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Statistics For Business and Economics: Hypothesis Testing: Single Population
Statistics For Business and Economics: Hypothesis Testing: Single Population
Chapter 9
Hypothesis Testing:
Single Population
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-1
Chapter Goals
After completing this chapter, you should be able to:
■ Formulate null and alternative hypotheses for
applications involving
■ a single population mean from a normal distribution
■ a single population proportion (large samples)
■ the variance of a normal distribution
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The Null Hypothesis, H0
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The Null Hypothesis, H0
(continued)
proven guilty
■ Refers to the status quo
■ Always contains “=” , “≤” or “≥” sign
■ May or may not be rejected
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The Alternative Hypothesis, H1
■ Is the opposite of the null hypothesis
■ e.g., The average number of TV sets in U.S.
homes is not equal to 3 ( H1: μ ≠ 3 )
■ Challenges the status quo
■ Never contains the “=” , “≤” or “≥” sign
■ May or may not be supported
■ Is generally the hypothesis that the
researcher is trying to support
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-6
Hypothesis Testing Process
Claim: the
population
mean age is 50.
(Null Hypothesis:
Population
H0: μ = 50 )
Now select a
random sample
I x =20 likely if μ =
50?
s If not likely, Suppose
the sample
REJECT mean age Sample
Null Hypothesis is 20: x = 20
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-7
Reason for Rejecting H0
Sampling Distribution of X
X
20 μ = 50
If H0 is true
... then we
If it is unlikely that
reject the null
we would get a
... if in fact this were hypothesis that
sample mean of
the population mean… μ = 50.
this value ...
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Level of Significance, α
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-9
Level of Significance
and the Rejection Region
Level of significance = α Represents
critical value
H0: μ = 3 α /2 α /2
H1: μ ≠ 3 Rejection
Two-tail test 0 region is
shaded
H0: μ ≤ 3 α
H1: μ > 3
Upper-tail test 0
H0: μ ≥ 3
α
H1: μ < 3
Lower-tail test 0
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Errors in Making Decisions
■ Type I Error
■ Reject a true null hypothesis
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Errors in Making Decisions
(continued)
■ Type II Error
■ Fail to reject a false null hypothesis
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-12
Outcomes and Probabilities
Actual Situation
Decision H0 True H0 False
Fail to Correct
Decision Type II Error
Reject
Key: (1 - α ) (β)
H0
Outcome
(Probability) Reject Type I Error Correct
H0 (α ) Decision
(1-β)
( 1 - β ) is called the
power of the test
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-13
Consequences of Fixing the
Significance Level of a Test
Investigator chooses
significance level Decision rule is Probability of Type II
(probability of Type I established error follows
error)
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Type I & II Error Relationship
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Factors Affecting Type II Error
■ All else equal,
■ β when the difference between
hypothesized parameter and its true value
■ β when α
■ β when σ
■ β when n
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-16
Power of the Test
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-17
Hypothesis Tests for the Mean
Hypothesis
Tests for μ
σ σ
Known Unknown
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-18
9.2
Tests of the Mean of a Normal
Distribution (σ Known)
■ Convert sample result ( ) to a z value
Hypothesis
Tests for μ
σ Known σ Unknown
Consider the test
The decision rule is:
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-19
Decision Rule
H 0: μ = μ 0
H 1: μ > μ 0
Alternate rule:
α
Critical value
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p-Value
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-21
p-Value Approach to Testing
■ Convert sample result (e.g., ) to test statistic (e.g., z
statistic )
■ Obtain the p-value
■ For an upper
tail test:
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-22
Example: Upper-Tail Z Test
for Mean (σ Known)
A phone industry manager thinks that
customer monthly cell phone bill have
increased, and now average over $52 per
month. The company wishes to test this
claim. (Assume σ = 10 is known)
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-23
Example: Find Rejection Region
(continued)
■ Suppose that α = .10 is chosen for this test
α = .10
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Example: Sample Results
(continued)
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Example: Decision
(continued)
Reach a decision and interpret the result:
Reject H0
α = .10
Reject H0
α = .10
0
Do not reject H0 Reject H0
1.28
Z = .88
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Upper-Tail Tests
Critical value
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Lower-Tail Tests
H 0: μ ≥ 3
■ There is only one H 1: μ < 3
critical value, since
the rejection area is
in only one tail α
Critical value
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Two-Tail Tests
■ In some settings, the H 0: μ = 3
alternative hypothesis does
H 1: μ ≠ 3
not specify a unique direction
α/2 α/2
■ There are two
critical values,
3 x
defining the two
Reject H0 Do not reject H0 Reject H0
regions of
rejection -zα/2 0 +zα/2 z
Lower Upper
critical value critical value
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-31
Hypothesis Testing Example
Test the claim that the true mean # of TV
sets in US homes is equal to 3.
