Ch10 HypothesisTest One AndTwo

Walpole,Probability and Statistics for Engineers & Scientists, 8th e., Pearson Edu.
Chap 10-1
One- and Two-Sample Test of Hypotheses
Chapter 10
Walpole,Probability and Statistics for Engineers & Scientists, 8th e., Pearson Edu. Chap 10-2
Hypothesis Testing Content
Formulate null and alternative hypotheses and
decision rules
Type I and Type II errors
Single Sample: Testing Population Mean,
Two Sample: Testing Difference two means
Tests on Proportion, p
Tests on Variance,
2

Goodness-of-Fit Test
Test for Independence
What is a Hypothesis?
A hypothesis is a claim
(assumption) about a
population parameter:

population mean

population proportion

Example: The mean monthly cell phone bill
of this city is = $42
Example: The proportion of adults in this
city with cell phones is p = .68
The Null Hypothesis, H
0
States the assumption (numerical) to be
tested
Example: The average number of TV sets in
homes is equal to three ( )
Is always about a population parameter,
not about a sample statistic
3 : H
0
=
3 : H
0
= 3 X : H
0
=
The Null Hypothesis, H
0
Begin with the assumption that the null
hypothesis is true
Similar to the notion of innocent until
proven guilty
Refers to the status quo
Always contains = , or > sign
May or may not be rejected
(continued)
The Alternative Hypothesis, H
1
Is the opposite of the null hypothesis
e.g., The average number of TV sets in homes
is not equal to 3 ( H
1
: 3 )
Challenges the status quo
Never contains the = , or > sign
May or may not be proven
Is generally the hypothesis that the
researcher is trying to prove
Population
Claim: the
population
mean age is 50.
(Null Hypothesis:
REJECT
Suppose
the sample
mean age
is 20: X = 20
Sample
Null Hypothesis
20
likely if = 50? =
Is
Hypothesis Testing Process
If not likely,
Now select a
random sample
H
0
: = 50 )
X
Sampling Distribution of X
= 50
If H
0
is true
If it is unlikely that
we would get a
sample mean of
this value ...
... then we
reject the null
hypothesis that
= 50.
Reason for Rejecting H
0
20
... if in fact this were
the population mean
X
Level of Significance, o
Defines the unlikely values of the sample
statistic if the null hypothesis is true
Defines rejection region of the sampling
distribution
Is designated by o , (level of significance)
Typical values are .01, .05, or .10
Is selected by the researcher at the beginning
Provides the critical value(s) of the test
Level of Significance
and the Rejection Region
H
0
: 3
H
1
: < 3
0
H
0
: 3
H
1
: > 3
o
o
Represents
critical value
Lower-tail test
Level of significance =
o
0
Upper-tail test
Two-tail test
Rejection
region is
shaded
/2
0
o
/2
o
H
0
: = 3
H
1
: 3
Errors in Making Decisions
Type I Error
Reject a true null hypothesis
Considered a serious type of error

The probability of Type I Error is o
Called level of significance of the test
Set by researcher in advance
Errors in Making Decisions
Type II Error
Fail to reject a false null hypothesis

The probability of Type II Error is
(continued)
Outcomes and Probabilities
Actual
Situation
Decision
Do Not
Reject
H
0
No error
(1 - )
o
Type II Error
( )
Reject
H
0
Type I Error
( )
o
Possible Hypothesis Test Outcomes
H
0
False H
0
True
Key:
Outcome
(Probability)
No Error
( 1 - )
Type I & II Error Relationship
Type I and Type II errors can not happen at
the same time
Type I error can only occur if H
0
is true
Type II error can only occur if H
0
is false

If Type I error probability ( o ) , then
Type II error probability ( )
Factors Affecting Type II Error
All else equal,
when the difference between
hypothesized parameter and its true value

when o
when
when n
Review: 10 Steps in
Hypothesis Testing
1. State the null hypothesis, H
0
2. State the alternative hypotheses, H
1
3. Choose the level of significance,
4. Choose the sample size, n
5. Determine the appropriate statistical
technique and the test statistic to use
6. Find the critical values and determine the
rejection region(s)
Review: 10 Steps in
Hypothesis Testing
7. Collect data and compute the test statistic
from the sample result

