Difference of Proportions

Procedure
Null hypothesis: 𝑯𝟎 : 𝑷𝟏 = 𝑷𝟐 (𝒐𝒓) 𝑷𝟏 ≤ 𝑷𝟐 (𝒐𝒓) 𝑷𝟏 ≥ 𝑷𝟐

Alternative hypothesis: 𝑯𝟏 : 𝑷 ≠ 𝑷𝟐 𝒐𝒓 𝑷𝟏 > 𝑷𝟐 𝒐𝒓 𝑷𝟏 < 𝑷𝟐

Level of significance: 𝜶 and 𝑍𝑡𝑎𝑏

𝑝1 − 𝑝2
Test Statistic: 𝑍𝑐𝑎𝑙 =
1 1
𝑃𝑄 +
𝑛1 𝑛2

𝑛1 𝑝1 + 𝑛2 𝑝2
𝑃=
𝑛1 +𝑛2

Conclusion: If 𝑍𝑐𝑎𝑙 < |𝑍𝛼 | then 𝐻0 is accepted 𝐻1 otherwise accepted

Example 1:
A manufacturer of the electric equipment subjects samples of two competing brands of
transistors to an accepted performance test. If 45 of 180 of 1st kind and 34 of 120 of 2nd
kind fail the test, what can he conclude at 5% level of significance about the difference
between the corresponding sample proportions.
Example 1:
A manufacturer of the electric equipment subjects samples of two completing brands of
transistors to an accepted performance test. If 45 of 180 of 1st kind and 34 of 120 of 2nd kind
fail the test, what can he conclude at 5% level of significance about the difference between
the corresponding sample proportions.
Solution:
45
1stkind: 𝑝1 = = 0.25
180
34
2nd kind: 𝑝2 = = 0.283
120
Here clearly, 𝑝1 ≠ 𝑝2

𝑛1 𝑝1 + 𝑛2 𝑝2 45 + 34
𝑃= = = 0.263
𝑛1 +𝑛2 180 + 120

𝑄 = 1 − 0.263 = 0.737
Null hypothesis: 𝑯𝟎 : 𝑃1 = 𝑃2 ( No difference in proportions )

Alternative hypothesis: 𝑯𝟏 : 𝑃1 ≠ 𝑃2 (there is difference)

Level of significance: 𝜶 = 𝟎. 𝟎𝟓 𝟓%
𝑍𝑡𝑎𝑏 =1.96

𝑝1 −𝑝2 0.25−0.283
Test Statistic: 𝑍𝑐𝑎𝑙 = 1 1
= = −0.647
1 1
𝑃𝑄 +
𝑛1 𝑛2
(0.263)(0.737) +
180 120

Conclusion: Here, 𝑍𝑐𝑎𝑙 < |𝑍𝑡𝑎𝑏 | (0.647<1.96)

∴ 𝐻0 is accepted

∴ There is no difference between proportions.

Example 2:
In a city A, 20% of a random sample of 900 school students had a certain slight physical
defect. In city B, 18.5% of a random sample of 1600 school students had same defect. Is
the difference between the proportion significant at 0.05 level of significance.
Example 2:
In a city A, 20% of a random sample of 900 school students had a certain slight physical
defect. In city B, 18.5% of a random sample of 1600 school students had same defect. Is the
difference between the proportion significant at 0.05 level of significance.

Solution:
1st kind: 𝑝1 = 0.2
2nd kind: 𝑝2 = 0.185
Here clearly, 𝑃1 ≠ 𝑃2

𝑛1 𝑝1 + 𝑛2 𝑝2
𝑃= = 0.1904
𝑛1 +𝑛2

𝑄 = 1 − 𝑃 = 0.8096
Null hypothesis: 𝐻0 : 𝑃1 = 𝑃2 (No difference in proportions)
Alternative hypothesis: 𝐻1 : 𝑃1 ≠ 𝑃2 (there is difference)
Level of significance: 𝛼 = 0.05 (5%)
𝑧𝑡𝑎𝑏 = 1.96

𝑝1 −𝑝2 0.2−0.185
Test statistic: 𝑍𝑐𝑎𝑙 = 1 1
= = 0.9169
1 1
𝑃𝑄 +
𝑛1 𝑛2
0.1904×0.8096 +
900 1600

Conclusion: Here, 𝑍𝑐𝑎𝑙 < 𝑍𝑡𝑎𝑏 (0.9169 < 1.96)

∴ 𝐻0 𝑖𝑠 𝑎𝑐𝑐𝑒𝑝𝑡𝑒𝑑

There is no difference in proportions.

Example 4:
A vote is to be taken among the residents of a town and the surrounding county to determine whether
a proposed chemical plant should be constructed. The construction site is within the town limits, and
for this reason many voters in the county believe that the proposal will pass because of the large
proportion of town voters who favor the construction. To determine if there is a significant difference
in the proportions of town voters and county voters favoring the proposal, a poll is taken. If 120 of
200 town voters favor the proposal and 240 of 500 county residents favor it, would you agree that
the proportion of town voters favoring the proposal is higher than the proportion of county voters?
Use an α = 0.05 level of significance.
Let 𝑃1 and 𝑃2 be the true proportions of voters in the town and county, respectively, favoring the
proposal.
Null hypothesis: 𝐻0 : 𝑃1 = 𝑃2 (No difference in proportions)
Alternative hypothesis: 𝐻1 : 𝑃1 > 𝑃2 (there is difference)
Level of significance: 𝛼 = 0.05 (5%)
𝑧𝑡𝑎𝑏 = 1.645 (right tail)

Decision: Reject 𝐻0 and agree that the proportion of town voters favoring the proposal is higher than
the proportion of county voters.
Example 5:
In a study on the fertility of married women conducted by Martin O’Connell and Carolyn C. Rogers
for the Census Bureau in 1979, two groups of childless wives aged 25 to 29 were selected at random,
and each was asked if she eventually planned to have a child. One group was selected from among
wives married less than two years and the other from among wives married five years. Suppose that
240 of the 300 wives married less than two years planned to have children some day compared to
288 of the 400 wives married five years. Can we conclude that the proportion of wives married less
than two years who planned to have children is significantly higher than the proportion of wives
married five years? Make use of a P -value.
Example 6:
An urban community would like to show that the incidence of breast cancer is higher in their area
than in a nearby rural area. (PCB levels were found to be higher in the soil of the urban community.)
If it is found that 20 of 200 adult women in the urban community have breast cancer and 10 of 150
adult women in the rural community have breast cancer, can we conclude at the 0.05 level of
significance that breast cancer is more prevalent in the urban community?
(Note: PCB: Polychlorinated Biphenyls)