
n  400
1 n  480 2
Example Problem:
x  48
1 x  187 2 When do men shop
48
pˆ 400  .12 pˆ  187

1
480
 .39
2
for groceries?
qˆ  1  pˆ  .88 qˆ  1  pˆ  .61
1 1 2 2 For a 98% level of confidence, z = 2.33.
 pˆ  pˆ   Z pˆ qˆ pˆ qˆ  pˆ  pˆ   Z pˆ qˆ pˆ qˆ
1 1
 2 2
 pp  1 1
 2 2
1 2
n 1 n 2
1 2 1 2
n 1 n 2
 .12  .39  2.33  .12 .88   .39 .61  p p    .12  .39   2.33
 .12 .88   .39 .61
400 480 1 2 400 480
 .27  .064  pp 1 2
 .27  .064
 .334  p  p  .206
1 2
F Test for Two Population Variances
s12
F 2
s2
dfnumerator  1  n1  1
dfdeno min ator   2  n2  1
F Distribution with 1 = 10 and 2 = 8
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0.00 1.00 2.00 3.00 4.00 5.00 6.00
A Portion of the F Distribution Table
for  = 0.025
F .025, 9 ,11
Numerator Degrees of Freedom
1 2 3 4 5 6 7 8 9
1 647.79 799.48 864.15 899.60 921.83 937.11 948.20 956.64 963.28
2 38.51 39.00 39.17 39.25 39.30 39.33 39.36 39.37 39.39
3 17.44 16.04 15.44 15.10 14.88 14.73 14.62 14.54 14.47
4 12.22 10.65 9.98 9.60 9.36 9.20 9.07 8.98 8.90
Denominator 5 10.01 8.43 7.76 7.39 7.15 6.98 6.85 6.76 6.68
Degrees of Freedom 6 8.81 7.26 6.60 6.23 5.99 5.82 5.70 5.60 5.52
7 8.07 6.54 5.89 5.52 5.29 5.12 4.99 4.90 4.82
8 7.57 6.06 5.42 5.05 4.82 4.65 4.53 4.43 4.36
9 7.21 5.71 5.08 4.72 4.48 4.32 4.20 4.10 4.03
10 6.94 5.46 4.83 4.47 4.24 4.07 3.95 3.85 3.78
11 6.72 5.26 4.63 4.28 4.04 3.88 3.76 3.66 3.59
12 6.55 5.10 4.47 4.12 3.89 3.73 3.61 3.51 3.44
Sheet Metal Example: Hypothesis Test for
Equality of Two Population Variances (Part 1)
  0.05
Ho :  12   22 F.025,9,11  3.59
n1  10
Ha :  12   22 n2  12 1
F.05,9,11 =
F.05,9,11
s12 
1
F 2
s2 3.59
 0.28
dfnumerator  1  n1  1 If F < 0.28 or F > 3.59, reject Ho.

dfdeno min ator   2  n2  1 If 0.28  F  3.59, do reject Ho.
Sheet metal Manufacturer (Part 2)
Rejection Regions
If F < 0.28 or F > 3.59, reject Ho.

If 0.28  F  3.59, do reject Ho.
Non Rejection
Region
F .975,11, 9
 0.28 F .025, 9 ,11
 359
.
Critical Values
Sheet Metal Example (Part 3)
Machine 1 Machine 2
22.3 21.8 22.2 22.0 22.2 22.0
21.8 21.9 21.6 22.1 22.0 22.1
22.3 22.4 21.8 21.7 21.9
21.6 22.5 21.9 21.9 22.1
n1  10 2
n2  12
Fs
0.1138
1
2
  5.63
s12  0.1138 s 2
0.0202 s22  0.0202
Since F = 5.63 > Fc = 3.59, reject Ho.

Business Statistics, 4e: by Ken Black

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Business Statistics, 4e: by Ken Black

Uploaded by

Copyright:

Available Formats

Business Statistics, 4e

• Test hypotheses and construct confidence

• Test hypotheses and construct confidence

When 12 and22 are known and

Non Rejection Region

zZc c 11.96

93.261 77.242 62.483   16.253

75.932 74.194 86.741 61.254 37.386 72.401

80.742 65.360 57.351 n2

Adv Mgr Auditing Mgr

Hypothesized Mean Difference 0

P(Z<=z) one-tail 0.0094

z Critical one-tail 1.64

P(Z<=z) two-tail 0.0189

If t < - 2.060 or t > 2.060, reject Ho. Critical Values

If - 2.060  t  2.060, do not reject Ho.

Training Method A Training Method B

If - 2.060  t  2.060, do not reject Ho.

Twosample T for method A vs method B

N Mean StDev SE Mean

95% C.I. for mu method A - mu method B: (-12.2, -5.3)

T-Test mu method A = mu method B (vs not =): T = -5.20

t-Test: Two-Sample Assuming Equal Variances

• Before and after Individual Before After

D = mean population difference

Company 2001 P/E Ratio 2002 P/E Ratio

t.005,6  3.355 Non Rejection Region

If t < - 3.355 or t > 3.355, reject Ho.

2001 P/E 2002 P/E

Since -3.355  t = - 0.70  3.355, do not reject Ho

2001 P/E 2002 P/E

Individual Before After d

Since t = - 2.54  t c  - 1.943, reject H 0 .

the difference in sample proportions is normally distributed with

pˆ  proportion from sample 1

pˆ  proportion from sample 2

p  proportion from population 1

p  proportion from population 2

If z < - 2.575 or z > 2.575, reject Ho.

Since - 2.575  z = - 2.54  2.575, do not reject Ho.

Numerator Degrees of Freedom

dfnumerator  1  n1  1 If F < 0.28 or F > 3.59, reject Ho.

If F < 0.28 or F > 3.59, reject Ho.

Since F = 5.63 > Fc = 3.59, reject Ho.

You might also like