An Assignment on Hypothesis Submitted to

Prof. T. Mallikarjunappa
Department of Business Administration, Mangalore University.

Submitted By

Harish S N
Research Scholar, Department of Business Administration, Mangalore University

Date of submission:

Hypothesis Introduction, Hypothesis testing begins with an assumption; called a hypothesis that we make about population parameter. Then we collect sample data, produce sample statistics, and use this information to decide how likely it is that our hypothesised population parameter is corret. Say that we assume a certain value for a population mean. To test the validity of our assumption, we gather sample data determine the difference between the hypothesized value and the actual value of the sample mean. Then we judge whether the difference is significant. The smaller the difference, the greater the likelihood that our hypothesized value for the mean is correct. The larger the difference, the smaller the likelihood. The word hypothesis is derived from the Greek words hypo means under tithemi means place

A supposition or explanation (theory) that is provisionally accepted in order to interpret certain events or phenomena, and to provide guidance for further investigation. A hypothesis may be proven correct or wrong, and must be capable of refutation. If it remains unrequited by facts, it is said to be verified or corroborated. Hypothesis testing allows us to use a sample to decide between two statements made about a Population characteristic. Population Characteristics are things like The mean of a population or the proportion of the population who have a particular property. These two statements are called the Null Hypothesis and the Alternative Hypothesis.

Definitions of hypothesis Hypotheses are single tentative guesses, good hunches assumed for use in devising theory or planning experiments intended to be given a direct experimental test when possible. (Eric Rogers, 1966). Hypothesis is a formal statement that presents the expected relationship between an independent and dependent variable.(Creswell, 1994) An assumption or explanation about certain characteristics of a population. Making a tentative assumption about population parameter.

Nature of Hypothesis
The various discussions of the hypothesis which have appeared in works on inductive logic and in writings on scientific method, its structure and function have received considerable attention, while its origin has been comparatively neglected. The hypothesis has generally been treated as that part of scientific procedure which marks the stage where a definite plan or method is proposed for dealing with new or unexplained facts. It is regarded as an invention for the purpose of explaining the given, as a definite conjecture which is to be tested by an appeal to experience to see whether deductions made in accordance with it will be found true in fact. The function of the hypothesis is to unify, to furnish a method of dealing with things, and its structure must be suitable to this end. It must be so formed that it will be likely to prove valid, and writers have formulated various rules to be followed in the formation of hypotheses. These rules state the main requirements of a good hypothesis, and are intended to aid in a general way by pointing out certain limits within which it must fall. In respect to the origin of the hypothesis, writers have usually contented themselves with pointing out the kind of situations in which hypotheses are likely to appear. But after this has been done, after favourable external conditions have been given, the rest must be left to "genius," for hypotheses arise as "happy guesses," for which no rule or law can be given. In fact, the genius differs from the ordinary plodding mortal in just this ability to form fruitful. Hypotheses in the midst of the same facts which to other less gifted individuals remain only so many disconnected experiences. Hypothesis is to determine its nature a little more precisely through an investigation of its rather obscure origin, and to call attention to certain features of its function which have not generally been accorded their due significance.

The hypothesis is a clear statement of what is intended to be investigated. It should be specified before research is conducted and openly stated in reporting the results. This allows to: Identify the research objectives Identify the key abstract concepts involved in the research Identify its relationship to both the problem statement and the literature review A problem cannot be scientifically solved unless it is reduced to hypothesis form It is a powerful tool of advancement of knowledge, consistent with existing knowledge and conducive to further enquiry It can be tested verifiable or falsifiable

 Hypotheses are not moral or ethical questions It is neither too specific nor to general It is a prediction of consequences It is considered valuable even if proven false

Functions
Bringing clarity to the research problem Serves the following functions provides a study with focus signifies what specific aspects of a research problem is to investigate what data to be collected and what not to be collected enhancement of objectivity of the study formulate the theory enable to conclude with what is true or what is false

TESTING OF HYPOTHESISHypothesis testing refers to the process of using statistical analysis to determine if the observed differences between two or more samples are due to random chance or to true differences in the samples. Hypothesis testing is the process of using a variety of statistical tools to analyze data and, ultimately, to fail to reject or reject the null hypothesis. From a practical point of view, finding statistical evidence that the null hypothesis is false allows you to reject the null hypothesis and accept the alternate hypothesis. Hypothesis testing is the use of statistics to determine the probability that a given hypothesis is true. The usual process of hypothesis testing consists of four steps. Formulate the null hypothesis (commonly, that the observations are the result of pure chance) and the alternative hypothesis (commonly, that the observations show a real effect combined with a component of chance variation). Identify a test statistic that can be used to assess the truth of the null hypothesis. Compute the P-value, which is the probability that a test statistic at least as significant as the one observed would be obtained assuming that the null hypothesis were true.

Compare the -value to an acceptable significance value (sometimes called an alpha value). If, that the observed effect is statistically significant, the null hypothesis is ruled out, and the alternative hypothesis is valid

Types of Hypotheses.
NULL HYPOTHESES H0: The Null Hypothesis This is the hypothesis or claim that is initially assumed to be true. Designated by: H0 or HN Pronounced as H oh or H-null ALTERNATIVE HYPOTHESES HA: The Alternative Hypothesis This is the hypothesis or claim which we initially assume to be false but which we may decide to accept if there is sufficient evidence. Designated by: H1 or HA The null hypothesis represents a theory that has been put forward, either because it is believed to be true or because it is to be used as a basis for argument, but has not been proved. Has serious outcome if incorrect decision is made.

