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Chapter 10 Slides PT 1

This document discusses one-sample hypothesis tests. It defines key terms like hypothesis, hypothesis testing, and the six step procedure. It distinguishes between one-tailed and two-tailed tests and discusses how to conduct tests of hypotheses about population means and proportions. The document provides examples of setting up null and alternative hypotheses for one-tailed and two-tailed tests. It also discusses choosing test statistics, critical values, and interpreting results.

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Noor Fatima
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0% found this document useful (0 votes)
15 views31 pages

Chapter 10 Slides PT 1

This document discusses one-sample hypothesis tests. It defines key terms like hypothesis, hypothesis testing, and the six step procedure. It distinguishes between one-tailed and two-tailed tests and discusses how to conduct tests of hypotheses about population means and proportions. The document provides examples of setting up null and alternative hypotheses for one-tailed and two-tailed tests. It also discusses choosing test statistics, critical values, and interpreting results.

Uploaded by

Noor Fatima
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 31

One-Sample Tests of Hypothesis

Chapter 10

McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
GOALS

1. Define a hypothesis and hypothesis testing.


2. Describe the six step hypothesis testing procedure.
3. Distinguish between a one-tailed and a two-tailed
test of hypothesis.
4. Conduct a test of hypothesis about a population
mean.
5. Conduct a test of hypothesis about a population
proportion.

10-2
Hypothesis and Hypothesis Testing

HYPOTHESIS:

A statement about the value of a population parameter developed for


the purpose of testing.

HYPOTHESIS TESTING:

A procedure based on sample evidence and probability theory to


determine whether the hypothesis is a reasonable statement.

10-3
 STEP 6: Interpret Result of Hypothesis Testing

TEST STATISTIC:
A value, determined from sample information, used to determine whether
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.

10-4
Important Things to Remember about H0 and H1

Inequality Part
 H0: null hypothesis and Keywords
Symbol of:

Larger (or more) > H1


 H1: alternate hypothesis than
Smaller (or less) < H1

 H0 and H1 are mutually No more than  H0

exclusive and collectively At least ≥ H0


exhaustive Has increased > H1
Is there difference? ≠ H1
 H0 is always presumed to be Has not changed = H0
true Has “improved”, “is See left H1
better than”. “is text
more effective”

10-5
H1 has the burden of proof
Null and Alternate Hypothesis
 A random sample (n) is used to “reject H0”

 If we conclude 'do not reject H0', this does not necessarily mean that
the null hypothesis is true, it only suggests that there is not
sufficient evidence to reject H0; rejecting the null hypothesis then,
suggests that the alternative hypothesis may be true.

 Equality is always part of H0 (e.g. “=” , “≥” , “≤”).

 “≠” “<” and “>” always part of H1

10-6
 In actual practice, the status quo is set up as
H0

 If the claim is “boastful” the claim is set up as


H1 (we apply the Missouri rule – “show me”).
Remember, H1 has the burden of proof

 In problem solving, look for key words and


convert them into symbols. Some key words
include: “improved, better than, as effective as,
10-7
different from, has changed, etc.”
Two Tail Test: Null and Alternate Hypothesis

10-8
One-Tail Test: Null and Alternate
Hypothesis

 EXAMPLE 3:
– According to the Census Bureau, 3.13 people reside in the typical
American household. A sample of 25 households in Arizona
retirement communities showed the mean number of residents per
household was 2.86 residents. The standard deviation of this sample
was 1.20 residents. AT the 0.01 significance level, is it reasonable to
conclude the mean number of residents in the retirement community
household is less than 3.13 persons?

10-10
One-Tail Test: Null and Alternate
Hypothesis

10-11
One-Tail Test: Null and Alternate
Hypothesis

10-12
One-Tail vs. Two Tail Test
 Formulation of the null and alternate hypothesis
differ for a one-tail and two tail test

 Determining the critical value for a one-tail test and


two-tail test.
– Critical values for a one-tailed test
are different from a two-tailed test
at the same significance level.

