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You are on page 1of 48

(8

th

Edition)

Chapter 9

Fundamentals of Hypothesis

Testing: One-Sample Tests

Chapter Topics

Hypothesis testing methodology

Z test for the mean ( known)

P-value approach to hypothesis testing

Connection to confidence interval estimation

One-tail tests

T test for the mean ( unknown)

Z test for the proportion

Potential hypothesis-testing pitfalls and ethical

considerations

o

o

What is a Hypothesis?

A hypothesis is a

claim (assumption)

about the population

parameter

Examples of parameters

are population mean

or proportion

The parameter must

be identified before

analysis

I claim the mean GPA of

this class is 3.5!

1984-1994 T/Maker Co.

=

The Null Hypothesis, H

0

States the assumption (numerical) to be

tested

e.g.: The average number of TV sets in U.S.

Homes is at least three ( )

Is always about a population parameter

( ), not about a sample

statistic ( )

0

: 3 H >

0

: 3 H >

0

: 3 H X >

The Null Hypothesis, H

0

Begins with the assumption that the null

hypothesis is true

Similar to the notion of innocent until

proven guilty

Refers to the status quo

Always contains the = sign

May or may not be rejected

(continued)

The Alternative Hypothesis, H

1

Is the opposite of the null hypothesis

e.g.: The average number of TV sets in U.S.

homes is less than 3 ( )

Challenges the status quo

Never contains the = sign

May or may not be accepted

Is generally the hypothesis that is

believed (or needed to be proven) to be

true by the researcher

1

: 3 H

Hypothesis Testing Process

Identify the Population

Assume the

population

mean age is 50.

( )

REJECT

Take a Sample

Null Hypothesis

No, not likely!

X 20 likely if Is ? = = 0

0

: 50 H =

)

20 X =

Sampling Distribution of

= 50

It is unlikely that

we would get a

sample mean of

this value ...

... Therefore,

we reject the

null hypothesis

that m = 50.

Reason for Rejecting H

0

20

If H

0

is true

X

... if in fact this were

the population mean.

X

Level of Significance,

Defines unlikely values of sample statistic if

null hypothesis is true

Called rejection region of the sampling distribution

Is designated by , (level of significance)

Typical values are .01, .05, .10

Is selected by the researcher at the beginning

Provides the critical value(s) of the test

E

E

Level of Significance

and the Rejection Region

H

0

: > 3

H

1

: < 3

0

0

0

H

0

: 3

H

1

: > 3

H

0

: = 3

H

1

: = 3

E

E

E/2

Critical

Value(s)

Rejection

Regions

Errors in Making Decisions

Type I Error

Rejects a true null hypothesis

Has serious consequences

The probability of Type I Error is

Called level of significance

Set by researcher

Type II Error

Fails to reject a false null hypothesis

The probability of Type II Error is

The power of the test is

E

)

1

Probability of not making Type I Error

)

1 E

(continued)

Result Probabilities

H

0

: Innocent

The Truth The Truth

Verdict Innocent Guilty Decision H

0

True H

0

False

Innocent Correct Error

Do Not

Reject

H

0

1 - E

Type II

Error ( )

Guilty

Error

Correct

Reject

H

0

Type I

Error

(

E

)

Power

(1 - )

Jury Trial

Hypothesis Test

Type I & II Errors Have an

Inverse Relationship

E

error, the other one increases so that

everything else is unchanged.

Factors Affecting Type II Error

True value of population parameter

Increases when the difference between

hypothesized parameter and its true value

decrease

Significance level

Increases when decreases

Population standard deviation

Increases when increases

Sample size

Increases when n decreases

o

How to Choose between

Type I and Type II Errors

Choice depends on the cost of the errors

Choose smaller Type I Error when the cost of

rejecting the maintained hypothesis is high

A criminal trial: convicting an innocent person

The Exxon Valdez: causing an oil tanker to sink

Choose larger Type I Error when you have an

interest in changing the status quo

A decision in a startup company about a new piece

of software

A decision about unequal pay for a covered group

Critical Values

Approach to Testing

Convert sample statistic (e.g.: ) to test

statistic (e.g.: Z, t or F statistic)

Obtain critical value(s) for a specified

from a table or computer

If the test statistic falls in the critical region,

reject H

0

Otherwise do not reject H

0

X

E

p-Value Approach to Testing

Convert Sample Statistic (e.g. ) to Test

Statistic (e.g. Z, t or F statistic)

