MATH 2206

2023-2024 Spring

(STATISTICS II)
Week – 2
Instructors : Dr. Elanur Türküz
Class hours : Thursday - 13:30 am up to 16:20 pm
Email: elanur.turkuz@isikun.edu.tr
e.turkuz@iku.edu.tr
 Topics we cover this week
01 What is hypothesis testing?

02 One-tailed and two-tailed tests of significance

Testing for a population mean with a known population standard

03
deviation
Hypothesis Testing
 What’s a Hypothesis?

A statistical hypothesis is a statement

about the numerical value of a
population parameter.
 Null Hypothesis

The null hypothesis, denoted H0, represents the hypothesis that will be accepted
unless the data provide convincing evidence that it is false. This usually represents
some claim about the population parameter that the researcher wants to test.

Stated in one of the following forms:

H0: 𝜇 = 20
H0: 𝜇 ≤ 20
H0: 𝜇 ≥ 20
 Alternative Hypothesis

The alternative (research) hypothesis, denoted Ha, represents the hypothesis that will
be accepted only if the data provide convincing evidence of its truth. This usually
represents the values of a population parameter for which the researcher wants to
gather evidence to support.

Stated in one of the following forms:

Ha: 𝜇 ≠ 20
Ha: 𝜇 < 20
Ha: 𝜇 > 20
 Hypothesis Testing

One Sample Hypothesis Testing Week 2

Two Sample Hypothesis Testing Week 4

 Hypothesis Testing

One Sample Hypothesis Testing

One-Tail Test
Two-Tailed Test
 One-Tailed Test
A one-tailed test of hypothesis is one in which the alternative hypothesis is directional
and includes the symbol “ < ” or “ >.”

Upper-tailed (>): “greater than,” “larger,” “above”

Lower-tailed (<): “less than,” “smaller,” “below”
 Two-Tailed Test
A two-tailed test of hypothesis is one in which the alternative hypothesis does not
specify departure from H0 in a particular direction and is written with the symbol “ ≠.”

Some key words that help you identify this nondirectional nature are:
Two-tailed (≠): “not equal to,” “differs from”
Examples:
The population average amount of TV viewing 12 hours:
H0: 𝜇 = 12
Ha: 𝜇 ≠ 12
Is the average amount spent in the bookstore greater than $25?
H0: 𝜇 = 25
Ha: 𝜇 > 25
Students state that the mean waiting time in line @ Lavazza is less than 15 minutes:
H0: 𝜇 ≤ 15
Ha: 𝜇 > 15
The dean of the College of Business reported that the mean credit card debt for college
students is $3,000.
H0: 𝜇 = 3,000
Ha: 𝜇 ≠ 3,000
 One Sample Hypothesis Testing
The population average amount of TV viewing 12 hours:

H0: 𝜇 ≤ 3,000 ----- claim

Ha: 𝜇 > 3,000 ------ what we want to test

How can we decide when enough evidence exists to conclude that the statement given in
the hypothesis holds?

Since the hypothesis concerns the value of the population mean (𝜇) it is reasonable to
+ to make inferences.
use the same mean (𝑋)
 One Sample Hypothesis Testing
The population average amount of TV viewing 12 hours:

H0: 𝜇 ≤ 3,000 ----- claim

Ha: 𝜇 > 3,000 ------ what we want to test

How can we decide when enough evidence exists to conclude that the statement given in
the hypothesis holds?

Since the hypothesis concerns the value of the population mean (𝜇) it is reasonable to
+ to make inferences.
use the same mean (𝑋)
We will conclude that the hypothesis or the claim given in (H0) holds only when the
sample mean convincingly indicates that the population mean is 𝜇 ≤ 3,000.

“Convincing evidence” in favor of the alternative hypothesis will exist when the value of
𝑋+ exceeds 3,000 by an amount that cannot be attributed to sampling variability.

In order to test the hypothesis or the claim or the assumption made about the
population parameter we use a test statistic.

Test statistic: A numerical value calculated from the sample.

Basic Idea
Rejection Region
(One-Tail Test)
Rejection Region
(Two-Tailed Test)
 Test Statistic
When the standard deviation of the population (𝜃) is known we use:

The test statistic helps us decide between the null and alternative hypotheses. We are
either going to reject the null or the alternative hypothesis?

We need a decision rule!

 Decision Rule
Critical Value

Level of Significance
 Decision Rule
We formulate the decision rule by first determining the critical values of z.
The critical values are determined by the level of significance (𝜶).

The level of significance is designated α, the Greek letter alpha. Recognizing sampling
error, α is the probability of the risk a researcher decides to take of rejecting the null
hypothesis when, in fact, it is true.

The probability value α is a decision made prior to testing the hypothesis.

Decision Rule

In order to find the critical value for

z, we need to select 𝜶 first.

Common choices are;

𝛼 = 0.10
𝛼 = 0.05
𝛼 = 0.01
Decision Rule
In order to find the critical value for
z, we need to select 𝜶 first.

Common choices are;

𝛼 = 0.10
𝛼 = 0.05
𝛼 = 0.01

For example, the critical value that

corresponds to 𝛼 = 0.05 for a one-
tailed test is 𝑧 = 1.645.
Decision Rule
In order to find the critical value for
z, we need to select 𝜶 first.

Common choices are;

𝛼 = 0.10
𝛼 = 0.05
𝛼 = 0.01

For example, the critical value that

corresponds to 𝛼 = 0.05 for a two -
tailed test is 𝑧 = 1.96.
Decision Rule

How did we find 1.645 ?

We found it through the standard

normal distribution table.

Let’s use the board!

Areas under the Normal Curve

page 610
Decision Rule

How did we find 1.96 ?

We found it through the standard

normal distribution table.

Let’s use the board!

Areas under the Normal Curve

page 610
 Examples

One-Sample Hypothesis
Testing
Example 1
Jamestown Steel Company manufactures and assembles desks and other office
equipment at several plants in western New York State. The weekly production of the
Model A325 desk follows a normal probability distribution with a mean of 200 desks and
a standard deviation of 16 desks. Recently, new production methods have been
introduced and new employees hired. The vice president of manufacturing would like to
investigate whether there has been a change in the weekly production of the Model
A325 desk. Is the mean number of desks produced at the Fredonia Plant different from
200? The vice president decides to test the hypothesis using a .01 level of significance.
Show the results.
Example 2
A sample of 36 observations is selected from a normal population. The sample mean is
49, and the population standard deviation is 5. Conduct the following test of hypothesis
using the .05 significance level.
Example 3
A sample of 36 observations is selected from a normal population. The sample mean is
21, and the population standard deviation is 5. Conduct the following test of hypothesis
using the .05 significance level.
 Resources
Chapter 10 - Lind et al. (2021) Basic Statistics in Business and Economics

Chapter 7 - McClave, Benson and Sincich (2017) Statistics for Business

and Economics
End of Week 2