The alternative hypothesis is a statement of what a hypothesis test is set up to establish. Opposite of Null Hypothesis. Only reached if H0 is rejected. Frequently alternative is actual desired conclusion of the researcher!

This procedure is familiar to us already from the legal system: Innocent until proven guilty. The Null Hypothesis (Innocent) is only rejected in favour of the Alternative Hypothesis (Guilty) if there is sufficient evidence of this beyond reasonable doubt. So to summarise H0 is the status quo and HA is what we want to prove using the data we have collected.

H0 and HA take the following form: Null Hypothesis H0 : Population Characteristic = Hypothesised Value Alternative Hypothesis ~ three possibilities Upper tailed test: HA: Population Characteristic > Hypothesised Value Lower tailed test: HA: Population Characteristic < Hypothesised Value Two tailed test: HA: Population Characteristic Hypothesised Value NOTE: The same Hypothesised value must be used in the Alternative Hypothesis as in the Null Hypothesis EXAMPLE In a clinical trial of a new drug, the null hypothesis might be that the new drugis no better, on average, than the current drug. We would write H: there is no difference between the two drugs on average. The alternative hypothesis might be that: H1 :The new drug has a different effect, on average, compared to that of the current drug. We would write H1: the two drugs have different effects, on average. the new drug is better, on average, than the current drug. or H1: the new drug is better than the current drug, on average. We give special consideration to the null hypothesis 1) This is due to the fact that the null hypothesis relates to the statement being tested, Whereas the alternative hypothesis relates to the statement to be accepted if / when the null is rejected.

02) The final conclusion, once the test has been carried out, is always given in terms of the null hypothesis. We either 'reject H0 in favor of H1' or 'do not reject H0'; we never conclude 'reject H1', or even 'accept H1'. 03) 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 against H0 in favor of H1; rejecting the null hypothesis then, suggests that the alternative hypothesis may be true s important to narrow a question down to one that can reasonably be studied in a research project.

Developing Null hypothesis The formulation of the hypothesis basically varies with the kind of research project conducted:
We need to taken care to be sure the hypothesis as constructed appropriately and that the hypothesis testing conclusion provides the information the researcher or decision maker wants. Guidelines for establishing the Null hypothesis & Alternative hypothesis will be given for three types of situations in which Hypothesis testing commonly employed 1) Usually Rejecting of H is always influence on accept the product or situations. The Null & Alternative Hypothesis should be formulated so that the rejection of H Supports the conclusion and action being sought. The research Hypothesis therefore should be expressed as the alternative hypothesis Eg. H:25 H1: 25

Miles per gallon for estimation of performance of a machine. 2) Testing of validity of claim: If any situation that involves testing the validity of a claims. The Null Hypothesis is generally based on the assumption that the claim is true. The alternative Hypothesis is that formulated so that rejection of H will provide statistical evidence that the started assumption is incorrect. Action to correct the claims should be considered.+

3) Testing of decision making Situations In testing research hypothesis or testing the validity of a claim, action is taken if Ho is rejected. In many instance, however, action must be taken both when Ho cannot be rejected and when Ho can be rejected. In general this type of situation occurs when a decision maker must choose between two courses of action, One associated with the null hypothesis and another associated with the alternative hypothesis. H:=2 H1:2 Procedure for testing of hypothesis Hypothesis testing is a four-step procedure: Stating the hypothesis (Null or Alternative) Setting the criteria for a decision Collecting data Evaluate the Null hypothesis Initial Ideas (often vague and general)

Initial Observations literature

Search of existing research

Statement of the problem

Operational definitions of constructs

Research hypothesis (a specific deductive prediction)

Testing & Challenging

The degree of challenge to the hypothesis will depend on the type of problem and its importance. It can range from just seeking a good enoughsolution to a much more rigorous challenge. The term challenging may include 1) 2) 3) 4) 5) 6) 7) Verification Justification Refutability Validity Rectification Repeatability Falsification

Errors in Hypotheses
Two types of mistakes are possible while testing the hypotheses, are Type I Type II

Decision Errors
Two types of errors can result from a hypothesis test.

Type I error. A Type I error occurs when the researcher rejects a null hypothesis when it is true. The probability of committing a Type I error is called the significance level. This probability is also called alpha, and is often denoted by .

We reject the Null Hypothesis even though the Null Hypothesis is true.

Type II error. A Type II error occurs when the researcher fails to reject a null hypothesis that is false. The probability of committing a Type II error is called Beta, and is often denoted by . The probability of not committing a Type II error is called the Power of the test. We do not reject the Null Hypothesis when in fact the Null Hypothesis is false and the Alternative is true. Key points are The probability of a Type I error is called the Level Of Significance of the Hypothesis Test and is denoted by -alpha. The probability of a Type II error is denoted by . We choose to be small ( .01, .05 or .1) but we cannot completely eliminate the probability of a Type I error, as we mentioned already and are related.
The only way to reduce without increasing is to increase the sample size. Type I errors are generally considered the more serious so in our testing procedure we control the probability of these errors ( ) and usually are unaware of the probability of Type II errors ( ).