Obtain the p-value from a table or computer

p-value: Probability of obtaining a test statistic

more extreme ( or ) than the observed

sample value given H

0

is true

Called observed level of significance

Smallest value of that an H

0

can be rejected

Compare the p-value with

If p-value , do not reject H

0

If p-value , reject H

0

X

>

>

E

E

E

E

General Steps in

Hypothesis Testing

e.g.: Test the assumption that the true mean number of of

TV sets in U.S. homes is at least three ( Known) o

1. State the H

0

2. State the H

1

3. Choose

4. Choose n

5. Choose Test

0

1

: 3

: 3

=.05

100

Z

H

H

n

test

E

>

=

E

100 households surveyed

Computed test stat =-2,

p-value = .0228

Reject null hypothesis

The true mean number of TV

sets is less than 3

(continued)

Reject H

0

E

-1.645

Z

6. Set up critical value(s)

7. Collect data

8. Compute test statistic

and p-value

9. Make statistical decision

10. Express conclusion

General Steps in

Hypothesis Testing

One-tail Z Test for Mean

( Known)

Assumptions

Population is normally distributed

If not normal, requires large samples

Null hypothesis has or sign only

Z test statistic

o

>

/

X

X

X

X

Z

n

o

o

= =

Rejection Region

Z

0

Reject H

0

Z

0

Reject H

0

H

0

: >

0

H

1

: <

0

H

0

:

0

H

1

: >

0

Z Must Be Significantly

Below 0 to reject H

0

Small values of Z dont

contradict H

0

Dont Reject H

0

!

E E

Example: One Tail Test

Q. Does an average box of

cereal contain more than

368 grams of cereal? A

random sample of 25

boxes showed = 372.5.

The company has

specified o to be 15 grams.

Test at the E = 0.05 level.

368 gm.

H

0

: 368

H

1

: > 368

X

Finding Critical Value: One Tail

Z .04 .06

1.6 .9495 .9505 .9515

1.7 .9591 .9599 .9608

1.8 .9671 .9678 .9686

.9738 .9750

Z

0 1.645

.05

1.9 .9744

Standardized Cumulative

Normal Distribution Table

(Portion)

What is Z given E = 0.05?

E = .05

Critical Value

= 1.645

.95

1

Z

o =

Example Solution: One Tail Test

E = 0.5

n = 25

Critical Value: 1.645

Test Statistic:

Decision:

Conclusion:

Do Not Reject at E = .05

No evidence that true

mean is more than 368

Z

0 1.645

.05

Reject

H

0

: 368

H

1

: > 368

1.50

X

Z

n

= =

1.50

p -Value Solution

Z

0

1.50

P-Value =.0668

Z Value of Sample

Statistic

From Z Table:

Lookup 1.50 to

Obtain .9332

Use the

alternative

hypothesis

to find the

direction of

the rejection

region.

1.0000

- .9332

.0668

p-Value is P(Z > 1.50) = 0.0668

p -Value Solution

(continued)

0

1.50

Z

Reject

(p-Value = 0.0668) > (E = 0.05)

Do Not Reject.

p Value = 0.0668

E = 0.05

Test Statistic 1.50 is in the Do Not Reject Region

1.645

One-tail Z Test for Mean

( Known) in PHStat

PHStat | one-sample tests | Z test for the

mean, sigma known

Example in excel spreadsheet

o

Microsoft Excel

Worksheet

Example: Two-Tail Test

Q. Does an average box

of cereal contain 368

grams of cereal? A

random sample of 25

boxes showed =

372.5. The company

has specified o to be

15 grams. Test at the

E = 0.05 level.

368 gm.

H

0

: = 368

H

1

: = 368

X

372.5 368

1.50

15

25

X

Z

n

o

= = =

E = 0.05

n = 25

Critical Value: 1.96

Example Solution: Two-Tail Test

Test Statistic:

Decision:

Conclusion:

Do Not Reject at E = .05

No Evidence that True

Mean is Not 368 Z

0 1.96

.025

Reject

-1.96

.025

H

0

: = 368

H

1

: = 368

1.50

p-Value Solution

(p Value = 0.1336) > (E = 0.05)

Do Not Reject.