8. Compare the test statistic to the critical
value to determine whether the test statistics
falls in the region of rejection

9. Make the statistical decision: Reject H
0
if the
test statistic falls in the rejection region
10. Express the decision in the context of the
problem
Hypothesis Tests for the Mean
o Known o Unknown
Hypothesis
Tests for
10.5 Single Sample: Test of Hypothesis
for Single Mean ( Known)
Convert sample statistic ( ) to a Z test statistic

X
The test statistic is:
n
X
Z
=
Known Unknown
Hypothesis
Tests for
Critical Value
Approach to Testing
For two tailed test for the mean, known:
Convert sample statistic ( ) to test statistic (Z
statistic )
Determine the critical Z values for a specified
level of significance o from a table or
computer
Decision Rule: If the test statistic falls in the
rejection region, reject H
0
; otherwise do not
reject H
0

X
Hypothesis Testing Example
Test the claim that the true mean # of TV
sets in homes is equal to 3.
(Assume = 0.8)
1-2. State the appropriate null and alternative
hypotheses
H
0
: = 3 H
1
: 3 (This is a two tailed test)
3. Specify the desired level of significance
Suppose that o = .05 is chosen for this test
4. Choose a sample size
Suppose a sample of size n = 100 is selected
2.0
.08
.16
100
0.8
3 2.84
n
X
Z =
=
5. Determine the appropriate technique
is known so this is a Z test
6. Set up the critical values
For o = .05 the critical Z values are 1.96
7. Collect the data and compute the test statistic
Suppose the sample results are
n = 100, X = 2.84 ( = 0.8 is assumed known)
So the test statistic is:
(continued)
Reject H
0
Do not reject H
0
8. Is the test statistic in the rejection region?
o = .05/2
-Z= -1.96
0

Reject H
0
if
Z < -1.96 or
Z > 1.96;
otherwise
do not
reject H
0
(continued)
o = .05/2
Reject H
0
+Z= +1.96
Here, Z = -2.0 < -1.96, so the
test statistic is in the rejection
region

9-10. Reach a decision and interpret the result
-2.0
Since Z = -2.0 < -1.96, we reject the null hypothesis
and conclude that there is sufficient evidence that the
mean number of TVs in US homes is not equal to 3
(continued)
Reject H
0
Do not reject H
0
o = .05/2
-Z= -1.96
0

o = .05/2
Reject H
0
+Z= +1.96
p-Value Approach to Testing
p-value: Probability of obtaining a test
statistic more extreme ( or > ) than the
observed sample value given H
0
is true
Also called observed level of significance
Smallest value of o for which H
0
can be
rejected
p-Value Approach to Testing
Convert Sample Statistic (e.g., ) to Test
Statistic (e.g., Z statistic )
Obtain the p-value from a table or computer
Compare the p-value with o
If p-value < o , reject H
0

If p-value > o , do not reject H
0

X
(continued)
.0228
o/2 = .025
p-Value Example
Example: How likely is it to see a sample mean of
2.84 (or something further from the mean, in either
direction) if the true mean is = 3.0?
-1.96 0

-2.0
.0228 2.0) P(Z
.0228 2.0) P(Z
= >
= <
Z

1.96
2.0
X = 2.84 is translated
to a Z score of Z = -2.0
p-value
=.0228 + .0228 = .0456
.0228
o/2 = .025
Compare the p-value with o
If p-value < o , reject H
0

If p-value > o , do not reject H
0

Here: p-value = .0456
o = .05
Since .0456 < .05, we
reject the null
hypothesis
(continued)
p-Value Example
.0228
o/2 = .025
-1.96 0

-2.0
Z

1.96
2.0
.0228
o/2 = .025
Connection to Confidence Intervals
For X = 2.84, = 0.8 and n = 100, the 95%
confidence interval is:

2.6832 2.9968

Since this interval does not contain the hypothesized
mean (3.0), we reject the null hypothesis at o = .05
100
0.8
(1.96) 2.84 to
100
0.8
(1.96) - 2.84 +
Do not reject H
0
Reject H
0
Reject H
0
There are two
cutoff values
(critical values),
defining the
regions of
rejection
Two-Tail Tests
o/2
-Z