Decision Rules
The analysis plan includes decision rules for rejecting the null hypothesis. In practice, statisticians describe these decision rules in two ways - with reference to a P-value or with reference to a region of acceptance.

P-value. The strength of evidence in support of a null hypothesis is measured by the P-value. Suppose the test statistic is equal to S. The P-value is the probability of observing a test statistic as extreme as S, assuming the null hypotheis is true. If the Pvalue is less than the significance level, we reject the null hypothesis. Region of acceptance. The region of acceptance is a range of values. If the test statistic falls within the region of acceptance, the null hypothesis is not rejected. The region of acceptance is defined so that the chance of making a Type I error is equal to the significance level. The set of values outside the region of acceptance is called the region of rejection. If the test statistic falls within the region of rejection, the null hypothesis is rejected. In such cases, we say that the hypothesis has been rejected at the level of significance.

These approaches are equivalent. Some statistics texts use the P-value approach; others use the region of acceptance approach. In subsequent lessons, this tutorial will present examples that illustrate each approach.

Rejection Regions
One way of performing a Hypothesis test is to compute a rejection region. If we find that our test statistic (which we measure from our sample) is in this region then we reject our NULL Hypothesis. The computation of the rejection region is mathematical and involves us using statistical tables like the Normal tables. What is important is the idea that the rejection region is a region far away from our Null hypothesis. And that it is unlikely that we would observe a sample with a value of the test statistic (for example the sample mean or sample proportion) this far away from the Null Hypothesised value if that Null Hypothesis was true. For example in a class of 100 people. Suppose our Null Hypothesis is that the average age of the whole class is 31. Suppose we now observe a value of 20 in a sample we have randomly chosen. Thats very unlikely to have happened by chance if our Null Hypothesis was true. Its much more likely that our Null Hypothesis is false. So we decide to reject our Null hypothesis in favour of an alternative, which is that the true average age of the whole class is less than 31. So the procedure involves us deciding on a rule for when we should reject and when we shouldnt. We could say that in this example with a NULL of 31, if we find a value below 26 then we will not believe our NULL of 31. But theres still a chance that the true value could be 31 even though we observe a value below 26. So maybe we want to reduce the chances of that Type I error. To do that we decide on a new rule it says that we reject if we find a value below 23. Now if we find a sample value below 23 (thats 8 years younger than the hypothesised value of 31) we reject. And this time we are more sure of our decision than when we used 26 as our cut off value. So formally these regions below 26 and below 23 are our rejection regions and it is possible to mathematically construct the intervals so that the Type I error they correspond to is equal to some given value ( e.g. 0.1, or 0.05 or 0.01).

One-Tailed and Two-Tailed Tests

A test of a statistical hypothesis, where the region of rejection is on only one side of the sampling distribution, is called a one-tailed test.

For example, suppose the null hypothesis states that the mean is less than or equal to 10. The alternative hypothesis would be that the mean is greater than 10. The region of rejection would consist of a range of numbers located on the right side of sampling distribution; that is, a set of numbers greater than 10.

A test of a statistical hypothesis, where the region of rejection is on both sides of the sampling distribution, is called a two-tailed test. Example, suppose the null hypothesis states that the mean is equal to 10. The alternative hypothesis would be that the mean is less than 10 or greater than 10. The region of rejection would consist of a range of numbers located located on both sides of sampling distribution; that is, the region of rejection would consist partly of numbers that were less than 10 and partly of numbers that were greater than 10.

Section P-Values
Introduction The conclusion of a Hypothesis test is dependent on the initial choice of . Remember it was this Significance Level which determined the Rejection Region Remember also that = Probability of a Type I error. In these tests we decided what value of we could live with before we conducted the test. Aware as you are that decreasing increases , you might choose a different value for than I would. Depending on these choices of we may come to different conclusions about whether to reject the Null Hypothesis. An alternative approach to Hypothesis testing is not to state any at the outset but to wait until the Test Statistic has been calculated and then decide whether to reject or not by comparison with . This way all the calculations can be performed independent of any individual choice of and at the end each person can make a decision based on their choice of . How would we conduct such a test? Instead of computing a Rejection Region we calculate a P-Value. Small P-values are equivalent to values of the test statistic far away from the NULL. Dont worry about their computation. Definition- the P-Value is the smallest level of significance at which H0 can be rejected. VERY IMPORTANT: How to use P-values

Once the P-value has been determined, the conclusion at any particular level of results from comparing the P-value to : 1. P-value => Reject H0 at level 2. P-value > => Do Not Reject H0 at level

These two statements are exactly equivalent to saying 1. Test statistic lies in rejection region, and is far from Null Hypothesised value. 2. Test statistic lies outside rejection region and is close to Null Hypothesised value.

