..

·'
nff o, lffPOTR!SII 18 •7
~ E S T OF IIGNIPICANCB OP A IDAN- LAROI a.uu-LE· ·
Tho followina steps are takeo in ~tina the alaa18cance ora aawiiple·
mean in cnsc or larae sample (n>JO) : · . .
1. Null Hypotltt11J, R,. State tho nuJI hypothetia iq any or l.hc-
followiog forms : · ..
(I) µ•µ,,,,.~ .•. the population haa the tpeclfted meairvaliae, .
(ii) There is no 1i1nlficaot dlfrer-,nce btt•ten the aample meao (l)
and population mean (µ), I.e., the dlff'tre1Jce ia Just due to 8uctualion1 or:
61 mpJiog.
· (iii) The sample bu been drawn from the al•• latp popal~iot-
with mean (µo) and s.d. (c!).
2. Computation of Ttst Statistic. When sample i1 large under the
above bull bypothesis, tho test ltatiltic i1

z-V o•/n ~t'WN(O, 1)

where a==population standard deviation and n=sample size.
If the·population s.d. is not known, then its estimate provided by
A , - . 1I
,ample s.d,., !.~·, '1=s is used. 1

3. Level of Bigniftcance. The level ·of significance (2) which iudi--

,ates whether the probability. of differc~ce. is small or large is g~n~ .
~ed at 5% (Q;=O·OS). 9ther lev~s.of SJ~ficance such as 1%(ct•O·~l),
~%(a.=0~02), etc., may be used in apptopnate cases. Also the.,quesuon
tr_a two-tail test .or one-tail .te&fto be applied ia to be decided upo~.
e. 4. Critical '4/ue. The critical value of the test statistic Zllt-dll:
re-determined Jev"l of significance· is obtained by referrina to the ta~i ·
•Areas under the Normal curve-Z value'. . . :·.
TABLE OF NORMAL DISTRIBUTION
.·· .[Critical Value.s (Z.) o/Zl
Critical V,lues 1
'Level of Significance (a) . .r

(Li) .l% 2% 4% . S% ID°"·

Two-tailed test ;±2"516 ±2°326 ±2·0S4 :f:1"960 :±1"645
Right\tailed test +2~326 +2"054 +1"151 +1'645 +J·2C
Left-tailed test . ~- · 326 · - .2·054
0
-1"7Sf -1·645. ~ 1'282' .·
It may be noted thaJ the critical value of Z for a tiqlo-tailed tolt •
left or right) at level of significance·'a' is same aa•the critical valu~_of z.
or a two-tailed test at loveJ of significance 'lei' , · .
5
. . Decision. (i) H:l'the computed value of f.Z I leu than.~ , a
ltical value of Z, the compyted value of·Z falls in the-accep_~ceR&1~•
ence tbe nul_l hypothesis ·a f the pr~determined mcl of ll8~~n~ 11·
impted and It may reason~ be concluded that there .ii no ••amficallt,
• erence between tho sample mean and the population m'8Jl or ti.
vea IIIDple baa been clraa from parent popwation. :
 FtJNl)AMbl'H /U.-1 ....,& - - - - -- '-1 l J\ nsn
1
1 s·s al of Iz I ls , eatm- than the c,-itic J Cl!
(ii)~ mp:i: ~f faJls in the re' i.o regi~n.. 9~ll~
.of z, Ibo com uted e ernun eve o SJgni.ficaace 1s rejected th~
~nulf1iypo •• at t !!'acluded that thero is a s.igoificant difference anc1
it may roasonably be aod the popufatioo mean or tho sample has be.:
1w~ the ~pie ::-poanmt populauon. . llot
. ~D draWD "
lY!O'·
\

A company markets, car Their lives are n0

!!~~!!._doo, Ith a mean of 40,000 kilometr.ca and standa ~-
1Dal . dish'i~u;~tUometrea. A change in the proquction processr~
-d~t100 ° • io 8 better product. A test sample or 64 new ty 11
bebeffll to ~;It of 41 200 km Can you conclude, that there ia ~ei
1sas • moa;.,r/
1
enee bet;.,een th~ new product and current one. 0