0

H
0
: = 3
H
1
: = 3
+Z

o/2
Lower
critical
value
Upper
critical
value
3

Z

X

One-Tail Tests
In many cases, the alternative hypothesis
focuses on a particular direction
H
0
: 3
H
1
: < 3
H
0
: 3
H
1
: > 3
This is a lower-tail test since the
alternative hypothesis is focused on
the lower tail below the mean of 3
This is an upper-tail test since the
alternative hypothesis is focused on
the upper tail above the mean of 3
Reject H
0
Do not reject H
0
There is only one
critical value, since
the rejection area is
in only one tail
Lower-Tail Tests
o
-Z
0

H
0
: 3
H
1
: < 3
Z

X

Critical value
Reject H
0
Do not reject H
0
Upper-Tail Tests
o
Z
0

H
0
: 3
H
1
: > 3
There is only one
critical value, since
the rejection area is
in only one tail
Critical value
Z

X

Example: Upper-Tail Z Test
for Mean (o Known)
A phone industry manager thinks that
customer monthly cell phone bill have
increased, and now average over $52 per
month. The company wishes to test this
claim. (Assume o = 10 is known)
H
0
: 52 the average is not over $52 per month
H
1
: > 52 the average is greater than $52 per month
(i.e., sufficient evidence exists to support the
managers claim)
Form hypothesis test:
Reject H
0
Do not reject H
0
Suppose that o = .10 is chosen for this test

Find the rejection region:
o = .10
1.28
0

Reject H
0
Reject H
0
if Z > 1.28
Example: Find Rejection Region
(continued)
Review:
One-Tail Critical Value
Z .07 .09
1.1 .8790 .8810 .8830
1.2
.8980 .9015
1.3 .9147 .9162 .9177
z
0 1.28
.08
Standard Normal
Distribution Table (Portion)
What is Z given o = 0.10?
o = .10
Critical Value
= 1.28
.90
.8997
.10
.90
Obtain sample and compute the test statistic

Suppose a sample is taken with the following
results: n = 64, X = 53.1 (o=10 was assumed known)
Then the test statistic is:
0.88
64
10
52 53.1
n
X
Z =
=
Example: Test Statistic
(continued)
Reject H
0
Do not reject H
0
Example: Decision
o = .10
1.28
0

Reject H
0
Do not reject H
0
since Z = 0.88 1.28
i.e.: there is not sufficient evidence that the
mean bill is over $52
Z = .88
Reach a decision and interpret the result:
(continued)
Reject H
0
o = .10
Do not reject H
0
1.28
0

Reject H
0
Z = .88
Calculate the p-value and compare to o
(assuming that = 52.0)
(continued)
.1894
.8106 1 0.88) P(Z
64 10/
52.0 53.1
Z P
53.1) X P(
=
= > =
|
.
|
\
|
> =
>
p-value = .1894
p -Value Solution
Do not reject H
0
since p-value = .1894 > o = .10
10.7 Single Sample: Test of Hypothesis
for Single Mean ( Unknown)
Convert sample statistic ( ) to a t test statistic

X
n
S
X
t
1 - n
=
Known Unknown
Hypothesis
Tests for
Example: Two-Tail Test (o Unknown)
The average cost of a
hotel room in New York
is said to be $168 per
night. A random sample
of 25 hotels resulted in
X = $172.50 and
S = $15.40. Test at the
o = 0.05 level.
(Assume the population distribution is normal)
H
0
: = 168
H
1
: = 168
o = 0.05
n = 25
o is unknown, so
use a t statistic
Critical Value:
t
24
= 2.0639
Solution: Two-Tail Test
Do not reject H
0
: not sufficient evidence that
true mean cost is different than $168
Reject H
0
Reject H
0
o/2=.025
-t
n-1,/2
Do not reject H
0
0

o/2=.025
-2.0639
2.0639
1.46
25
15.40
168 172.50
n
S
X
t
1 n
=
1.46
H
0
: = 168
H
1
: = 168
t
n-1,/2
Connection to Confidence Intervals
For X = 172.5, S = 15.40 and n = 25, the 95%
confidence interval is:

172.5 - (2.0639) 15.4/ 25 to 172.5 + (2.0639) 15.4/ 25

166.14 178.86

Since this interval contains the Hypothesized mean (168),
we do not reject the null hypothesis at o = .05
10.8 Two Samples: Tests on Two
Means
Population means,
independent
samples
1
and
2
known
1
and
2
unknown
Goal: Test hypotheses or form
a confidence interval for the
difference between two
population means,
1

2

The point estimate for the
difference is
X
1
X
2
*
Independent Samples
Population means,
independent
samples
Different data sources
Unrelated
Independent
Sample selected from one
population has no effect on
the sample selected from
the other population
Use the difference between 2
sample means
Use Z test or pooled variance
t test
*
1
and
2
known
1
and
2
unknown
Difference Between Two Means
Population means,
independent
samples
1
and
2
known
1
and
2
unknown
*
Use a Z test statistic
Use S to estimate unknown
, use a t test statistic and
pooled standard deviation
Population means,
independent
samples
1
and
2
known
1
and
2
Known
Assumptions:

Samples are randomly and
independently drawn

population distributions are
normal or both sample sizes
are > 30

Population standard
deviations are known
*
1
and
2
unknown
Population means,
independent
samples
1
and
2
known
and the standard error of
X
1
X
2
is
When
1
and
2
are known and
both populations are normal or
both sample sizes are at least 30,
the test statistic is a Z-value
2
2
2
1
2
1
X X
n
2 1
+ =
(continued)
1
and
2
Known
*
1
and
2
unknown
Population means,
independent
samples
1
and
2
known
( ) ( )
2
2
2
1
2
1
2 1
2 1
n
X X
Z
+

=
The test statistic for
1

2
is:
1
and
2
Known
*
1
and
2
unknown
(continued)
Hypothesis Tests for
Two Population Means
Lower-tail test:

H
0
:
1
>
2

H
1
:
1
<
2

i.e.,

H
0
:
1

2
> 0
H
1
:
1

2
< 0
Upper-tail test:

H
0
:
1

2
H
1
:
1
>
2
i.e.,

H
0
:
1

2
0
H
1
:
1

2
> 0
Two-tail test:

H
0
:
1
=
2
H
1
:
1

2
i.e.,

H
0
:
1

2
= 0
H
1
:
1

2
0
Two Population Means, Independent Samples
Two Population Means, Independent Samples
Lower-tail test:

H
0
:
1

2
> 0
H
1
:
1

2
< 0
Upper-tail test:

H
0
:
1

2
0
H
1
:
1

2
> 0
Two-tail test:

H
0
:
1

2
= 0
H
1
:
1

2
0
o o/2 o/2 o
-z
o
-z
o/2
z
o
z
o/2
Reject H
0
if Z < -Z
o
Reject H
0
if Z > Z
o
Reject H
0
if Z < -Z
o/2

or Z > Z
o/2

Hypothesis tests for
1

2

Population means,
independent
samples
1
and
2
known
1
and
2
Unknown
Assumptions:

Samples are randomly and
independently drawn

Populations are normally
distributed or both sample
sizes are at least 30

Population variances are
unknown but assumed equal

*
1
and
2
unknown
Population means,
independent
samples
1
and
2
known
1
and
2
Unknown
(continued)
*
1
and
2
unknown
Forming interval
estimates:

The population variances
are assumed equal, so use
the two sample standard
deviations and pool them to
estimate

the test statistic is a t value
with (n
1
+ n
2
2) degrees
of freedom
Population means,
independent
samples
1
and
2
known
1
and
2
Unknown
The pooled standard
deviation is
(continued)
( ) ( )
1) n ( ) 1 (n
S 1 n S 1 n
S
2 1
2
2 2
2
1 1
p
+
+
=
*
1
and
2
unknown
Population means,
independent
samples
1
and
2
known
1
and
2
Unknown
Where t has (n
1
+ n
2
2) d.f.,
and
( ) ( )
|
|
.
|
\
|
+

