HYPOTHESIS TESTING FOR THE POPULATION MEAN

Step 1: Formulate the hypothesis.

𝐻0 : population parameter = hypothesized value (or 𝐻0 : population parameter =

or ≥ or ≤ hypothesized value, "has got to do with equality and it always oppose 𝐻1 ”)

𝐻1 : population parameter ≠ or < or > hypothesized value

(≠ is for two tailed test, < and > is for one tailed test )

Step 2: determine what is given so that you know which critical value and test
statistic to use (if 𝜎 is known use 𝑧 and if it is unknown use 𝑡)

𝑋̅−𝜇
Step 3: calculate the test statistic if 𝜎 is known then 𝑧 = 𝑧𝑠𝑡𝑎𝑡 = 𝜎 and
⁄ 𝑛
√

𝑋̅−𝜇
if 𝜎 is not known then 𝑡 = 𝑡𝑠𝑡𝑎𝑡 = 𝑆
⁄
√𝑛

Step 4: determine the critical value (𝑧𝑐𝑟𝑖𝑡 = 𝑧𝛼 or 𝑡𝑐𝑟𝑖𝑡 =

𝑡𝑛−1,𝛼 for one tailed test and 𝑧𝑐𝑟𝑖𝑡 = 𝑧𝛼 or 𝑡𝑐𝑟𝑖𝑡 = 𝑡𝑛−1,𝛼 for two tailed test and/or the
2 2

region of acceptance or rejection.

Step 5: state the decision rule and then draw conclusion.

The decision rule is guided by 𝐻1

1. If 𝐻1 : population parameter > hypothesized value

Then we reject 𝐻𝑜 if 𝑧𝑠𝑡𝑎𝑡 > 𝑧𝑐𝑟𝑖𝑡 or 𝑡𝑠𝑡𝑎𝑡 > 𝑡𝑐𝑟𝑖𝑡
2. If 𝐻1 : population parameter < hypothesized value
Then we reject 𝐻𝑜 if 𝑧𝑠𝑡𝑎𝑡 < (−)𝑧𝑐𝑟𝑖𝑡 or 𝑡𝑠𝑡𝑎𝑡 < (−)𝑡𝑐𝑟𝑖𝑡
3. If 𝐻1 : population parameter ≠ hypothesized value
Then we reject 𝐻𝑜 if 𝑧𝑠𝑡𝑎𝑡 > 𝑧𝑐𝑟𝑖𝑡 or 𝑡𝑠𝑡𝑎𝑡 > 𝑡𝑐𝑟𝑖𝑡 or
if 𝑧𝑠𝑡𝑎𝑡 < (−)𝑧𝑐𝑟𝑖𝑡 or 𝑡𝑠𝑡𝑎𝑡 < (−)𝑡𝑐𝑟𝑖𝑡

AND if we use the p-value to state the decision,

we always reject 𝐻𝑜 if p-value irrespective of the sign of 𝐻1 (< 𝑜𝑟 > 𝑜𝑟 ≠)

finding the p-value is also guided by 𝐻1 and be done if the test statistic is 𝑧𝑠𝑡𝑎𝑡

1. If 𝐻1 : population parameter > hypothesized value

Then the p-value is 𝑃(𝑍 > 𝑧𝑠𝑡𝑎𝑡 )

2. If 𝐻1 : population parameter < hypothesized value

Then the p-value is 𝑃(𝑍 < (−)𝑧𝑠𝑡𝑎𝑡 )
3. If 𝐻1 : population parameter ≠ hypothesized value
(i) Then the p-value is 𝑃(𝑍 > 𝑧𝑠𝑡𝑎𝑡 )+ 𝑃(𝑍 < (−)𝑧𝑠𝑡𝑎𝑡 )
(ii) Or the p-value is 2 × 𝑃(𝑍 > 𝑧𝑠𝑡𝑎𝑡 )
(iii) Or the p-value is 2 × 𝑃(𝑍 < (−)𝑧𝑠𝑡𝑎𝑡 )

NB: finding the P-value depends on 𝐻1 , but stating the decision does not depend
on 𝐻1
Example

The coffee association has reported that the mean daily consumption for South
African citizens to be 1.65 cups. Assume that a sample of 38 people from Limpopo
consumed a mean of 1.84 cups of coffee per day with a standard deviation of 0.85
cups. Using 5% level of significance, can the Limpopo citizens be said to consume
significantly more coffee than the rest of South Africa?

Solution:

1. 𝐻0 : 𝜇 = 1.65
𝐻1 : 𝜇 > 1.65
2. 𝑛 = 38, 𝑋̅ = 1.84, 𝑆 = 0.85 and 𝛼 = 0.05, so
𝜎 is unknown therefore we use 𝑡
𝑋̅ −𝜇 1.84−1.65
3. 𝑡 = 𝑡𝑠𝑡𝑎𝑡 = 𝑆 = 0.85⁄ = 1.3779
⁄
√𝑛 √38

4. 𝑡𝑐𝑟𝑖𝑡 = 𝑡𝛼 for one tailed test because 𝐻1 : 𝜇 > 1.65

Therefore 𝑡𝑐𝑟𝑖𝑡 = 𝑡𝑛−1,𝛼 = 𝑡38−1,0.05 = 𝑡37,0.05 = 1.6871

5. Decision rule: we reject 𝐻0 if 𝑡𝑠𝑡𝑎𝑡 > 𝑡𝑐𝑟𝑖𝑡

𝑡𝑠𝑡𝑎𝑡 = 1.3779 < 𝑡𝑐𝑟𝑖𝑡 = 1.6871, therefore we fail to reject 𝐻0 at 𝛼 = 0.05
And we conclude that Limpopo citizens are said to consume not more coffee
than the rest of South Africa.