9-1

Chapter Nine
One-Sample Tests of Hypothesis
GOALS
When you have completed this chapter, you will be able to:

ONE
Define a hypothesis and hypothesis testing.
TWO
Describe the five step hypothesis testing procedure.
THREE
Distinguish between a one-tailed and a two-tailed test of
hypothesis.
FOUR
Conduct a test of hypothesis about a population mean.
McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-2

Chapter Nine continued

One-Sample Tests of Hypothesis
GOALS
When you have completed this chapter, you will be able to:

FIVE
Conduct a test of hypothesis about a population proportion.
SIX
Define Type I and Type II errors.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-3

What is a Hypothesis?
A Hypothesis is a statement about the value of a
population parameter developed for the purpose of
testing.

Examples of hypotheses made about a population

parameter are:
The mean monthly income for systems analysts
is $3,625.
Twenty percent of all customers at Bovine’s
Chop House return for another meal within a
month.
McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-4

What is Hypothesis Testing?

Hypothesis testing is a procedure,

based on sample evidence and
probability theory, used to determine
whether the hypothesis is a
reasonable statement and should not
be rejected, or is unreasonable and
should be rejected.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-5

Hypothesis Testing

S tep 1 : S tate n u ll an d altern ate h yp oth es es

S tep 2 : S elec t a level of s ig n ific an c e

S tep 3 : Id en tify th e tes t s tatis tic

S tep 4 : F orm u late a d ec is ion ru le

S tep 5 : Tak e a s am p le, arrive at a d ec is ion

D o n ot rejec t n u ll R ejec t n u ll an d ac c ep t altern ate

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-6

Definitions

Null Hypothesis H0: A statement about the

value of a population parameter.

Alternative Hypothesis H1: A statement that is

accepted if the sample data provide evidence
that the null hypothesis is false.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-7

Definitions
Type I Error: Rejecting the null hypothesis when it
is actually true.

Level of Significance: The probability of

rejecting the null hypothesis when it is
actually true.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-8

Definitions
Type II Error: Accepting the null hypothesis
when it is actually false.

Test statistic: A value, determined from sample

information, used to determine whether or not to
reject the null hypothesis.
Critical value: The dividing point between the
region where the null hypothesis is rejected and
the region where it is not rejected.
McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-9

One-Tailed Tests of Significance

A test is one-tailed when the alternate hypothesis,

H1 , states a direction, such as:
H : The mean yearly commissions earned by
1
full-time realtors is more than $35,000.
(µ>$35,000)
H : The mean speed of trucks traveling on I-95
1
in Georgia is less than 60 miles per hour. (µ<60)
H : Less than 20 percent of the customers pay
1
cash for their gasoline purchase. (<.20)
McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-10
Sampling Distribution for the Statistic Z for a
r a l i t r b u i o n :  = 0 ,  = 1

One-Tailed Test, .05 Level of Significance

0 . 4

0 . 3

.95 probability
.05 region of
0 . 2
rejection
f ( x

0 . 1
Critical
Value
z=1.65
. 0

- 5

0 1 2 3 4

McGraw-Hill/Irwin
McGraw-Hill/ Irwin © Copyright ©2003, McGraw-Hill
The McGraw-Hill Companies,
Companies, Inc., All Rights
2003 All Reserved
Rights Reserved.
 9-11

Two-Tailed Tests of Significance

A test is two-tailed when no direction is specified in
the alternate hypothesis H1 , such as:
H : The mean amount spent by customers at
1
the Wal-Mart in Georgetown is not equal to
$25. (µ$25).

H : The mean price for a gallon of gasoline

1
is not equal to $1.54. (µ$1.54).

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-12
r a l i t r b u i o n :  = 0 ,  = 1

Sampling Distribution for the Statistic Z for a

Two-Tailed Test, .05 Level of Significance
0 . 4

.95 probability
0 . 3

2 .025 regions
of rejection
0 . 2
f ( x

0 . 1
Critical
Value
z=1.96
. 0

- 5

-4 -3 -2 -1 0 1 2 3 4

McGraw-Hill/ Irwin
McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-13

Testing for the Population Mean: Large

Sample, Population Standard Deviation
Known
When testing for the population mean from a large
sample and the population standard deviation is
known, the test statistic is given by:

X 
z
/ n

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-14

EXAMPLE 1
The processors of Fries’ Catsup indicate on the label that
the bottle contains 16 ounces of catsup. The standard
deviation of the process is 0.5 ounces. A sample of 36
bottles from last hour’s production revealed a mean
weight of 16.12 ounces per bottle. At the .05 significance
level is the process out of control? That is, can we
conclude that the mean amount per bottle is different
from 16 ounces?

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-15

EXAMPLE 1 continued

Step 1: State the null and the alternative hypotheses:

H0: μ = 16; H1:μ 16

Step 2: Select the level of significance. In this case

we selected the .05 significance level.