=
2 1
2
p
2 1
2 1
n
1
n
1
S
X X
t
1

2
is:
*
1
and
2
unknown
( ) ( )
1) n ( ) 1 (n
S 1 n S 1 n
S
2 1
2
2 2
2
1 1
2
p
+
+
=
(continued)
Pooled S
p
t-Test: Example
You are a financial analyst for a brokerage firm. Is there
a difference in dividend yield between stocks listed on the
NYSE & NASDAQ? You collect the following data:
NYSE NASDAQ
Number 21 25
Sample mean 3.27 2.53
Sample std dev 1.30 1.16
Assuming both populations are
approximately normal with
equal variances, is
there a difference in average
yield (o = 0.05)?
Calculating the Test Statistic
( ) ( ) ( ) ( )
1.5021
1) 25 ( 1) - (21
1.16 1 25 1.30 1 21
1) n ( ) 1 (n
S 1 n S 1 n
S
2 2
2 1
2
2 2
2
1 1
2
p
=
+
+
=
+
+
=
( ) ( ) ( )
2.040
25
1
21
1
5021 . 1
0 2.53 3.27
n
1
n
1
S
X X
t
2 1
2
p
2 1
2 1
=
|
.
|
\
|
+

=
|
|
.
|
\
|
+

=
Solution
H
0
:
1
-
2
= 0 i.e. (
1
=
2
)
H
1
:
1
-
2
0 i.e. (
1

2
)
o = 0.05
df = 21 + 25 - 2 = 44
Critical Values: t = 2.0154

Test Statistic:
Decision:

Conclusion:

Reject H
0
at o = 0.05
There is evidence of a
difference in means.
t
0
2.0154 -2.0154
.025
Reject H
0
Reject H
0
.025
2.040
2.040
25
1
21
1
5021 . 1
2.53 3.27
t =
|
.
|
\
|
+
=
Paired Observations
Tests Means of 2 Related Populations
Paired or matched samples
Repeated measures (before/after)
Use difference between paired values:

Eliminates Variation Among Subjects
Assumptions:
Both Populations Are Normally Distributed
Or, if Not Normal, use large samples
Related
samples
D = X
1
- X
2
Mean Difference,
D
Known

The i
th
paired difference is D
i
, where
Related
samples
D
i
= X
1i
- X
2i
The point estimate for
the population mean
paired difference is D :
n
D
D
n
1 i
i
=
=
Suppose the population
standard deviation of the
difference scores,
D
, is known
n is the number of pairs in the paired sample
The test statistic for the mean
difference is a Z value:
Paired
samples
n
D
Z
D
D
=
Mean Difference,
D
Known
(continued)
Where

D
= hypothesized mean difference

D
= population standard dev. of differences
n = the sample size (number of pairs)

Confidence Interval,
D
Known
The confidence interval for D is
Paired
samples
n
Z D
D
Where
n = the sample size
(number of pairs in the paired sample)
If
D
is unknown, we can estimate the
unknown population standard deviation
with a sample standard deviation:

Related
samples
1 n
) D (D
S
n
1 i
2
i
D
=
The sample standard
deviation is
Mean Difference,
D
Unknown
The test statistic for D is now a
t statistic, with n-1 d.f.:
Paired
samples
1 n
) D (D
S
n
1 i
2
i
D
=
n
S
D
t
D
D
=
Where t has n - 1 d.f.
and S
D
is:
Mean Difference,
D
Unknown
(continued)
The confidence interval for D is
Paired
samples
1 n
) D (D
S
n
1 i
2
i
D
=
n
S
t D
D
1 n
where
Confidence Interval,
D
Unknown
Lower-tail test:

H
0
:
D
> 0
H
1
:
D
< 0
Upper-tail test:

H
0
:
D
0

H
1
:
D
> 0

Two-tail test:

H
0
:
D
= 0

H
1
:
D
0
Paired Samples
Hypothesis Testing for
Mean Difference,
D
Unknown

o o/2 o/2 o
-t
o
-t
o/2
t
o
t
o/2
Reject H
0
if t < -t
o
Reject H
0
if t > t
o
Reject H
0
if t < -t
o/2

or t > t
o/2

Where t has n - 1 d.f.
Assume you send your salespeople to a customer
service training workshop. Is the training effective?
You collect the following data:

Paired Samples Example
Number of Complaints: (2) - (1)
Salesperson Before (1) After (2) Difference, D
i