Hypothesis testing for difference between Means and proportions In many decisions making situations, people need to determine whether the parameters of two populations are alike or different. A company may want to test, for example, whether its female employees receive lower salaries than its male employees for the same work. A training director may wish to determine whether the proportion of promotable employees at one govt installation id different from that at another. A drug manufacturer may need to know whether a new drug causes one reaction in one griour of experimental animals but a different reaction in another group. In such of these examples, decision makers are concerned with the parameters of two populations, In these situations, they are not as interested in the actual value of the parameters as they are in the relation between the value of the two parameters that is how these parameters differ. Do female employees earn less than male employees for the same work? Is the proportion of promotable employees at one installation different from that at another? Did one group of experimental animals react differently from the another? In this chapter, we shall introduce methods by which these questions can be answered, using Hypothesis-testing procedures. Difference between Means Statistics problems often involve comparisons between two independent sample means. Suppose we have two populations with means equal to the samples of the size n1 and n2. And finally following assumptions are valid.

The size of the population is large relative to the sample drawn from the problem. That is, N1 is large relative n1, and N2 to large relative is n2.( in this context, populations are considered to be large if they are at least 10 times bigger than their sample). The samples are independent; that is observations in populations 1 are not affected by observations in population 2 and vice versa. The set of differences between sample means is normally distributed. This will be true if each population is normal or if the sample sizes are large. (Based on the central limit theorem, sample sizes of 40 are large enough).

Given these assumptions, we know the following. The expected value of the difference between all possible sample means is equal to the difference between population means. Thus, E(x1 - x2) = d = 1 - 2. The standard deviation of the difference between sample means (d) is approximately equal to: d = sqrt( 12 / n1 + 22 / n2 )

It is straightforward to derive the last bullet point, based on material covered in previous lessons. The derivation starts with a recognition that the variance of the difference between independent random variables is equal to the sum of the individual variances. Thus, 2d = 2 (x1 - x2) = 2 x1 + 2 x2 If the populations N1 and N2 are both large relative to n1 and n2, respectively, then 2 x1 = 21 / n1 Therefore, d2 = 12 / n1 + 22 / n2 And d = sqrt( 12 / n1 + 22 / n2 ) And 2 x2 = 22 / n2

Difference Between Means: Sample Problem In this section, we work through a sample problem to show how to apply the theory presented above. The approach presented is valid whenever we need to analyze differences between independent sample means. In this example, differences between means are modeled with a normal distribution; so we use Stat Trek's Normal Distribution Calculator to compute probabilities. The Calculator is free.

The Normal Distribution

A normal distribution is a very important statistical data distribution pattern occurring in many natural phenomena, such as height, blood pressure, lengths of objects produced by machines, etc. Certain data, when graphed as a histogram (data on the horizontal axis, amount of data on the vertical axis), creates a bell-shaped curve known as a normal curve, or normal distribution. All normal distributions are symmetric and have bell-shaped density curves with a single peak.To speak specifically of any normal distribution, two quantities have to be specified: the mean, where the peak of the density occurs, and the standard deviation, which indicates the spread or girth of the bell curve. Normal distributions are symmetrical with a single central peak at the mean (average) of the data. The shape of the curve is described as bell-shaped with the graph falling off evenly on either side of the mean. Fifty percent of the distribution lies to the left of the mean and fifty percent lies to the right of the mean. The spread of a normal distribution is controlled by the standard deviation. The smaller standard deviation the more concentrated the data.

The mean and the median are the same in a normal distribution.

Chart prepared by the NY State Education Department Reading from the chart, we see that approximately 19.1% of normally distributed data is located between the mean (the peak) and 0.5 standard deviations to the right (or left) of the

mean. (The percentages are represented by the area under the curve.) If we add percentages, you will see that approximately: 68% of the distribution lies within one standard deviation of the mean. 95% of the distribution lies within two standard deviations of the mean. 99.7% of the distribution lies within three standard deviations of the mean. These percentages are known as the "empirical rule". Note: The addition of percentages in the chart at the top of the page are slightly different than the empirical rule values due to rounding that has occurred in the chart.

s.d. in callout boxes = standard deviation It is also true that: 50% of the distribution lies within 0.67448 standard deviations of the mean. If you are asked for the interval about the mean containing 50% of the data, you are actually being asked for the interquartile range, IQR. The IQR (the width of an interval which contains the middle 50% of the data set) is normally computed by subtracting the first quartile from the third quartile. In a normal distribution (with mean 0 and standard deviation 1), the first and third quartiles are located at -0.67448 and +0.67448 respectively. Thus the IQR for a normal distribution is:

Interquartile range = 1.34896 x standard deviation (this will be the population IQR)

The mean (at the centre peak of the curve) is the 50% percentile. The term "percentile rank" refers to the area (probability) to the left of the value. Adding the given percentages from the chart will let you find certain percentiles along the curve.

Difference of Two-Means Test T tests. hypothesis test for the difference between two means. The test procedure, called the twosample t-test, is appropriate when the following conditions are met: The sampling method for each sample is simple random sampling. The samples are independent. Each population is at least 10 times larger than its respective sample. Each sample is drawn from a normal or near-normal population. Generally, the sampling distribution will be approximately normal if any of the following conditions apply. The population distribution is normal. The sample data are symmetric, unimodal, without outliers, and the sample size is 15 or less. The sample data are slightly skewed, unimodal, without outliers, and the sample size is 16 to 40. The sample size is greater than 40, without outliers. This approach consists of four steps: (1) state the hypotheses (2) formulate an analysis plan (3) analyze sample data, and (4) interpret results.