· ~pUietnt •ereus steps for testing the hypothesis are outlined below •
The vano •
_ Null hypothtJis, 9 0, The mean life of tyres produced from old
·F.toeeSS1· IS· the hypothetical population mean, i.e.,
..
1'=40,000. ,
• Alltrnative hypothtsis, H, : µ=;a!:40,000
2. Computation of Test Statistic. Under Ho, since sample is large
~
Z=,,ra•fn ...,N(O, I)
-
41,200~40,000 ,_ 1200 · + 3.2 ,
z-: v{3000)•/64 ·;- 37S
3~ Le,el of Significance. a= 0-01
..
. ..-4! Critical value. At 0-0t ·Ievel of sjgnific&nce, the critical va1ue of
Z= :t:2'58 (Fro'm the Normal Area Tab1e). · · _
; _ 5. \ Decision. Since the c~mputed value of . I Z l ..=3.·2 is. greater
. -than critical valµe of 2 ~2·58. - it ;falls in the ·rejecti~n .region.. Hence the
·11ull hypothesis at 0•01 level of significane is rejected and it is concluded
.( . 1kat there is nificant difference between .new and the current product.
--
: . .- E inple 1. A rando,n ~afl'!ple o.l,400 flower stems has an qverage
. _J-,g ;r{ JO qp. Can. this be re~arded as~ -sa_mple from a large j,opula~
·.&m wit mean of 10'2 cm and a standard dev1at1on b 2•25 cm?
[Delhi Univ. B.A> Econ. ··nons.), 1982]
:sol-.don. Here n=400, X= 10.
. ·· 1. · }full hypothesis, H0 •
_ .. .!~td-J.
· The sample has been drawn from the
pop~Iation with mean. µ= 10'2 ·cm~
and s d. ,." . 2.25 cm., i.e.,

l\ _. · A.{ternative Hypothesis, H1 : µ.,' 10·2 (Two-tailed).

I

. _, ,.- 2. , Computation of Test.Statistic. Under H0 (since sample is Jar£e)

/
. . . .,, . " d-/J, , ._.

Z= .J";,•/:·. - N (0, 1)
10-]0'2 0·2 X 29
z ca V (2'2_S)2/400 ,' - , . 2·25 = - 1·777
 'I'ES'fOt' tt J!'V.lnllJ.LJ .
\, 1s·t ,
4. Crldcal wwe. Tho critical (table) ·
V
ce
agnmcance is =F 1~- ft1- of Z at o·os 1n,1 or . ,
:i
.. Since com(>uted valu. or I z J • 1•77 •
Zs= l ·96, it falla lD tho acceptance rep,n a-:..~ ·.
than oritlQll value or
with the null hypotheaia which ia M)COpt~ wlth°g 5t:e facts arocoualatent. '
concluded that the aample bu been drawn f %con8cleoce and it •
with mean of 10·2 cm. and a 1tandard de-t-d romr tho normal populatloll
_ TNK1on o 2·25 cm
d ~ ~•. 2. TIN mean llf• time of ,a l - .
es f;,
tubes prothlced by a company Lr comJ!!,llu 10 1H"'f/ 1 100Jluorelf:1nt l(,Ar
deviation of 120,h(IMl!S. TM company claims •tha - our, With a 1rsndort!
;· iuliis ,noduced by the company 1, J 600 """''
cance of o·os is the claim acceptabTi"·i
' u,, "'''°''
IIJ, of th,
• v,1n, th, ln,I of ngn(Ji..
--- [Delhi Univ. B.A. (Econ. HonJ.) 1917. I C W
Solution. Here n==l00, · .f=-1S70 an•d • · · 1 .A., June l911J
s==aamp o a d.•120 ,
1. N"1l Hypothesis, H0 : =1 600 ' '
produced is 1,600 hours. µ ' 'I.e., the aver~go life of the tubes.
Alternative Hypothesis, H1 : ~;cl ,600 (T•o-tailed teat)
2. Test Statistic. Under H0 , the test statistic is ·
z-
- ~
X-p, X - µ
s2/n [ A
·: rs=s for large samples .
. ]

