Hypothesis testing:

A research was conducted to examine the differences between Group A and Group B on perceived life
satisfaction. A pilot study was conducted to examine this hypothesis. Ten members from Group A and
ten members from B were given a life satisfaction test. Scores on the measure range from 0 to 60 with
high scores indicative of high life satisfaction, low scores indicative of low life satisfaction. The data are
presented below.

The data was as given below:

Group A Group B
45 34
38 22
52 27
48 27
25 37
39 41
51 24
46 38
55 26
46 36

The task:
i). Which group is more satisfied with life? Please perform relevant significance test (with all calculations
on excel) and conclude.
ii). What would be the null hypothesis in this study?
iii). What would be the alternate hypothesis?
iv). Is there a significant difference between the two groups? If Yes, then please justify with your
interpretation.
Step 1: Exploratory understanding of the data using different
statistics.
Statistics Group A Group B
Mean (X) 44.5 31.2
Variance (Var) 75.39 45.07
Standard Division (S) 8.68 6.71
Max Value (Ma) 55 41
Min Value (Mi) 25 22
Media Value (Me) 46 30.5
75th percentile 51.25 37.25
50th percentile 46 30.5
25th percentile 38.75 25.5

Inference based on the exploratory data analysis:

Based on the above statistics, while Group A has higher mean score and Standard Deviation on life
satisfaction ratings than Group B, is not clear if the difference is significant (given the small sample) and
how confidently can one conclude on these differences. Thus, need to test if Group A’s life satisfaction
score is significantly higher than group B at a confidence level of 95%.
The hypothesis:
Null Hypothesis : Both Group A and Group B are equally satisfied with life.
: Mean of the Life Satisfaction score of Group A and Group B is equal
: (Xa = Xb) i.e. Xa – Xb = 0 (where Xa and Xb are mean satisfaction score for
Group A and B respectively)

Alternative Hypothesis : Group A and Group B have different level of satisfaction with life.
: Mean of the Life Satisfaction score of Group A is greater than that of Group B
: (Xa!=Xb) i.e. Xa-Xb !=0 (where Xa and Xb are mean satisfaction score for Group
A and B respectively)

Preparing for Hypothesis testing:

To determine the above, we need to ascertain if Xa is equal to Xb in the situation where …
a) our sample size is <30 (which is suitable for small sample test – i.e. t-test)
b) the 2 groups – Group A and Group B are unrelated (which is suitable for Independent t-test)
c) both the groups have same sample size of 10 and (which is suitable for assuming Equal variance)
Thus, we can use “independent t-test with assumption of equal variance” to determine the
corresponding 1-tailed p-value.

Additionally, “Independent t-test using assumption of non-equal variance” too can be done. If the
outcome/ result between these t-tests with these two different assumptions are different, then, using
“Levene’s test for equality of variances”, we could ascertain which of the two assumption should we
consider. Levene’s test for equality of variance is done by default in SPSS allowing the user to use the
right set of results to consider.
Carrying out the hypothesis testing with assumption of equal
variance:
The T value calculations with equal variance assumed
==========================================================
T value = (Xa-Xb)
( (Spooled Std Dev) X (Sq.Root ((1/n1) + (1/n2))) )

t- Value = (Xa-Xb)/ ( (Spooled Std Dev) X (Sq.Root ((1/n1) + (1/n2))) )

Xa = mean of Group A = 44.5
Xb = mean of Group B = 31.2
n1= Sample size of Group A = 10
n2= sample size of Group B = 10

Spooled Std. Dev = Sq. Root of (( ((n1-1)X(S1^2)) +((n2-1)X(S2^2)) )/( n1+n2-2))

S1= Std. dev of group A = 8.68
S2 = Std. dev of group B = 6.71
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The rough calculations:
1. Xa-Xb = 44.5 -31.2 = 13.3…………………………(A)
2. Spooled standard division:
n1-1 = 10-1=9; n2-1 = 10-1=9
S1^2 = 8.68^2= 75.39; S2^2 = 6.71^2 = 45.07
Thus, (((n1-1)X(S1^2)) +((n2-1)X(S2^2))) = ((9X75.39)+(9X45.07)) = 1084.14

n1+n2-2 = 10+10-2 = 18

thus, spooled std.dev = Sq. Root (1084/ 18) = sq. root (60.23)= 7.760798928….. (B)