State the Hypotheses

Every hypothesis test requires the analyst to state a null hypothesis and an alternative hypothesis. The hypotheses are stated in such a way that they are mutually exclusive. That is, if one is true, the other must be false; and vice versa. The table below shows three sets of null and alternative hypotheses. Each makes a statement about the difference d between the mean of one population 1 and the mean of another population 2. (In the table, the symbol means " not equal to ".) Set 1 2 3 Null hypothesis 1 - 2 = d 1 - 2 > d 1 - 2 < d Alternative hypothesis 1 - 2 d 1 - 2 < d 1 - 2 > d Number of tails 2 1 1

The first set of hypotheses (Set 1) is an example of a two-tailed test, since an extreme value on either side of the sampling distribution would cause a researcher to reject the null hypothesis. The other two sets of hypotheses (Sets 2 and 3) are one-tailed tests, since an extreme value on only one side of the sampling distribution would cause a researcher to reject the null hypothesis. When the null hypothesis states that there is no difference between the two population means (i.e., d = 0), the null and alternative hypothesis are often stated in the following form. H0: 1 = 2 Ha: 1 2 Formulate an Analysis Plan The analysis plan describes how to use sample data to accept or reject the null hypothesis. It should specify the following elements. Significance level. Often, researchers choose significance levels equal to 0.01, 0.05, or 0.10; but any value between 0 and 1 can be used. Test method. Use the two-sample t-test to determine whether the difference between means found in the sample is significantly different from the hypothesized difference between means. Analyze Sample Data Using sample data, find the standard error, degrees of freedom, test statistic, and the P-value associated with the test statistic. Standard error. Compute the standard error (SE) of the sampling distribution. SE = sqrt[(s12/n1) + (s22/n2)] where s1 is the standard deviation of sample 1, s2 is the standard deviation of sample 2, n1 is the size of sample 1, and n2 is the size of sample 2. Degrees of freedom. The degrees of freedom (DF) is: DF = (s12/n1 + s22/n2)2 / { [ (s12 / n1)2 / (n1 - 1) ] + [ (s22 / n2)2 / (n2 - 1) ] } If DF does not compute to an integer, round it off to the nearest whole number. Some texts suggest that the degrees of freedom can be approximated by the smaller of n1 - 1 and n2 - 1; but the above formula gives better results. Test statistic. The test statistic is a t-score (t) defined by the following equation. t = [ (x1 - x2) - d ] / SE

where x1 is the mean of sample 1, x2 is the mean of sample 2, d is the hypothesized difference between population means, and SE is the standard error. P-value. The P-value is the probability of observing a sample statistic as extreme as the test statistic. Since the test statistic is a t-score, use the t Distribution Calculator to assess the probability associated with the t-score, having the degrees of freedom computed above. (See sample problems at the end of this lesson for examples of how this is done.) Interpret Results If the sample findings are unlikely, given the null hypothesis, the researcher rejects the null hypothesis. Typically, this involves comparing the P-value to the significance level, and rejecting the null hypothesis when the P-value is less than the significance level.

Proportion testing A hypothesis test, or test of two contradictory potential solutions to a problem, used to draw inferences about the proportion of members of a population that have a specific characteristic. A hypothesis test for proportions measures the proportions of members with the characteristic in one or more samples from the population in order to gauge the proportions that exist in the population itself. to conduct a hypothesis test of a proportion, when the following conditions are met: The sampling method is simple random sampling. Each sample point can result in just two possible outcomes. We call one of these outcomes a success and the other, a failure. The sample includes at least 10 successes and 10 failures. (Some texts say that 5 successes and 5 failures are enough.) The population size is at least 10 times as big as the sample size.

This approach consists of four steps: (1) State the hypotheses (2) Formulate an analysis plan (3) Analyze sample data, and (4) Interpret results. State the Hypotheses Every hypothesis test requires the analyst to state a null hypothesis and an alternative hypothesis. The hypotheses are stated in such a way that they are mutually exclusive. That is, if one is true, the other must be false; and vice versa. Formulate an Analysis Plan The analysis plan describes how to use sample data to accept or reject the null hypothesis. It should specify the following elements. Significance level. Often, researchers choose significance levels equal to 0.01, 0.05, or 0.10; but any value between 0 and 1 can be used.

Test method. Use the one-sample z-test to determine whether the hypothesized population proportion differs significantly from the observed sample proportion. nalyze Sample Data Using sample data, find the test statistic and its associated P-Value. Standard deviation. Compute the standard deviation () of the sampling distribution. = sqrt[ P * ( 1 - P ) / n ] where P is the hypothesized value of population proportion in the null hypothesis, and n is the sample size.

Test statistic. The test statistic is a z-score (z) defined by the following equation. z = (p - P) / where P is the hypothesized value of population proportion in the null hypothesis, p is the sample proportion, and is the standard deviation of the sampling distribution.

P-value. The P-value is the probability of observing a sample statistic as extreme as the test statistic. Since the test statistic is a z-score, use the Normal Distribution Calculator to assess the probability associated with the z-score. (See sample problems at the end of this lesson for examples of how this is done.)