. _/,,,Z=
1570-:-1600 30x l0 1
•• -v' (J2o)J/100 - - 120 =- 2•5
. 3. Le.ve/ of significan~~ -- -=O"Us· .
4. Critical ,alue. At o·os level ·of significance, the critical valuo-
of Z=±1·96 (From the table). ·
\ S. Decision. Since the C!'itical ~ah1e of I Z I =2·5 is grea_fer t~-
the critical v~lue of Z .= '. 196, 1t falls 1n the rejection region. Hence the
null hypothesis is rejected and it is concluded that the company's claim
of average life of the tubes produced being 1,600 hours is not acceptable. ·
EXERCISE 11·2
1. Xis a nor~ally-d1stributed random variable. · The variance_of. ·
« is a2 and is known. Construct a test criterion to test the hy~tb~, 1
.
that the mean of X is equal to µo (a given ·constant). Suppose a -. w~ ·
known,.suggest an unbiased estimator of a2 and give (state) the ~st. .
criterion to be used
. in this case. . · · . .· -
, 2 . ~sample of size 400 was drawo and ·the 8'ttlpte nicao · was'
found to be 99. : Test whether this ~mple ~ould have cofe from
~ormal population with mean 100 and variance . 64 a~ 5¼ lov~19111
1 r·
significance. Aas. (Z= -2·S] . [Mysore Univ. ~.A.,
. . .. . ht:
(b) A sample of 400 male students is found to have a mean
of 171·38 ems. Can it be reasonably regarded as a sampl~~d 'viatioll
1fJa~
papulafion with mean height 171'17 ems. ao d rral.canWA ·19801 iu!t
3·30 ems. [Ans. Z =1·27) ..,. • • ''
 1s·10 • ... ··- --~-~ -
--tfl 0 brand of automobile tyre Is known to avorage 10
! A•..- viadM of soo km, A random sample of 100 ,""".
1 'tm. ;with • 1ta nd1rd ~ed resulted fn tho average of 9,900 km~ A:Yr;t
.or tb11 brand, when t~bm evidence to conclude that tho quality
J 1ewl of ::r::a~i::oteristic, or this brand of tytes has alir,ped d~::,
: 'are your conclusions at 1% Jovel of sipiftcance 7 [An•. z ......_ 21
.. . 4 The woiaht of adults in a certain town ha, a mean of 130;
C
C 84
lbs. with 8 standard deviation of 4'64 Iba. A sample of 144. adubs livin
in tho slum district is round to have a mean '!ei~ht or 129 ~ ·lbs. Doe!
I
·tbis indicate that the residents of the slums s1gn1ficantly weigh less 011
the basis of 1% levtJ of significance ? How does you~ answer change'tr
sample of 81 adults Jiving in the slums would hive given the same mea:·
weight of 129"64 Jbs.? [Ans. (i) Z=-3·1_, (II) Z= _-2'32] ,
, sample of 400 male students is found to have a mean height'
of I71"38 ·;m. Can it be reasonably regarded as a sample from .a large
•population with mean height 171 · I7 cm. and standard · deviatioa
· .3'30 ems. [/.C.WwA,,.June 19~0]
[An•. Z=.l '27 <1·96. Not significant.]
6. A ce.rta_in machine part manufactured in millions.is.to withstand
a pressure of 100 units. The variability measured by statt~ard deviation
-on the basis of thousands of part.s was _found to be 20 units. A random
· sample or' size 400 was _taken and the result •Qf te~ting the machine Parts
showed that the average strength was 96·9 units. Test the hypothesis
that the machine patts have an average strength of 100 units. State clearly
:the statistical hypothesis with which· you- have started and·any basic
theorem -on sampling distribution that you hav~ used. ,·.:· .
[Ans. .Z=~3·J, ~o.]_ , _ . [Calcutta. Un;,_. M. Co,n., 1981]
. 7. The income distribution of _ ·:P~Pl!-l~tfoq ·...o~ . ~ ain a
• • • • • •-' .- , 'J . ., . J I • • •

-village ._ has a mean of ~s .. _6,000 . and a variance .of Rs~ . 32,400.

-Could a·:iain.~Je of 64 persons with _a .:mean in~me of ·Rs. -5,950 belong
iip this population ? (Test both at 5% and 1%level of significance_ . ·
_[Ans. ,Z=-2'221 [Delhi Univ. B.4.~ (&on. Hons.), 1988)-
8. A random sample of ·,ize .36 -was ·taken from a· universe of
'Size l,OOO_and it was found that th~ sample average was 20 with variance·
16,. . li,OW;".ViQ yoo examine that the average -in••the universe is 22? · ,
.(J#1. -z =-3) [Gauhati Uni,. B.A.'(Eton. Hons.), 1987]
. · · ·. ,. ,., ·A-random sample of 900 members-is tound to hl\VO . mean· of ·
• ..- • r • , ,...,,