(Assume σ = 0.8)
■ State the appropriate null and alternative
hypotheses
■ H : μ = 3 , H : μ ≠ 3 (This is a two tailed test)
0 1
■ Specify the desired level of significance
■ Suppose that α = .05 is chosen for this test
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-32
Hypothesis Testing Example
(continued)
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-33
Hypothesis Testing Example
(continued)
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Hypothesis Testing Example
(continued)
■ Reach a decision and interpret the result
α = .05/2 α = .05/2
-z = -1.96 0 +z = +1.96
-2.0
Since z = -2.0 < -1.96, we reject the null hypothesis
and conclude that there is sufficient evidence that the
mean number of TVs in US homes is not equal to 3
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-35
Example: p-Value
■ Example: How likely is it to see a sample mean of
2.84 (or something further from the mean, in either
direction) if the true mean is μ = 3.0?
x = 2.84 is translated to
a z score of z = -2.0
α/2 = .025 α/2 = .025
.0228 .0228
p-value
= .0228 + .0228 = .0456 -1.96 0 1.96 Z
-2.0 2.0
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-36
Example: p-Value
(continued)
■ Compare the p-value with α
■ If p-value < α , reject H0
■ If p-value ≥ α , do not reject H0
σ Known σ Unknown
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-38
Tests of the Mean of a Normal
Population (σ Unknown)
(continued)
■ For a two-tailed test:
Consider the test
(Assume the population is normal,
and the population variance is
unknown)
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-39
Example: Two-Tail Test
(σ Unknown)
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Example Solution:
Two-Tail Test
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9.4
Tests of the Population Proportion
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Tests of the Population Proportion
(continued)
■ The sample proportion in the success category
is denoted by
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-43
Hypothesis Tests for Proportions
■ The sampling
distribution of is Hypothesis
approximately Tests for P
normal, so the test
statistic is a z
value: nP(1 – P) > 5 nP(1 – P) < 5
Not discussed
in this chapter
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-44
Example: Z Test for Proportion
A marketing company
claims that it receives 8%
responses from its
mailing. To test this
claim, a random sample
of 500 were surveyed
Check:
with 25 responses. Test
Our approximation for P is
at the α = .05 = 25/500 = .05
significance level.
nP(1 - P) = (500)(.05)(.95)
= 23.75 > 5 ✔
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-45
Z Test for Proportion: Solution
H0: P = .08 Test Statistic:
H1: P ≠ .08
α = .05
n = 500, = .05
Critical Values: ± 1.96 Decision:
Reject Reject Reject H0 at α = .05
Conclusion:
.025 .025
There is sufficient
-1.96 0 1.96 z evidence to reject the
-2.47 company’s claim of 8%
response rate.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-46
p-Value Solution
(continued)
Calculate the p-value and compare to α
(For a two sided test the p-value is always two sided)
Do not reject H0
Reject H0 Reject H0 p-value = .0136:
α/2 = .025 α/2 = .025
.0068 .0068
-1.96 0 1.96
Z = -2.47 Z = 2.47
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-47
9.5
Assessing the Power of a Test
■ Recall the possible hypothesis test outcomes:
Actual Situation
Decision H0 True H0 False
Key:
Outcome Do Not Correct Decision Type II Error
(Probability) Reject H0 (1 - α ) (β)
or
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-49
Type II Error Example
■ Type II error is the probability of failing
to reject a false H0
Suppose we fail to reject H0: μ ≥ 52
when in fact the true mean is μ* = 50
50 52
Reject Do not reject
H0: μ ≥ 52 H0 : μ ≥ 52
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-50
Type II Error Example
(continued)
50 52
Reject Do not reject
H0: μ ≥ 52 H0 : μ ≥ 52
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-51
Type II Error Example
(continued)
Here, β = P( x ≥ ) if μ* = 50
α β
50 52
Reject Do not reject
H0: μ ≥ 52 H0 : μ ≥ 52
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Calculating β
■ Suppose n = 64 , σ = 6 , and α = .05
(for H0 : μ ≥ 52)
So β = P( x ≥ 50.766 ) if μ* = 50
50 50.766 52
Reject Do not reject
H0: μ ≥ 52 H0 : μ ≥ 52
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-53
Calculating β
(continued)
Probability of
type II error:
α β = .1539
50 52
Reject Do not reject
H0: μ ≥ 52 H0 : μ ≥ 52
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-54
Power of the Test Example
If the true mean is μ* = 50,
■ The probability of Type II Error = β = 0.1539
■ The power of the test = 1 – β = 1 – 0.1539 = 0.8461
Actual Situation
Decision H0 True H0 False
Key:
Outcome Do Not Correct Decision Type II Error
(Probability) Reject H0 1 - α = 0.95 β = 0.1539
(The value of β and the power will be different for each μ*)
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-55
9.6
Tests of the Variance of a
Normal Distribution
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chap 11-56
Tests of the Variance of a
Normal Distribution
(continued)
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chap 11-57
Decision Rules: Variance
Population variance
Lower-tail test: Upper-tail test: Two-tail test:
H 0: σ 2 ≥ σ 02 H 0: σ 2 ≤ σ 02 H 0: σ 2 = σ 02
H 1: σ 2 < σ 02 H 1: σ 2 > σ 02 H 1: σ 2 ≠ σ 02
α α α/2 α/2
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Chap 11-58
Chapter Summary
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Appendix: Guidelines for Decision Rule
Figure 9.11
Guidelines for
Choosing the
Appropriate Decision
Rule for a Population
Mean
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Appendix: Guidelines for Decision Rule
Figure 9.12
Guidelines for
Choosing the
Appropriate Decision
Rule for a Population
Proportion
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Ch. 9-61
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