10-13
Level of Significance,

 The probability of rejecting the null hypothesis


when it is true.

 Also called the level of risk.

 Traditionally, is either 0.1, 0.05 or 0.01.

 Quality Assurance studies will use a lower level


of risk (=0.01).
10-14
Type I Error () and Type II error (β)

Researcher

Does Not Reject Rejects

is true Correct Decision Type I error (

is false Type II error (β) Correct Decision

10-15
Test Statistic
Using Z-distribution vs. t-distribution

 Population Standard Deviation Known:


– Use

 Population Standard Deviation Unknown:


– Use

 WHERE

10-16
 STEP 6: Interpret Results of Hypothesis

10-17
Test Statistic and Critical Value
 TEST STATISTIC:
• A value, determined from sample information, used to determine whether to
reject the null hypothesis.

• Depends upon whether population standard deviation is known or not

CRITICAL VALUE:
• The dividing point between the region where the null hypothesis is rejected and the
region where it is not rejected.

• Critical Value Depends upon:


• Test Statistic Used (i.e. Population Standard Deviation is Known or Not)

• Level of Significance.

• Whether we have a one-tail or two-tail test and whether population standard


deviation is known.
10-18
Summary:
Hypothesis Setups for Testing a Mean ()

MEAN

10-19
Testing for a Population Mean with a
Known Population Standard Deviation- Example

Jamestown Steel Company manufactures and


assembles desks and other office equipment . Step 4: Formulate the decision rule.
The weekly production of the Model A325 desk Reject H0 if |Z| > Z/2
at the Plant follows the normal probability
distribution with a mean of 200 and a Z  Z / 2
standard deviation of 16. Recently, new X 
production methods have been introduced and  Z / 2
new employees hired. At the 1% level of / n
significance, the Vice President of 203.5  200
manufacturing would like to investigate  Z .01/ 2
16 / 50
whether there has been a change in the
weekly production of the Model A325 desk. 1.55 is not  2.58
The number of desks produced last year for
50 weeks, is 203.5.

σ=16; n=50; α=.01; sample mean= 203.5


Step 1: State the null hypothesis and the alternate
hypothesis.
H0:  = 200 Step 5: Make a decision and interpret the result.
H1:  ≠ 200 Because 1.55 does not fall in the rejection region, H0 is not
rejected. We conclude that the population mean is not
Step 2: Select the level of significance. different from 200. So we would report to the vice
president of manufacturing that the sample evidence
α = 0.01 as stated in the problem
does not show that the production rate at the plant has

Step 3: Select the test statistic. changed from 200 per week.

10-20 Use Z-distribution since σ is known


10-21
One-Tailed Test

Suppose in the previous problem the vice


president wants to know whether there has Step 4: Formulate the decision rule.
been an increase in the number of units Reject H0 if Z > Z
assembled. To put it another way, can we
conclude, because of the improved production
Step 5: Make a decision and interpret the result.
methods, that the mean number of desks
Because 1.55 does not fall in the rejection region,
assembled in the last 50 weeks was more than
H0 is not rejected. We conclude that the average
200? number of desks assembled in the last 50 weeks is
not more than 200
Recall: σ=16, n=50, α=.01; sample mean= 203.5

Step 1: State the null hypothesis and the


alternate hypothesis.
H0:  ≤ 200
H1:  > 200
(note: keyword in the problem “an increase”)

Step 2: Select the level of significance.


α = 0.01 as stated in the problem

Step 3: Select the test statistic.


10-22
p-value in Hypothesis Testing

EAMPLE p-Value
 p-VALUE: is the probability of Recall the last problem where the hypothesis and
observing a sample value as extreme decision rules were set up as:
H0:  ≤ 200
as, or more extreme than, the value
H1:  > 200
observed, given that the null
Reject H0 if Z > Z
hypothesis is true. where Z = 1.55 and Z =2.33

Reject H0 if p-value < 


 In testing a hypothesis, we can also 0.0606 is not < 0.01
compare the p-value to the
significance level ().