0

1.50

Z

Reject

E = 0.05

1.96

p Value = 2 x 0.0668

Test Statistic 1.50 is in the Do Not Reject Region

Reject

PHStat | one-sample tests | Z test for the

mean, sigma known

Example in excel spreadsheet

Two-tail Z Test for Mean

( Known) in PHStat

o

Microsoft Excel

Worksheet

) )

For 372.5, 15 and 25,

the 95% confidence interval is:

372.5 1.96 15/ 25 372.5 1.96 15/ 25

or

366.62 378.38

If this interval contains the hypothesized mean (368),

we do not reject the null hypothesis.

I

X n o

= = =

+

t does. Do not reject.

Connection to

Confidence Intervals

t Test: Unknown

Assumption

Population is normally distributed

If not normal, requires a large sample

T test statistic with n-1 degrees of freedom

o

/

X

t

S n

=

Example: One-Tail t Test

Does an average box of

cereal contain more than

368 grams of cereal? A

random sample of 36

boxes showed X = 372.5,

and s = 15. Test at the E =

0.01 level.

368 gm.

H

0

: 368

H

1

: > 368

o is not given

Example Solution: One-Tail

E = 0.01

n = 36, df = 35

Critical Value: 2.4377

Test Statistic:

Decision:

Conclusion:

Do Not Reject at E = .01

No evidence that true

mean is more than 368

t

35

0

2.437

7

.01

Reject

H

0

: 368

H

1

: > 368

372.5 368

1.80

15

36

X

t

S

n

= = =

1.80

p -Value Solution

0

1.80

t

35

Reject

(p Value is between .025 and .05) > (E = 0.01).

Do Not Reject.

p Value = [.025, .05]

E = 0.01

Test Statistic 1.80 is in the Do Not Reject Region

2.4377

PHStat | one-sample tests | t test for the

mean, sigma known

Example in excel spreadsheet

t Test: Unknown in PHStat

o

Microsoft Excel

Worksheet

Proportion

Involves categorical values

Two possible outcomes

Success (possesses a certain characteristic) and

Failure (does not possesses a certain

characteristic)

Fraction or proportion of population in the

success category is denoted by p

Proportion

Sample proportion in the success category is

denoted by p

S

S

can be approximated by a normal distribution

with mean and standard deviation

(continued)

Number of Successes

Sample Size

s

X

p

n

= =

s

p

p =

(1 )

s

p

p p

n

o

=

Example: Z Test for Proportion

Q. A marketing company

claims that it receives

4% responses from its

mailing. To test this

claim, a random

sample of 500 were

surveyed with 25

responses. Test at the

E = .05 significance

level.

)

) )

Check:

500 .04 20

5

1 500 1 .04

480 5

np

n p

= =

>

=

= >

) )

.05 .04

1.14

1 .04 1 .04

500

S

p p

Z

p p

n

= = =

Z Test for Proportion: Solution

E = .05

n = 500

Do not reject at E = .05

H

0

: p = .04

H

1

: p = .04

Critical Values: 1.96

Test Statistic:

Decision:

Conclusion:

Z

0

Reject Reject

.025 .025

1.96 -1.96

1.14

We do not have sufficient

evidence to reject the

companys claim of 4%

response rate.

p -Value Solution

(p Value = 0.2542) > (E = 0.05).

Do Not Reject.

0

1.14

Z

Reject

E = 0.05

1.96

p Value = 2 x .1271

Test Statistic 1.14 is in the Do Not Reject Region

Reject

Z Test for Proportion in PHStat

PHStat | one-sample tests | z test for the

proportion

Example in excel spreadsheet

Microsoft Excel

Worksheet

Potential Pitfalls and

Ethical Considerations

Randomize data collection method to reduce

selection biases

Do not manipulate the treatment of human

subjects without informed consent

Do not employ data snooping to choose

between one-tail and two-tail test, or to

determine the level of significance

Potential Pitfalls

and Ethical Considerations

Do not practice data cleansing to hide

observations that do not support a stated

hypothesis

Report all pertinent findings

(continued)

Chapter Summary

Addressed hypothesis testing methodology

Performed Z Test for the mean ( Known)

Discussed p Value approach to hypothesis

testing

Made connection to confidence interval

estimation

o

Chapter Summary

Performed one-tail and two-tail tests

Performed t test for the mean ( unknown)

Performed Z test for the proportion

Discussed potential pitfalls and ethical

considerations

(continued)

o

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