Degree: Bachelor in Engineering

Course: Statistics 2013/14

Inferences about the mean

The aim is to investigate the plausibility of a given set of values of using the information provided by a collection of i.i.d. data X1 , . . . , Xn . Several situations can be distinguished.

[I] Exact normality and 2 known

If X1 , . . . , Xn are i.i.d. N (, 2 ) and 2 is known, the essential inference tool is the standardized statistic Z= X N (0, 1) , / n (1)

that depends on only in the numerator. There are two possibilities: A. Construct a (1 ) 100% condence interval for . Given a nominal level 0 < < 1. consider the probability statement Pr [|(X )/(/ n)| z/2 ] = Pr (|N (0, 1)| z/2 ) = 1 ,

(3)

that holds for all possible values of . Condition (3) can be written in the form Pr (X z/2 < < X + z/2 ) = 1 . (4) n n Hence, the interval centered at X , X z/2 = (X z/2 , X + z/2 ) , n n n is said to be a (1 ) 100% condence interval for . The interpretation of region (5) is that it covers a set of parameter values for that are plausible under the given data set X1 , . . . , Xn . Example 1. A college admission ocer for an Engineering master program has determined that, historically, candidates have undergraduate point averages that are normally distributed with standard deviation = .45. A random sample of n = 25 applicants for the current academic course is taken, yielding a sample mean grade point average of 2.90. Find a 95% condence interval for the population mean. Solution. Taking = .05, and then z/2 = z.025 = 1.96, it follows that a 95% condence interval of the form (5) for the population mean is 0.45 X z/2 = 2.90 1.96 = (2.7236, 3.0764) . n 25 (5)

Universidad Carlos III de Madrid

1/4

Degree: Bachelor in Engineering

Course: Statistics 2013/14

Related exercises of Practice Workbook. Item 31. B. If 0 is a known given value of the mean, testing the null hypothesis H0 : = 0 versus the alternative hypothesis H1 : = 0 .

In this case, the method proceeds by steps: 1. An adequate test statistic is the feasible quantity Z0 = X 0 , / n (6)

which is just the standardized pivot of (1) evaluated at = 0 . Suitability of (6) follows because large values of |Z0 | are indicative that the null hypothesis H0 : = 0 is not true. 2. The null hypothesis H0 : = 0 is rejected at level when |Z0 | > z/2 . Hence, the probability of rejecting under H0 is Pr (|Z0 | > z/2 ) = Pr (|N (0, 1)| > z/2 ) = . Under (7)-(8), it is said that H0 : = 0 is rejected at level . 3. A measure of the signicance, or magnitude, of |Z0 | that leads to rejection of H0 : = 0 is the so-called pvalue of the test. This is dened as the probability of observing a more extreme value than |Z0 | under the null H0 : = 0 . In other words: p value = Pr [|N (0, 1)| > |Z0 |] . (9) (8) (7)

By denition (9), only pvalues below lead to rejection of H0 at level . This is because, by the structure of criterion (8) p value |Z0 | > z/2 . A pvalue .1 indicates moderate evidence against H0 ; when .01 < p value < .05 there is (clear) evidence against H0 ; and there is strong evidence against H0 when p value < .01.

[II] Complements
1. The framework of H0 : = 0 (point null hypothesis) versus H1 : = 0 (two -sided alternative) can be changed according to the table below. Rejection criteria (7)-(8) and pvalues of (9) must be modied accordingly. Details are given in the following table:

Universidad Carlos III de Madrid

2/4

Degree: Bachelor in Engineering

Course: Statistics 2013/14

point one-sided one-sided

H0 = 0 0 0

two-sided one-sided one-sided

H1 = 0 < 0 > 0

Rejection |Z0 | > z/2 Z0 < z1 Z0 > z

pvalue Pr [|N (0, 1)| > |Z0 |] Pr [N (0, 1) < Z0 ] Pr [N (0, 1) > Z0 ]

Table 1. Rejection criteria and pvalues for Z tests for the mean with i.i.d. data X1 , . . . , Xn from a N (, 2 ) with 2 known.

Notice that both the rejection criteria and associated pvalues adapt to the direction of rejection, that is dictated by the structure of the alternative hypothesis H1 . 2. Criteria for choosing H0 and H1 . The basic principle that applies is: When an investigation is aimed at establishing the existence of sample evidence in favor of a given assertion on the parameter, the assertion itself is taken as the alternative hypothesis H1 . The negation of H1 is then taken as the null hypothesis H0 . The principle above is inspired in the court trial paradigm, in which a person is held to be innocent (H0 ), unless clear evidence is found on the contrary (H1 ). Example 2. A manufacturer of detergent claims that the contents of boxes sold weigh, on average, at least 16 ounces. The distribution of weights is known to be normal, with standard deviation = .4 ounce. A random sample of n = 16 boxes produced a sample mean weight of 15.84 ounces. Is there any evidence against the manufacturers claim? Or, phrased dierently, test the null hypothesis that the population mean weight is at least 16 ounces. Use = .10. Solution. In this context, the null and alternative hypotheses are of the form H0 : 16 H1 : < 16 In other words, the task is to determine if X = 15.84 contains enough evidence to reject H0 : 16 in favor of H1 : < 16. Following the indications of Table 1., the standardized score of (6) takes the value Z0 = X 0 15.84 16 = = 1.6 . / n 0.4/ 16 .

Since Z0 < z.90 = 1.28, the null H0 : 16 is rejected in favor of H1 : < 16 at level = .10. In fact, the pvalue of the test is p value = Pr (N (0, 1) < 1.6) = 0.0548 < 0.10 . Therefore, there is a clear evidence in the sample against the manufacturers claim H0 : 16.

Universidad Carlos III de Madrid

3/4

Degree: Bachelor in Engineering

Course: Statistics 2013/14

[III] Errors
The value of the mean is always unknown. Thus, in every testing procedure, the following table of errors is obtained: Reject H0 Not Reject H0 H0 true TYPE I H1 true TYPE II

In the analogy of the court trial paradigm, an error of TYPE I must be always more costly than one of TYPE II. This is because declaring guilty an innocent person is much worse than acquitting a guilty individual. The previous consideration can be also used to select the hypotheses H0 and H1 . As seen above, these behave asymmetrically as far as their rejection errors is concerned.

Universidad Carlos III de Madrid

4/4