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Chapter 10 (Edited)
Chapter 10 (Edited)
One Sample:
Tests of Hypothesis
Week 4-1
Introduction
Week 4-2
Step 1: State the null and alternative
hypothesis
Week 4-3
Step 1 (Continue)
Week 4-4
Week 4-5
Step 2: State the significance level
Week 4-6
Step 2 (Continue)
Type II Error
Fail to reject a false null hypothesis, Ho
This error is not exist in hypothesis testing.
The probability of Type II Error is β
Week 4-8
Step 2 (Continue)
Actual Situation
Decision H0 True H0 False
Do Not
No error Type II Error
Key: Reject
(1 - ) (β)
Outcome H0
(Probability) Reject Type I Error No Error
H0 ( ) (1-β)
Week 4-9
Step 3
State the decision rule for hypothesis testing
Week 4-11
Step 3 (Continue)
Level of significance = Represents
Critical Value
H0: μ = 3 / /
2 2 Rejection
H1: μ ≠ 3 Two-tail test 0 Region is
shaded
H0: μ ≤ 3
H1: μ > 3 Upper-tail test 0
*Different level of
H0: μ ≥ 3 significance
will have different
decision rule (the
H1: μ < 3 rejection region).
Lower-tail test 0
Week 4-12
Step 4: Find the critical value
H 0: μ = 3
Two-Tailed Test H1 : μ ≠ 3
/2 /2
There are two
cutoff values 3 X
(critical values),
Reject H0 Do not reject H0 Reject H0
defining the Z
-Z 0 +Z
regions of
rejection
Lower critical Upper critical
value value
Week 4-13
Step 4 (Continue)
H 0: μ = 3
Left-Tailed Test H1 : μ < 3
There are one
cutoff value 3 X
(critical value),
Reject H0 Do not reject H0
defining the Z
-Z 0
regions of
rejection
Lower critical
value
Week 4-14
Step 4 (Continue)
H 0: μ = 3
Right-Tailed Test H1 : μ > 3
There are one
cutoff value 3 X
(critical value),
Do not reject H0 Reject H0
defining the Z
0 +Z
regions of
rejection
Upper critical
value
Week 4-15
Step 5
Compute test statistic value of hypothesis testing
Week 4-16
Step 5 (Continue)
Hypothesis Tests for the Population Mean
Hypothesis
Tests for
Known Unknown
and sample and sample
size is large size is small
( n 30) (n < 30)
use z
Week 4-17
Step 5 (Continue)
Convert sample statistic ( X ) to a Z test statistic
Hypothesis
Tests for
σ Known σ Unknown
σ Known σ Unknown
Week 4-20
Step 5 (Continue)
Week 4-22
Step 7: Making Conclusion
We have enough/sufficient evidence
to conclude that (the statement in H1)
at significance level (1% or 5% or 10%??).
OR
We have no enough/ insufficient evidence
to conclude that (the statement in H1)
at significance level (1% or 5% or 10%??).
Week 4-23
Review: 7 Steps in Hypothesis
Testing
Step 1: State the null and alternative hypothesis
Step 2: State the significance level.
Step 3: State the statement of decision rule to determine
the rejection region(s).
Step 4: Find the critical value of the test from the
statistical table.
Step 5: Determine the appropriate statistical technique
and the test statistic to use.
Step 6: Make the comparison between test statistics value
and critical value to make statistical decision.
Step 7: Making conclusion.
Week 4-24
1 Scenario…
st
σ is known…
WEEK2-25
Week 4-25
Hypothesis Testing Example
Test the claim that the true mean no. of TV
sets in Malaysia homes is equal to 3 and σ =
0.8. A random sample of 100 homes is
selected with the mean no. of TV sets equal
to 2.84
Step 1: State the appropriate null and alternative
hypotheses
H0: μ = 3 H1: μ ≠ 3 (This is a two tailed test)
if not given assume it for 0.05
Step 2: Specify the desired level of significance
Suppose that = 0.05 is chosen for this test
Week 4-26
Hypothesis Testing Example
(continued)
Step 3: Decision rules
Reject H0 if test statistic value is less than lower bound
critical value or more than upper bound critical value.
Otherwise, do not reject H0.
