x, y sample mean (to be calculated from the sample statistic(s)

Hypothesis Testing Standard Error:

standard deviation μ0
σ, σx,y
population mean that should be tested with the Null Hypothesis H 0
standard deviation of the population
√sample size s, sx,y standard deviation calculated from the sample statistic(s)
How to: Statistical tables: Link sp pooled standard deviation for two independent samples
● Decide for the correct test statistic n, nx,y sample size of the statistic(s)
● Evaluate if the Null Hypothesis should Stats calculator for p-value: Link α confidence interval to be chosen for testing (most typical value is 5%)
be rejected t, z critical value derived from statistical table for certain confidence interval α
● Calculate the confidence intervals for the p p-value calculated from p-value calculator for applying statistic
sample statistics d mean of all differences between group x and y

For example cases see next page. Yes Population variance σ2 known No
and large sample size(s)?

Z-Statistic T-Statistic

How many populations? How many populations?

One Two One Two

Relation between samples?

Dependent Independent

2 (n x −1)s x 2+(n y −1)s y 2

Variance σ 2
σ ,σ 2
x
2
y s 2
s 2 s =
p
difference n x +n y −2

Test x−μ 0 ( x− y )−μ 0 x−μ 0 d −μ 0 (x − y )−μ 0

statistic Z= Z= 2 T= T= T= 2 2
σ /√n √σ x /n x + σ y 2 /n y s/ √ n sd / √ n √s p / nx + sp / ny

Reject H0 if │Test statistic (T, Z)│>│critical value (t, z)│ or p-value < confidence level α

Confidence σ 2x σ 2y sd s2p s 2p
Interval
Sample
x±z α σ
2 √n
( x− y)±z α
2 √ +
nx ny
x±t n−1 , α
2
s
√n
d ±t n−1 , α
2 √n
( x− y)±t n +n −2 , α
x y
2 √ +
nx n y

Example 1 2 3 4 5

Created by: Anne-Kathrin Meyer

Example 1 2 3 4 5

Single population, Independent samples, Single population, Multiple populations, Multiple populations,
Key unknown population dependent samples, independent samples,
known population known population unknown variances but assumed
features variance variances variance unknown variance to be equal

Testing if housing prices in

Testing if a students Berlin are the same as in
Testing the average Testing the average Testing the average
salary of all people salary of Data significantly improve Munich.
grades of students their grades when
working in the same from the same school Scientists in
taking a course. Two different samples
Summary company. but two different Germany.
classes. record housing prices in
Is it really as high as Is it above a certain Grades of the same either city. Variance for the
Does class A do students are
announced in the better than class B by value let’s say 50k€/ population is unknown but
compared before we assume it should be the
press (80k€)? 10% grade scores? year?
and after the course. same for both cities.

μ before = μ after μ Munich – μBerlin = 0

H0 μ0=80 k€ μ A - μ B ≤ 10% μ 0 ≤ 50k€
D0= μ before -μ after = 0

Ha μa≠80 k€ μ A - μ B > 10% μ 0 > 50k€ D0 ≠0 μ Munich – μBerlin ≠ 0

1) State the null and 1) State the null and 1) State the null and 1) State the null and 1) State the null and
alternative alternative alternative alternative hypotheses alternative hypotheses
hypotheses hypotheses hypotheses 2) Choose α 2) Choose α
2) Choose α 3) For each person
2) Choose α 2) Choose α calculate the 3) Calculate the pooled
3) Calculate Z from 3) Calculate Z from 3) Calculate T from difference in grade variance and the Test
the sample the sample statistic the sample before and after statistic T using the
statistic. using the means of statistic. taking the course. pooled variance
4) Calculate the p- each sample and 4) Calculate the p- Calculate the mean d, 4) Calculate the p-Value for
value using Z with the known variance value using T with standard deviation sd
Test and the test statistic T
nx+ny-2 degrees of
a stats calculator for this class. a stats calculator freedom and compare to
Procedure and compare to 4) Calculate the p- and compare to using these values.
4) Calculate the p-value chosen significance level
chosen significance value using Z with chosen significance using T with a stats α.
level α. a stats calculator level α. calculator and
and compare to α. 5) Reject H0 if p<α
5) Reject H0 if p < α 5) Reject H0 if p < α compare to chosen
5) Reject H0 if p < α significance level α. 6) Interpret the decision
6) Interpret the 6) Interpret the within the context of the
6) Interpret the decision within the 5) Reject H0 if p < α
decision within the 6) Interpret the decision problem.
context of the decision within the context of the within the context of
problem. context of the problem. the problem.
problem.

Created by: Anne-Kathrin Meyer