Hypothesis Testing

(Difference of Two Population

Means for Small Samples)
 Hypothesis Testing
What is a hypothesis test:
• A formal way to statistically test a theoretical
assumption based on the data we have.

• Key concepts:
• Null hypothesis H0 : The prediction we usually get
information if rejecting

• Alternative Hypothesis H1

• Significance level α : The probability of rejecting Ho

when it is true (Type I error, false positive)
 Hypothesis Testing
Why do we need it?
• Is there a significant difference between two
populations?

• Is there a significant relationship between two

variables?

• Is the mean bigger , smaller or different from a

given value?
 Hypothesis Testing
A simple example
• We will examine the steps of hypothesis testing
through a general example:

• Assume we have n data from two different

populations A and B,

,…, with sample mean and,

,…, with sample mean

 Hypothesis Testing
A simple Example:
• We are interested to know whether there
are significant differences between the two
populations or not.
• To answer this question, we need to perform
a statistical test.
 Hypothesis Testing
A simple Example:
• Step 1: Identify our hypothesis.

Ho: As equal to Bs (no differences)

H1: otherwise
 Hypothesis Testing
A simple Example:
• Step 2: We need a statistic that will represent
our question.
• An example could be: T=-|
• If As where identical to Bs T would be zero.

• The bigger T is, the more far away are As from Bs

 Hypothesis Testing
A simple example:

• We need to calculate T for our data. We will denote

the specific value of T for our data as .

• Step 3: We need the distribution of T (which we view

as a random variable) under the null hypothesis.

We will assume that we know this distribution and we

will denote it as .
 Hypothesis Testing
A simple example:

• Step 4: Measure how likely it is to observe the value

under the null hypothesis.

• If it is very unlikely to observe it under the null

assumption, then we have evidence that As are not the
same as Bs.

• In other words we need to calculate the probability to

observe something more extreme than what we observed
under the null assumption.
 Hypothesis Testing
A simple example:

• This probability is called the p-value and we can

write:

P(T≥)

Remember we know the value . T is a random variable

and in order to calculate the p-value the only thing we
need is to know its distribution.
 Hypothesis Testing
A simple Example:
• Step 5: Set a significance level
e.g.: a=0.01

If a>p-value then reject the null hypothesis Ho

If we reject it means we have evidence that As are not the
same with Bs

If we don’t reject, then we say that there is not enough

evidence to reject the assumption that As are same as Bs
 Hypothesis Testing
Example: One sample t-test for the mean
• We use this test when we want to compare a mean () to a
specific value ().
• In other words,
Ho: μ= vs H1: μ different from

• The statistic used is of the form:

T=
Where s is the standard deviation and n the no of data points.
• It follows under the null, a t distribution with n-1 degrees of
freedom
 Hypothesis Testing
Numerical Example:
• Assume we have a 20 observations of the weights of a
product in grams. The mean of this sample is 8.059576
• The standard deviation is 0.3190233
• The question we want to answer : Is the mean statistically
different from 7.82? (answer for α=0.01)

• In other words, Step 1: identify the hypothesis

Ho: μ=7.82 vs H1:μ different from 7.82
 Hypothesis Testing
Numerical Example:
• Step 2: Calculate the statistic
T= = =3.358424 ≈3.4

• Step 3:Identify the distribution of t under null:

t distribution with 20-1=19 degrees of freedom

• Step 4:Calculate the p-value

P(t≥)=1-P(t<3.4)=..
Find P(t<3.4) using Tables for Student -t distribution
Hypothesis Testing
 Hypothesis Testing
Numerical Example:

• From the Table we see that P(t<3.4)=0.9985

• The p-value is: 1-0.9985=0.0015

α=0.01>p-value=0.0015 so we reject Ho

That means that the mean seems to be significantly

different from 7.82.
Thank you!