Week 4-27
Hypothesis Testing Example
(continued)
Step 6: Decision making
Since Z = -2.0 < -1.96, we reject the null hypothesis.
= 0.05/2 = 0.05/2
Week 4-28
Hypothesis Testing Example
(continued)
Step 7: Conclusion
There is sufficient evidence that the mean number of
TVs in Malaysia homes is not equal to 3.
Week 4-29
Additional Step…
WEEK2-30
Week 4-30
Additional Step: P-Value Approach
Week 4-31
Continued Example…
Step 1: State the appropriate null and alternative
hypotheses
H0: μ = 3 H1: μ ≠ 3 (This is a two tailed test)
Week 4-32
Continued Example…
Step 5: Compute the test statistic
X μ 2.84 3 .16
Z 2.0
σ 0.8 .08
n 100
Step 5: Find the p-value by Z-score
From the z-table, p-value = 0.02275 when z-value = -2.0
P-value = 0.02275 X 2 = 0.0455 (2-tails test)
Step 7: Conclusion
There is sufficient evidence that the mean number of TVs in Malaysia
homes is not equal to 3.
Week 4-33
2nd
Scenario…
σ is Unknown…
n is large…
WEEK2-34
Week 4-34
Hypothesis Testing Example
A phone industry manager thinks that customer monthly
cell phone bill have increased, and now average over
RM52 per month. The company wishes to test this claim
by using a random sample of 64 customer monthly bill
with mean equal to 53.1 and standard deviation of 10.
Week 4-35
Example: Find Rejection Region
(continued)
Suppose that = 0.10 is chosen for this test
=0.10
Xμ 53.1 52
Z 0.88
s 10
n 64
Week 4-37
Example: Decision
(continued)
Reach a decision and interpret the result:
Reject H0
= 0.10
Reject H0
P(X 53.1)
= 0.10
53.1 52.0
P Z
0 10/ 64
Do not reject H0 Reject H0
1.28 P(Z 0.88) 1 0.8106
Z = 0.88 0.1894
σ is Unknown…
n is small…
WEEK2-40
Week 4-40
Hypothesis Testing Example
Week 4-41
Hypothesis Testing Example
H0: μ = 168
H1: μ ≠ 168 /2=0.025 /2=0.025
= 0.05
n = 25 Reject H0 Do not reject H0 Reject H0
-t n-1,α/2 0
t n-1,α/2
Critical Value: t24 = ±2.0639
-2.0639 2.0639
1.46
is unknown, so X μ 172.50 168
use a t statistic t n 1 1.46
S 15.40
n 25
Reject H0 if t-test is less than
lower bound critical value or
more than upper bound Do not reject H0. There is not sufficient evidence
critical value. Otherwise, do that true mean cost is different than $168
not reject H0.
Week 4-42
Solution: P-value and Confidence Intervals
166.14 ≤ μ ≤ 178.86
Population Proportion…
WEEK2-44
Week 4-44
Example: Z Test for Proportion
A marketing company
claims that it receives 8%
responses from its
mailing. To test this
claim, a random sample of
500 were surveyed with
Check:
25 responses. Test at the
= 0.05 significance n p = (500)(0.08) = 40
level. n(1-p) = (500)(0.92) = 460
Week 4-45
Z Test for Proportion: Solution
Test Statistic:
H0: p = 0.08
ps p 0.05 0.08
H1: p ≠ 0.08 Z 2.47
p(1 p) 0.08(1 0.08)
α = 0.05
n 500
n = 500, ps = 0.05
ps=sample proportion (X/N)
Critical Values: ± 1.96 25/500 Decision:
Reject Reject Reject H0 at = 0.05
Conclusion:
0.025 0.025
There is sufficient
-1.96 0 1.96 z evidence to reject the
-2.47 company’s claim of 8%
response rate.
Week 4-46
P-Value Solution
(continued)
Calculate the p-value and compare to
(For a two sided test the p-value is always two sided)
Do not reject H0
Reject H0 Reject H0 p-value = 0.0136:
/2 = 0.025 /2 =0.025
P(Z 2.47) P(Z 2.47)
0.0068 0.0068
2(.0068) 0.0136
-1.96 0 1.96
Z = -2.47 Z = 2.47
Week 4-47