C.B. 6 4 - 2
T.F. 20 6 -14
M.H. 3 2 - 1
R.K. 0 0 0
M.O. 4 0 - 4
-21
D =
E
D
i

n
5.67
1 n
) D (D
S
2
i
D
=
= -4.2
Has the training made a difference in the number of
complaints (at the 0.01 level)?
- 4.2 D =
1.66
5 5.67/
0 4.2
n / S
D
t
D
D
=

=
=
H
0
:
D
= 0
H
1
:
D
= 0
Test Statistic:
Critical Value = 4.604
d.f. = n - 1 = 4
Reject
o/2
- 4.604 4.604
Decision: Do not reject H
0
(t stat is not in the reject region)
Conclusion: There is not a
significant change in the
number of complaints.
Paired Samples: Solution
Reject
o/2
- 1.66
o = .01
10.11 One Sample: Test on Proportion
Involves categorical variables
Two possible outcomes
Success (possesses a certain characteristic)
Failure (does not possesses that characteristic)
Fraction or proportion of the population in the
success category is denoted by p
Proportions
Sample proportion in the success category is
denoted by p
s

When both np and n(1-p) are at least 5, p
s

can be approximated by a normal distribution
with mean and standard deviation

size sample
sample in successes of number
n
X
ps = =
p s p =
n
p) p(1
s p
=
(continued)
The sampling
distribution of p
s

is approximately
normal, so the test
statistic is a Z
value:
Hypothesis Tests for Proportions
n
) p ( p
p p
Z
s
=
1
np > 5
and
n(1-p) > 5
Hypothesis
Tests for p
np < 5
or
n(1-p) < 5
-Binomial dist., if p is common.
-Poisson dist., If p is very close
to 0 or 1.
Example: Z Test for Proportion
A marketing company
claims that it receives
8% responses from its
mailing. To test this
claim, a random sample
of 500 were surveyed
with 25 responses. Test
at the o = .05
significance level.
Check:
n p = (500)(.08) = 40
n(1-p) = (500)(.92) = 460

Z Test for Proportion: Solution
o = .05
n = 500, p
s
= .05
Reject H
0
at o = .05
H
0
: p = .08
H
1
: p = .08
Critical Values: 1.96
Test Statistic:
Decision:
Conclusion:
z
0
Reject Reject
.025 .025
1.96
-2.47
There is sufficient
evidence to reject the
companys claim of 8%
response rate.
2.47
500
.08) .08(1
.08 .05
n
p) p(1
p p
Z
s
=
=
-1.96
Do not reject H
0
Reject H
0
Reject H
0
o/2 = .025
1.96
0

Z = -2.47
Calculate the p-value and compare to o
(For a two sided test the p-value is always two sided)
(continued)
0.0136 2(.0068)
2.47) P(Z 2.47) P(Z
= =
> + s
p-value = .0136:
p-Value Solution
Reject H
0
since p-value = .0136 < o = .05
Z = 2.47
-1.96
o/2 = .025
.0068 .0068
10.12 Two Population Proportions
Goal: test a hypothesis or form a
confidence interval for the difference
between two population proportions,
p
1
p
2

The point estimate for
the difference is
Population
proportions
Assumptions:
n
1
p
1
> 5 , n
1
(1-p
1
) > 5
n
2
p
2
> 5 , n
2
(1-p
2
) > 5
2 1
s s
p p
Two Population Proportions
Population
proportions
2 1
2 1
n n
X X
p
+
+
=
The pooled estimate for the
overall proportion is:
where X
1
and X
2
are the numbers from
samples 1 and 2 with the characteristic of
interest
Since we begin by assuming the null
hypothesis is true, we assume p
1
= p
2

and pool the two p
s
estimates
Population
proportions
( ) ( )
|
|
.
|
\
|
+

=
2 1
2 1 s s
n
1
n
1
) p 1 ( p
p p p p
Z
2 1
p
1
p
2
is a Z statistic:
(continued)
2
2
s
1
1
s
2 1
2 1
n
X
p ,
n
X
p ,
n n
X X
p
2 1
= =
+
+
= where
Population proportions
Lower-tail test:

H
0
: p
1
> p
2

H
1
: p
1
< p
2

i.e.,

H
0
: p
1
p
2
> 0
H
1
: p
1
p
2
< 0
Upper-tail test:

H
0
: p
1
p
2
H
1
: p
1
> p
2
i.e.,

H
0
: p
1
p
2
0
H
1
: p
1
p
2
> 0
Two-tail test:

H
0
: p
1
= p
2
H
1
: p
1
p
2
i.e.,

H
0
: p
1
p
2
= 0
H
1
: p
1
p
2
0
Population proportions
Lower-tail test:

H
0
: p
1
p
2
> 0
H
1
: p
1
p
2
< 0
Upper-tail test:

H
0
: p
1
p
2
0
H
1
: p
1
p
2
> 0
Two-tail test:

H
0
: p
1
p
2
= 0
H
1
: p
1
p
2
0
o o/2 o/2 o
-z
o
-z
o/2
z
o
z
o/2
Reject H
0
if Z < -Z
o
Reject H
0
if Z > Z
o
Reject H
0
if Z < -Z
o/2

or Z > Z
o/2

(continued)
Example:
Two population Proportions
Is there a significant difference between the
proportion of men and the proportion of
women who will vote Yes on Proposition A?

In a random sample, 36 of 72 men and 31 of
50 women indicated they would vote Yes

Test at the .05 level of significance
The hypothesis test is:

H
0
: p
1
p
2
= 0 (the two proportions are equal)
H
1
: p
1
p
2
0 (there is a significant difference between proportions)
The sample proportions are:
Men: p
s1
= 36/72 = .50
Women: p
s2
= 31/50 = .62
.549
122
67
50 72
31 36
n n
X X
p
2 1
2 1
= =
+
+
=
+
+
=
The pooled estimate for the overall proportion is:
Example:
(continued)
The test statistic for p
1
p
2
is:
Example:
(continued)
.025
-1.96

1.96

.025
-1.31

Decision: Do not reject H
0

Conclusion: There is not
significant evidence of a
difference in proportions
who will vote yes between
men and women.
( ) ( )
( ) ( )
1.31
50
1
72
1
.549) (1 .549
0 .62 .50
n
1
n
1
) p (1 p
p p p p
z
2 1
2 1 s s
2 1
=
|
.
|
\
|
+

=
|
|
.
|
\
|
+

=
Reject H
0
Reject H
0
Critical Values = 1.96
For o = .05
10.13 Tests 0n Variances
where:

o
2
= value of
2
given by the null hypotheses.
n = sample size.

(Assumed: the null hypothesis H
o
that the
population variance equals a spesified value
o
2

2
0
2
2
) 1 (
o
_
s n
=
The Chi-square test statistic is:
Decision Rule
_
2

_
2
U
Decision Rule:
If _
2
> _
2
U
, reject H
0
,
otherwise, do not
reject H
0
The _
2
test statistic approximately follows a chi-
squared distribution with one degree of freedom
0
o

Reject H
0
Do not
reject H
0
Two-Sample Tests for Variances
Tests for Two
Population
Variances
F test statistic
H
0
:
1
2
=
2
2

H
1
:
1
2

2
2

Two-tail test
Lower-tail test
Upper-tail test
H
0
:
1
2
>
2
2

H
1
:
1
2
<
2
2

H
0
:
1
2

2
2

H
1
:
1
2
>
2
2

*
Hypothesis Tests for Variances
Tests for Two
Population
Variances
F test statistic
2
2
2
1
S
S
F =
The F test statistic is:
= Variance of Sample 1
n
1
- 1 = numerator degrees of freedom
n
2
- 1 = denominator degrees of freedom
= Variance of Sample 2
2
1
S
2
2
S
*
(continued)
The F critical value is found from the F table
The are two appropriate degrees of freedom:
numerator and denominator

In the F table,
numerator degrees of freedom determine the column
denominator degrees of freedom determine the row
The F Distribution
where df
1
= n
1
1 ; df
2
= n
2
1
2
2
2
1
S
S
F =
F 0
Finding the Rejection Region
L
2
2
2
1
U
2
2
2
1
F
S
S
F
F
S
S
F
< =
> = rejection
region for a
two-tail test is:
o