Interpret Results If the sample findings are unlikely, given the null hypothesis, the researcher rejects the null hypothesis. Typically, this involves comparing the P-value to the significance level, and rejecting the null hypothesis when the P-value is less than the significance level.

Difference in Proportions Test The Difference in Proportions Test for Two Proportions test for a statistically significant difference between two proportions drawn from independent samples. Hypothesis testing of the difference between two population proportions It is frequently important to test the difference between two population proportions. Generally we would test = . This permits the construction of a pooled estimate which is given by the following formula.

The standard error of the estimator is:

Problem

In a study of patients on sodium-restricted diets, 55 patients with hypertension were studied. Among these, 24 were on sodium-restricted diets. Of 149 patients without hypertension, 36 were on sodium-restricted diets. We would like to know if we can conclude that, in the sampled population, the proportion of patients on sodium-restricted diets is higher among patients with hypertension than among patients without hypertension. (1) Data Patients with hypertension: Patients without hypertension: = 55 = 149 = .05 = 24 = 36 = .4364 = .2416

(2) Assumptions
(3) Hypotheses : p1 p2

independent random samples from the populations

: p1 > p2 (4) Test statistic The test statistic is z which is calculated as

(a) Distribution of test statistic

If the null hypothesis is true, the test statistic approximately follows the standard normal distribution. (b) Decision rule With = .05 the critical z score is 1.645. We reject if z > 1.645.

(5) Calculation of test statistic

6) Statistical decision Reject because 2.71 > 1.645

(7) Conclusion The proportion of patients on sodium restricted diets among hypertensive patients is higher than in non hypertensive patients. p = .0034

The Difference between Two Means Suppose a researcher wishes to determine whether there is a difference in the average age of nursing students who enrol in a nursing program at a community college and those who enrol in a nursing program at a university. In this case, the researcher is not interested in the average age of all beginning nursing students; instead, he is interested in comparing the means of the two groups. His research question is: Does the mean age of nursing students who enrol at a community college differ from the mean age of nursing students who enrol at a university? Here, the hypotheses are H0: 1 = 2 and H1: 1 2 where 1= mean age of all beginning nursing students at the community college 2= mean age of all beginning nursing students at the university. Another way of stating the hypotheses for this situation is H0: 1 -2=0 And H1: 1 - 2 0

If there is no difference in population means, subtracting them will give a difference of zero. If they are different, subtracting will give a number other than zero. Both methods of stating hypotheses are correct; however, the first method will be used in this chapter. The theory

behind testing the difference between two means is based on selecting pairs of samples and comparing the means of the pairs. The population means need not be known. All possible pairs of samples are taken from populations. The means for each pair of samples are computed and then subtracted, and the differences are plotted. If both populationshave the same mean, then most of the differences will be zero or close to zero. Occasionally, there will be a few large differences due to chance alone, some positive and others negative. If the differences are plotted, the curve will be shaped like the normal distribution and have a mean of zero, Assumptions for the test to determine the difference between two means: 1. The samples must be independent of each other; that is, there can be no relationship between the subjects in each sample. 2. The populations from which the samples were obtained must be normally distributed, and the standard deviations of the variable must be known, or the sample sizes must be greater than or equal to 30. Testing of varience

Chi-Square Test for the Variance

A chi-square test (Snedecor and Cochran, (1983) can be used to test if the variance of a population is equal to a specified value. This test can be either a two-sided test or a one-sided test. The two-sided version tests against the alternative that the true variance is either less than or greater than the specified value. The one-sided version only tests in one direction. The choice of a two-sided or one-sided test is determined by the problem. For example, if we are testing a new process, we may only be concerned if its variability is greater than the variability of the current process. Test Statistic: Where N is the sample size and s is the sample standard deviation. The key element of this formula is the ratio s/0 which compares the ratio of the sample standard deviation to the target standard deviation. The more this ratio deviates from 1, the more likely we are to reject the null hypothesis Significance Level: .

F-Test for Equality of Two Variances

An F-test (Snedecor and Cochran, 1983) is used to test if the variances of two populations are equal. This test can be a two-tailed test or a one-tailed test. The two-tailed version tests against the alternative that the variances are not equal. The one-tailed version only tests in one direction,that is the variance from the first population is either greater than or less than

(but not both) the second population variance. The choice is determined by the problem. For example, if we are testing a new process, we may only be interested in knowing if the new process is less variable than the old process. The F hypothesis test is defined as: Ho: 12 = 22 Ho: 12 < 22 12 > 22 12 22 F= where and are the sample variances. The more this ratio deviates from 1, the stronger the evidence for unequal population variances. Significance Level ; Critical region The hypothesis that the two variances are equal is rejected if F > F, N1-1, N2-1 F < F1-, N1-1, N2-1 for an upper one-tailed test for a lower one-tailed test for a lower one-tailed test for an upper one-tailed test for a two-tailed test

F < F1-/2, N1-1, N2-1 for a two-tailed test or F > F/2, N1-1, N2-1 where F, N1-1, N2-1 is the critical value of the F distributionwith N1-1 and N2-1 degrees of freedom and a significance level of . In the above formulas for the critical regions, the Handbook follows the convention that F is the upper critical value from the F distribution and F1- is the lower critical value from the F distribution. Note that this is the opposite of the designation used by some texts and software programs. Problems 1. The data set contains 480 ceramic strength measurements for two batches of material. The summary statistics for each batch are shown below. BATCH 1 NUMBER OF OBSERVATIONS = 240

