• The procedure to test the

statement about the population

parameter on the basis of sample
information

• The purpose is to determine

whether there is enough statistical
evidence in favour of a certain
belief about a parameter.
 P(don’t reject H0|H0 is false)

H0 is true H0 is false
Type II
Accept H0 Correct
error
decision
P(Type II error)=b

Type I
error Correct
Reject H0
decision
P(Type I error) = a

P(reject H0|H0 is true)

Sample size is greater than 30

σ σ
Known Unknown
Large
Z
sample Z

Z T
Small
sample

Sample size is less or equal 30

(Right) one-tail test H 0 :   0
H a :   0
Rejection region : z  za
a Critical value : za
Significan ce level : a
0 za If a  0.05, za  1.645

(Left) one-tail test

H 0 :   0
H a :   0
Rejection region : z   za
Critical value : - za
a
Significan ce level : a

-za 0

Two-tail test H 0 :   0
H a :   0
Rejection region : z   za or z  za
2 2

Critical values :  za and za

a a 2 2

2 2 Significan ce level : a
If a  0.05, za  1.96
-za/2 0 za/2
2
Z criticals for Hypothesis Testing

a Ha : < Ha : > Ha : ≠

0.10 -1.28 1.28 ±1.645

0.05 -1.645 1.645 ±1.96

0.01 -2.33 2.33 ±2.575

The alternative hypothesis is the more important one.
It represents what we are investigating.
 Step 1

Step 2

Type I error
P(reject H0|H0 is true)= a  1%

Step 3

203.5  200
z  1.547
16 50
Z criticals for Hypothesis Testing

a Ha : < Ha : > Ha : ≠

0.10 -1.28 1.28 ±1.645

0.05 -1.645 1.645 ±1.96

0.01 -2.33 2.33 ±2.575

 2.576 Critical Value 2.576

𝟏. 𝟓𝟒𝟕 Computed Value of Z

Step 4
The decision rule is:
if the computed value of z is not between −2.576 and 2.576, reject the null hypothesis.
If z falls between −2.576 and 2.576, do not reject the null hypothesis.

Conclusion: Step 5

Because 1.547 is between −2.576 and 2.576, we decide not to reject H0.
 α α
=0.005 =0.005
2 2

2.576 2.576

𝟏. 𝟓𝟒𝟕 Computed Value of Z

We did not reject the null hypothesis,

so we have failed to show that the population mean has changed from
200 per week.
To put it another way, the difference between the population mean of 200 per week
and the sample mean of 203.5 could simply be due to chance.
What should we tell the owner of the company?
The sample information fails to indicate that the new production methods resulted
in a change in the 200-desks-per-week production rate.
 0.4950 0.4950

α α
=0.005 =0.005
2 2

2.576 2.576

±𝟏. 𝟓𝟓 Computed Value of Z

 0.0606 0.0606

−1.55 +1.55

Two Tailed P-Value is 2(0.0606)=0.1212

One Tailed P-Value is = 0.0606

To compute the p-value, we need to be concerned with

the region less than −1.55 as well as the values greater
than 1.55 (because the rejection region is in both tails).
Solution:
H0 :  ≤ 15 Step 1

H1 :  > 15

P(Type I error)=P(reject H0|H0 is true)

a  5%
a  5% and Two-tail test Step 2

Sample mean X is 23. sample size is small n  12

Population Standard deviation  is unknown so we use its unbiased point
estimate s  9.835
The test statistic used here is its student’s T Test.

x  23  15
T    2.818 Step 3 & 5
s n 9.835 12
Since the (population) is normal
distributed with unknown variance, its Small sample size
sample mean is t-distributed when n ≤ 30
 Acceptance Region Rejection Region
α =0.05

2.818 Computed Value of T

Step 4

Critical region: T > 1.796 1.796 Critical Value

We will reject H0 if T > 1.796

Step 6

Conclusion: since 2.818 > 1.796, so we Reject H0

 Rejection
Acceptance Region Region
α =0.05

P-Value
0.008

2.818 Computed Value of T

Step 6 1.796 Critical Value

The p-value of .008 is the yellow shaded area and the significance level is the total
Red and yellow shaded area.

Because the p-value of .008 is less than significance level of .05, the Ho is rejected.