a I

· 4'45 cm_s. Can it be ~onably regar~ed ~ - a· saJDple from a large

. . ·P9~:1J~a,ti~n wbose 1:11ean 11 5 ems and v~rian ce 1s 4 ems squared ?
:~:.·, : l~•· _Z==-8·25] · [C•.4., May 1984)
' .,· ~,: ·.1~;:· ·1h~ mean . I.Q. of sample of
1600- chil4ren was 99. Is it
.. likely.that this was a random sample from a population with mean I.Q. ·.
.; ,· JOO_. and stan~ard devJation 15 ? [1.C.W.A., Dec. J984)
y,. · .: ~· .. -C~•~Z•-2·67] . . . _
L·.: · ,-· I'¥ ~~a, lifefime-0f 100 olectric·bulbs produced by a manu•
1
·.factur1ng company is estimated to bo 1570 hours with a atandard dovia· •;
r!llir.
 flS1' Of

. ltU
tioa of 120 boars. lf,. u the moan lifeliUlt or -
by tho company• the hypotheaia l 600all tho bUlbt Produaed
.alternative hyp~thoa•! 11;61600 bot1r1, 111log I l~t fh~urt. q tl\Qst tho
[Aa, z--2S] l/.CW-,t O s,aaitloance oro-01.
12. A random sample of 200 tins ot O • • 1';":' 1983•J~ 1984}
0 ·l
,.eiabt .of 4'95 kp with • . 1tandat4 dev.lat1:~ i .u °at &ave aa aVtrqo
· thosia or net wel•a. ht o.r 5 kp per tio, at l nar 1· ' Do Wt acoopt tie
hypo
_ - . _ •31 -1.C ti, yv coat level?
(An•. Z=- 3
. .
- [ • .,,. .A•• Dtc. 1984; Bo,,,i, · ._ ·
t3. An educator claim, that average Q 0
Unt,. B.Com•• lffJ]
,tudenta is at moat l 10, and that ta a study raad; t or Anurioan cotteao
I
American college students, selected at rand,m ho iost th\s ota\m, JSO
u 1·2 with standard deviation of 1-2. Uie a'
Oi)I to test the clai m of the educator.
i:v
1 11 f averaJe l.Qi,or
e1 O siga,ftcance of
[ An•.Z- 2'04] [D 'hi u I .. .
e, vn v. B.A.. (Econ. Honi.)( 198$) .
14. A random sample of boots worn by 40 combat ldi . / · ·
desert_ region _showed an average life of t;o& years with•~ s~t•
dcviatton of O05 ~.:~rs. Un_:ler stnd1rd c1nditio,s the b~Jts are
t :.
k!o~a
to h_av~ an averag., _ltfe of l ·28 ~ea r.t1. h there reason to assert at a level
of s1gmficance of O05 that use 1n tne desert c1u1es the mean life or soc~
boots to decrease ? [Delhi Univ. B. ,4, (Econ. Hons.), 1984)
ns. Zaa -25"3] 1

1 E~T OF SIGNlFICANCE OF DIFFERENCE BETWEEN TWO..

MEANS (LARGE SAMPLE) /
It often happens that samples are from two different . sources and it
is required to.k~ow whether in their means there is a significant diffe-
rence. Also where the diff~rence is due to chance,. whether' th~ sample.
belong to the same population. ._ / ·,,,, .
To investigate such differences, the distribution 6f ditfer~ .
between sample means is used. / . . -,
/ . Pop~lation 1 · Population II
Population mean :
Population s.d. :
Sample mean : ~ •,
1'1 ·.'--,
Sample s.d. : ',sJ, • - :~

Sample size : n11 . . . .

· The following steps should b-, taken. 10 . testing· the

l (n;>30) · · , ot·
signi.ficance
the or
. difference between two means. ·1n ca-sc , , large samp e •· ·
·• • "Two

. 1~ Null hypothesis. The null hy~ot a~!1!t

h · to be set up is • .. ·
population" ~r "Tho two
samples have been drawn from the sd1m,ieot parent populations ~a~DI
samples have bee~ drawp _from twdod 'ations", f.e., . Ho : l-'1==J1tt · .
.the same mean and equal standar evi . · · . ed) · . ..
· · · · (T tail • ·
·2~ Aiternative Hypothesis. H1 : #11:Pf't wo-