Mean 688.9987 S.D. = 65.54909 Batch no 2 NUMBER OF OBSERVATIONS = 240 Mean =611.1559 Standard D = 61.85425 We are testing the null hypothesis that the variance for the two batches are equal. Ho : SD 1=SD2 H1 : SD1 SD2 Test statistic: F = 1.123037 Numerator degrees of freedom: N1 - 1 = 239 Denominator degrees of freedom: N2 - 1 = 239 Significance level: = 0.05 Critical values: F(1-/2,N1-1,N2-1) = 0.7756 F(/2,N1-1,N2-1) = 1.2894 Rejection region: Reject H0 if F < 0.7756 or F > 1.2894 The F test indicates that there is not enough evidence to reject the null hypothesis that the two batch variancess are equal at the 0.05 significance level. The F-test can be used to answer the following questions 1. Do two samples come from populations with equal variances? 2. Does a new process, treatment, or test reduce the variability of the current process? Analysis of variance In statistics, analysis of variance (ANOVA) is a collection of statistical models, and their associated procedures, in which the observed variance in a particular variable is partitioned into components attributable to different sources of variation. In its simplest form, ANOVA provides a statistical test of whether or not the means of several groups are all equal, and therefore generalizes t-test to more than two groups. Doing multiple two-sample t-tests would

result in an increased chance of committing a type I error. For this reason, ANOVAs are useful in comparing two, three, or more means. ANOVA is a particular form of statistical hypothesis testing heavily used in the analysis of experimental data. A statistical hypothesis test is a method of making decisions using data. A test result (calculated from the null hypothesis and the sample) is called statistically significant if it is deemed unlikely to have occurred by chance, assuming the truth of the null hypothesis. A statistically significant result (when a probability (p-value) is less than a threshold (significance level)) justifies the rejection of the null hypothesis. In the typical application of ANOVA, the null hypothesis is that all groups are simply random samples of the same population. This implies that all treatments have the same effect (perhaps none). Rejecting the null hypothesis implies that different treatments result in altered effects. y construction, hypothesis testing limits the rate of Type I errors (false positives leading to false scientific claims) to a significance level. Experimenters also wish to limit Type II errors (false negatives resulting in missed scientific discoveries). The Type II error rate is a function of several things including sample size (positively correlated with experiment cost), significance level (when the standard of proof is high, the chances of overlooking a discovery are also high) and effect size (when the effect is obvious to the casual observer, Type II error rates are low). The terminology of ANOVA is largely from the statistical design of experiments. The experimenter adjusts factors and measures responses in an attempt to determine an effect. Factors are assigned to experimental units by a combination of randomization and blocking to ensure the validity of the results. Blinding keeps the weighing impartial. Responses show a variability that is partially the result of the effect and is partially random error. Analysis of Variance (ANOVA) is a hypothesis-testing technique used to test the equality of two or more population (or treatment) means by examining the variances of samples that are taken. ANOVA allows one to determine whether the differences between the samples are imply due to random error (sampling errors) or whether there are systematic treatment effects that causes the mean in one group to differ from the mean in another. Most of the time ANOVA is used to compare the equality of three or more means, however when the means from two samples are compared using ANOVA it is equivalent to using a ttest to compare the means of independent samples. ANOVA is based on comparing the variance (or variation) between the data samples to variation within each particular sample. If the between variation is much larger than the within variation, the means of different samples will not be equal. If the between and within variations are approximately the same size, then there will be no significant difference between sample means. Assumptions of ANOVA: (i) All populations involved follow a normal distribution. (ii) All populations have the same variance (or standard deviation).

(iii) The samples are randomly selected and independent of one another. Since ANOVA assumes the populations involved follow a normal distribution, ANOVA falls into a category of hypothesis tests known as parametric tests. If the populations involved did not follow a normal distribution, an ANOVA test could not be used to examine the equality of the sample means. Instead, one would have to use a non-parametric test (or distributionfree test), which is a more general form of hypothesis testing that does not rely on distributional assumptions. ANOVA is the synthesis of several ideas and it is used for multiple purposes. As a consequence, it is difficult to define concisely or precisely. "Classical ANOVA for balanced data does three things at once: 1. As exploratory data analysis, an ANOVA is an organization of an additive data decomposition, and its sums of squares indicate the variance of each component of the decomposition (or, equivalently, each set of terms of a linear model). 2. Comparisons of mean squares, along with F-tests ... allow testing of a nested sequence of models. 3. Closely related to the ANOVA is a linear model fit with coefficient estimates and standard errors. In short, ANOVA is a statistical tool used in several ways to develop and confirm an explanation for the observed data. 4. It is computationally elegant and relatively robust against violations to its assumptions. 5. ANOVA provides industrial strength (multiple sample comparison) statistical analysis. 6. It has been adapted to the analysis of a variety of experimental designs.