Step 3: Identify the test statistic. Because we know the

population standard deviation, the test statistic is z.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-16

EXAMPLE 1 continued

Step 4: State the decision rule:

Reject H0 if z > 1.96 or z < -1.96
Step 5: Compute the value of the test statistic and arrive
at a decision.

X   16.12  16.00
z   1.44
 n 0.5 36

Do not reject the null hypothesis. We cannot conclude the

mean is different from 16 ounces.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-17

p-Value in Hypothesis Testing

A p-Value is the probability, assuming that the null
hypothesis is true, of finding a value of the test statistic
at least as extreme as the computed value for the test.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-18

p-Value in Hypothesis Testing

If the p-Value is larger than the significance level,

H0 is not rejected.

If the p-Value is smaller than the significance

level, H0 is rejected.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-19

Computation of the p-Value

One-Tailed Test: p-Value = P{z  absolute value of the
computed test statistic value}
Two-Tailed Test: p-Value = 2P{z  absolute value of the
computed test statistic value}
From EXAMPLE 1, z = 1.44, and because it was a two-
tailed test, the p-Value = 2P{z  1.44} = 2(.5-.4251)
= .1498. Because .1498 > .05, do not reject H0.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-20

Testing for the Population Mean: Large

Sample, Population Standard Deviation
Unknown
Here σ is unknown, so we estimate it
with the sample standard deviation s.
As long as the sample size n ≥ 30, z
can be approximated with:
X 
z
s/ n
McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-21

EXAMPLE 2
Roder’s Discount Store chain issues its own credit card.
Lisa, the credit manager, wants to find out if the mean
monthly unpaid balance is more than $400. The level of
significance is set at .05. A random check of 172 unpaid
balances revealed the sample mean to be $407 and the
sample standard deviation to be $38. Should Lisa
conclude that the population mean is greater than $400,
or is it reasonable to assume that the difference of $7
($407-$400) is due to chance?

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-22

EXAMPLE 2 continued

Step 1: H0: µ ≤ $400, H1: µ > $400

Step 2: The significance level is .05

Step 3: Because the sample is large we can use the

z distribution as the test statistic.

Step 4: H0 is rejected if z>1.65

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-23

EXAMPLE 2 continued

Step 5: Perform the calculations and make a

decision.

X  $407  $400
z   2.42
s n $38 172

H0 is rejected. Lisa can conclude that the

mean unpaid balance is greater than
$400.
McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-24

Testing for a Population Mean: Small Sample,

Population Standard Deviation Unknown
The test statistic is the t distribution.
The test statistic for the one sample case
is given by:

X 
t
s/ n

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-25

Example 3

The current rate for producing 5 amp fuses at Neary

Electric Co. is 250 per hour. A new machine has been
purchased and installed that, according to the supplier,
will increase the production rate. A sample of 10
randomly selected hours from last month revealed the
mean hourly production on the new machine was 256
units, with a sample standard deviation of 6 per hour.
At the .05 significance level can Neary conclude that
the new machine is faster?

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-26

Example 3 continued

Step 1: State the null and the alternate

hypothesis.
H0: µ ≤ 250; H1: µ > 250
Step 2: Select the level of significance.
It is .05.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-27

Example 3 continued

Step 3: Find a test statistic. It is the t

distribution because the population
standard deviation is not known and the
sample size is less than 30.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-28

Example 3 continued
Step 4: State the decision rule. There are 10 –
1 = 9 degrees of freedom. The null hypothesis
is rejected if t > 1.833.
Step 5: Make a decision and interpret the
results.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-29

Example 3 continued

The null hypothesis is rejected. The mean

number produced is more than 250 per hour.

X  256  250
t   3.162
s n 6 10

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-30

Tests Concerning Proportion

A Proportion is the fraction or percentage

that indicates the part of the population or
sample having a particular trait of interest.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-31

Tests Concerning Proportion

The sample proportion is denoted by p and

is found by:

Number of successes in the sample

p
Number sampled

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-32

Test Statistic for Testing a Single

Population Proportion
p 
z
 (1   )
n

The sample proportion is p and π is the population

proportion.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-33

EXAMPLE 4

In the past, 15% of the mail order solicitations

for a certain charity resulted in a financial
contribution. A new solicitation letter that has
been drafted is sent to a sample of 200
people and 45 responded with a contribution.
At the .05 significance level can it be
concluded that the new letter is more
effective?

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-34

Example 4 continued

Step 1: State the null and the alternate

hypothesis.
H0: π ≤ .15 H1: π > .15

Step 2: Select the level of significance.

It is .05.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-35

Example 4 continued

Step 3: Find a test statistic.

The z distribution is the test statistic.

Step 4: State the decision rule. The null

hypothesis is rejected if z is greater than 1.65.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-36

Example 4 continued

Step 5: Make a decision and interpret the results.

45
 .15
p  200
z   2.97
 (1   ) .15(1  .15)
n 200

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.
 9-37

Example 4 continued

The null hypothesis is rejected. More than

15 percent are responding with a pledge.
The new letter is more effective.

McGraw-Hill/ Irwin © The McGraw-Hill Companies, Inc., 2003 All Rights Reserved.