Sq. Root ((1/n1) + (1/n2)) = S. Root ((1/10)+(1/10)) = 0.447213595….. (C)

Spooled Std. Dev is the product of B and C = 3.470734793………….. (D)

3. T-value = A/ D = 13.3/3.470734793 = 3.832

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Inference from hypothesis testing:

The above calculations give a t Value of 3.832
The degree of freedom in the above case will be : n1+n2-2 = 18

From the t-table the value of “t” at 95% confidence level for d.f = 18 is 2.101. The computed t-value of
3.8321 is well above the t-vale published in the t-table.
The probability (p-value) corresponding to the respective t-values of 2.101 for df=18 is “0.025 (Single
tailed)” and “0.05 (Two tailed)”
This means that the probability that our “Null Hypothesis Xa=Xb” has a less than “0.025” probability of
being true at 95 % confidence level. i.e. it has more than 97.5% probability of being false.

Thus we can reject the Null hypothesis and accept the alternate hypothesis that Xa != Xb. Since the value
of Xa > Xb, and the null hypothesis stands rejected even by the single tailed p-value (0.05) we can with
95% confidence that Xa > Xb. In other words Group A is more satisfied with life than Group B.

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Additionally:
From the t-table the value of “t” at 98.8% confidence level for d.f = 18 is 3.610 and at 99.9% confidence
the t-Value is 3.922. The computed t-value of 3.832 lies between these two values.
The probability (P) corresponding to the respective t-values 3.610 and 3.922 is as follows
- For the published t-value of 3.610 at d.f =18 it is “0.001 (single tailed)” and “0.002 (two tailed)”
- For the published t-value of 3.922 at d.f =18 it is “0.0005 (single tailed)” and “0.001 (2 tailed)”

This means that our Null hypothesis Xa=Xb has a less than “0.002” probability of being true at 98.8 %
confidence level. i.e. it has more than 99.998% probability of being false.

Thus we can thus reject the Null hypothesis and accept the alternate hypothesis which is “Xa != Xb”.
Since the value of Xa > Xb, and the null hypothesis stands rejected even by the single tailed p-value, we
can, with 98.8% confidence, say that Xa > Xb. In other words, Group A is more satisfied with life than
Group B.
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Carrying out the hypothesis testing with assumption of

unequal variance:
T value calculations where Equivariance is not assumed
============================================================
T Value = (Xa – Xb)/ ( Sq. Root ( (S1^2/n1) + (S2^2/n2) ) )
Degree of freedom in this case is calculated as below.
Df = ( (S1^2)/n1) + (S2^2)/n2) )^2 / ( (1/n1-1) X ((S1^2)/n1)^2) ) + ( (1/n1-1) X ((S1^2)/n1)^2) )

Df = ( (S1^2)/n1) + (S2^2)/n2) )^2

( (1/n1-1) X ((S1^2)/n1)^2) ) + ( (1/n1-1) X ((S1^2)/n1)^2) )

The above calculations too give a t-Value of 3.832112264 and a degree for freedom of 17.9273.
Inference from hypothesis testing:
From the t-table the value of “t” at 98.8% confidence level for d.f = 18 is 3.646 and at 99.9% confidence
the t-Value is 3.965. The computed t-value of 3.8321 lies between these two values.
The probability (P) corresponding to the respective t-values 3.656 and 3.965 is as follows
- For the published t-value of 3.646 at d.f =17 it is “0.001 (single tailed)” and “0.002 (two tailed)”
- For the published t-value of 3.965 at d.f =17 it is “0.0005 (single tailed)” and “0.001 (2 tailed)”

This means that our Null hypothesis Xa=Xb has a less than “0.002” probability of being true at 98.8 %
confidence level. i.e. it has more than 99.998% probability of being false.

Thus we can thus reject the Null hypothesis and accept the alternate hypothesis which is “Xa != Xb”.
Since the value of Xa > Xb, and the null hypothesis stands rejected even by the single tailed p-value, we
can, with 98.8% confidence, say that Xa > Xb. In other words, Group A is more satisfied with life than
Group B.