Data types that can be analysed with ANOVA 1. The data points must be independent from each other 2. The distributions must be normal (though small departures can be accommodated) 3. The variances of the samples are not different (though some departures are accommodated) (F-test or homogeneity of variance test) 4. All individuals must be selected at random from the population 5. All individuals must have equal chance of being selected 6. Sample sizes should be as equal as possible but some differences are allowed

Limitations of the test 01. If you do not find a significant difference in your data, you cannot say that the samples are the same 02. Information covered by this page is only a fraction of what ANOVA can offer 03. ANOVA will only indicate a difference between groups, not which group(s) are different. For the latter you will need to use a multiple comparison test. F-Test The decision of whether or not to reject the null hypothesis that the sample means are similar to each other requires that the value for F be compared with a critical value. And, in turn, just as for the t-test, the critical value differs with the number of degrees of freedom. Unlike the t-test, the critical value of F needed to reject the null hypothesis at any given level of significance (e.g. .05, .01, or .001) varies with two rather than only one indicator of degrees of freedom. The alpha level of F for rejecting the null hypothesis depends on both the Between and the Within groups degrees of freedom. An additional difference between the t and F tests is that t-tests are commonly used in one-tailed tests that are directional (e.g. electricians' average income is higher than plumbers' average income) as well as in two-tailed tests that are non-directional tests (electricians' average income differs from plumbers' average income). By contrast, in general, the F test is used in non-directional tests. That is, the alternative hypothesis is that 1 2 3 k. The question we will address is strictly whether the means differ from each other. Nonetheless, it is possible to test more specific alternative hypotheses. For example, the null hypothesis could be that electricians, plumbers, and carpenters all have comparable mean income; and the alternative hypothesis could be that electricians have higher income than either carpenters or plumbers. Such directional tests lie beyond the scope of this tutorial. Influences on the F-ratio Each of the next three activities will demonstrate one of three different influences on the F Ratio: the variance of values within each group, the variance of values between groups, and the sample size of each group. The activities which follow display the distribution of observed values on an imaginary dependent variable for each of three independent variable categories, the "green group", the "turquoise group", and the "blue group".

This activity displays how the differences in the observed group means is related to the Between Groups Sum of Squares and Mean Square, and how the Between Group Sum of Squares and Mean Square are related to F. Start by clicking on the button for

the green group. Then use the scroll bar below the distribution to move the distribution of scores for the green group. Move the distribution so that the mean for the green group is equal to 50. Then, repeat this process for the blue group and the turquoise group, so that all group means are equal to 50. Next, try separating the groups as much as possible: shift the groups so that the mean for the green group is equal to zero, the mean for the blue group is equal to 50, and the mean for the turquoise is equal to 99. Observe how the Between Groups Sum of Squares and Mean Square changes, as well as how the F ratio changes. As you can see, the greater the difference among the means, the higher the F and the greater the likelihood of rejecting the null hypothesis. It is important to note that a large F does not by itself convey why or how the means differ from each other. A high F value can be found when the means for all of the groups differ at least moderately from each other. Alternatively, a high F can be obtained when most of the means are fairly similar but one of the means happen to be far removed from the other means. You can see this in the example above if you position the green group and the turquoise group so as to have nearly identical means, but you position the blue group to have a mean which is far removed from both the green and the turquoise groups. In the next example, it will be shown how the variability of observed scores within each group also influences the F ratio. Reference; 1. Richard L. Levin and David S. Rubin., (2004), Statistics for Management, Seventh Edition, Pearson Education (Singapore) Pte. Ltd. Indian Branch, New Delhi. 2. Gupta S.P., Statistical methods, Forty First Edition, Sultan Chand and sons, Educational Publishers, New Delhi. 3. Donald R Cooper and Pamela S Schindler, (2007), Business Research Methods, Ninth Edition, Tata Mc graw hill Publishing company limited, New Delhi. 4. T N Srivastava and Shailaja Rego, (2011), Business research methodology, Tata Mc graw hill education private limited , New Delhi. 5. C. R. Kothari, (2010), Research Methodology, New Age International (P) Limited, Publishers, New Delhi. 6. P.C. Jain, (1989), Marketing Research Management, First edition Prateeksha Publications, Jaipur. 7. Rew Rutherford, (2008), Introducing Anova and Ancova, A GLM Approach, Sage Publications Ltd, New Delhi.

8. Edward J Dudewicz and Snjay Mishra,Modern, (1988), Mathematical Statistics, Jahn Wilay & Sons, Canada.

9. Fred. N. Kerlinger, (2002), Foundations of Behavioural Research, Surjeeth Publications,

10. Dr L N Koli, (2002), Research Methodology, Y K Publication, Agra.

11. http://stattrek.com/online-calculator/chi-square.aspx#tscore 12. http://www.ucd.ie/statdept/classpages/introquantmeths/ 13. http://www.istheory.yorku.ca 14. https://www.khanacademy.org/math/probability/statistics-inferential/chi-square/v/chisquare-distribution-introduction 15. http://www.businessdictionary.com/definition/analysis-of-variancesANOVA.html#ixzz2NbJ77pVd 16. http://www.skidmore.edu/~hfoley/Handouts/Two-way.ANOVA.pdf 17. http://www.stat.cmu.edu/~hseltman/309/Book/chapter11.pdf 18. http://www.slideshare.net/HarishSN/savedfiles?s_title=one-wayanova&user_login=shoffma5