 Decision rule using the p-value:

– Reject H0 if p-value < 

Conclude: Fail to reject H0

10-23
Testing for the Population Mean:
Population Standard Deviation Unknown

When the population standard deviation EXAMPLE


(σ) is unknown, the sample standard The NIB Insurance Company Claims Department
reports the mean cost to process a claim is
deviation (s) is used in its place the t- $60. An industry comparison showed this
distribution is used as test statistic, amount to be larger than most other insurance
which is computed using the formula: companies, so the company instituted cost-
cutting measures. To evaluate the effect of the
cost-cutting measures, the Supervisor of the
Claims Department selected a random sample
of 26 claims processed last month. The sample
information is reported below.
At the .01 significance level is it reasonable a claim
is now less than $60?

10-24
Testing for the Population Mean: Population
Standard Deviation Unknown - Example

Step 1: State the null hypothesis and the


alternate hypothesis.
H0:  ≥ $60
H1:  < $60

Step 2: Select the level of significance.


α = 0.01 as stated in the problem

Step 3: Select the test statistic.


Use t-distribution since σ is unknown

Step 4: Formulate the decision rule.


Reject H0 if t < -t,n-1

Step 5: Make a decision and interpret the result.


Because -1.818 does not fall in the rejection region,
H0 is not rejected at the .01 significance level.
We have not demonstrated that the cost-cutting
measures reduced the mean cost per claim to
less than $60. The difference of $3.58 ($56.42 -
$60) between the sample mean and the
population mean could be due to sampling
error.
10-25
10-26
10-27
Tests Concerning Proportion using
the z-Distribution
 A Proportion is the fraction or percentage that indicates the part of the population or sample
having a particular trait of interest.
 The sample proportion is denoted by p and is found by x/n
 It is assumed that the binomial assumptions discussed in Chapter 6 are met:
(1) the sample data collected are the result of counts;
(2) the outcome of an experiment is classified into one of two mutually exclusive categories—a
“success” or a “failure”;
(3) the probability of a success is the same for each trial; and (4) the trials are independent
 Both n and n(1-  ) are at least 5.
 When the above conditions are met, the normal distribution can be used as an approximation to the
binomial distribution
 The test statistic is computed as follows:

10-28
10-29
Hypothesis Setup for Testing a
Proportion ()

10-30
Test Statistic for Testing a Single
Population Proportion - Example
EXAMPLE
Suppose prior elections in a certain state indicated it
Step 4: Formulate the decision rule.
is necessary for a candidate for governor to
receive at least 80 percent of the vote in the Reject H0 if Z < -Z
northern section of the state to be elected. The
current governor is interested in assessing his
chances of returning to office and plans to
conduct a survey of 2,000 registered voters in
the northern section of the state. The survey
revealed that 1,550 planned to vote for the
present governor. Using the hypothesis-testing
procedure, assess the governor’s chances of
reelection.
Step 1: State the null hypothesis and the
alternate hypothesis.
H0:  ≥ .80
H1:  < .80
(note: keyword in the problem “at least”)

Step 2: Select the level of significance. Step 5: Make a decision and interpret the result.
α = 0.01 as stated in the problem The computed value of z (-2.80) is in the rejection region, so
the null hypothesis is rejected at the .05 level. The
Step 3: Select the test statistic. evidence at this point does not support the claim that the
Use Z-distribution since the incumbent governor will return to the governor’s mansion
assumptions are met and n and n(1-) ≥ 5 for another four years.
10-31
Type II Error
 Type I Error, the level of significance, denoted by the
Greek letter “”, is defined as the probability of
rejecting the null hypothesis when it is actually true.

 Type II Error, denoted by the Greek letter “β”,is


defined as the probability of “accepting” the null
hypothesis when it is actually false.

10-32

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