F
L

Reject
H
0
Do not
reject H
0
F
0
o

F
U

Reject H
0
Do not
reject H
0
F 0
o/2

Reject H
0
Do not
reject H
0
F
U

H
0
:
1
2
=
2
2

H
1
:
1
2

2
2

H
0
:
1
2
>
2
2

H
1
:
1
2
<
2
2

H
0
:
1
2

2
2

H
1
:
1
2
>
2
2

F
L

o/2

Reject
H
0
Reject H
0
if F < F
L
Reject H
0
if F > F
U
Finding the Rejection Region
F 0
o/2

Reject H
0
Do not
reject H
0
F
U

H
0
:
1
2
=
2
2

H
1
:
1
2

2
2

F
L

o/2

Reject
H
0
(continued)
2. Find F
L
using the formula:
Where F
U*
is from the F table
with n
2
1 numerator and n
1
1
denominator degrees of freedom
(i.e., switch the d.f. from F
U
)

* U
L
F
1
F =
1. Find F
U
from the F table
for n
1
1 numerator and
n
2
1 denominator
degrees of freedom
To find the critical F values:

F Test: An Example
You are a financial analyst for a brokerage firm. You
want to compare dividend yields between stocks listed
on the NYSE & NASDAQ. You collect the following data:
NYSE NASDAQ
Number 21 25
Mean 3.27 2.53
Std dev 1.30 1.16

Is there a difference in the
variances between the NYSE
& NASDAQ at the o = 0.05 level?
F Test: Example Solution
Form the hypothesis test:
H
0
:
2
1

2
2
= 0 (there is no difference between variances)
H
1
:
2
1

2
2
0 (there is a difference between variances)

Numerator:
n
1
1 = 21 1 = 20 d.f.
Denominator:
n
2
1 = 25 1 = 24 d.f.

F
U
= F
.025, 20, 24
= 2.33
Find the F critical values for o = .05:

Numerator:
n
2
1 = 25 1 = 24 d.f.
Denominator:
n
1
1 = 21 1 = 20 d.f.

F
L
= 1/F
.025, 24, 20
= 1/2.41
= .41
F
U
: F
L
:
0
256 . 1
16 . 1
30 . 1
S
S
F
2
2
2
2
2
1
= = =
o/2 = .025

F
U
=2.33
Reject H
0
Do not
reject H
0
H
0
:
1
2
=
2
2

H
1
:
1
2

2
2

F Test: Example Solution
F = 1.256 is not in the rejection
region, so we do not reject H
0

(continued)
Conclusion: There is not sufficient evidence
of a difference in variances at o = .05

F
L
=0.41
o/2 = .025

Reject H
0
F
10.14 Goodness-of-Fit Test
where:
f
o
= observed frequency in a particular cell
f
e
= expected frequency in a particular cell if H
0
is true

_
2
for the 2 x 2 case has 1 degree of freedom

(Assumed: each cell in the contingency table has expected
frequency of at least 5)
= _
cells all
e
2
e o
2
f
) f f (
Decision Rule
_
2

_
2
U
Decision Rule:
If _
2
> _
2
U
, reject H
0
,
otherwise, do not
reject H
0
The _
2
test statistic approximately follows a chi-
squared distribution with one degree of freedom
0
o

Reject H
0
Do not
reject H
0
Computing the Average Proportion
Here:

120 Females, 12
were left handed
180 Males, 24 were
left handed
i.e., the proportion of left handers overall is 12%
n
X
n n
X X
p
2 1
2 1
=
+
+
=
12 . 0
300
36
180 120
24 12
p = =
+
+
=
The average
proportion is:

Finding Expected Frequencies
To obtain the expected frequency for left handed
females, multiply the average proportion left handed (p)
by the total number of females
To obtain the expected frequency for left handed males,
multiply the average proportion left handed (p) by the
total number of males
If the two proportions are equal, then

P(Left Handed | Female) = P(Left Handed | Male) = .12

i.e., we would expect (.12)(120) = 14.4 females to be left handed
(.12)(180) = 21.6 males to be left handed
Observed vs. Expected Frequencies

Gender
Hand Preference
Left Right
Female
Observed = 12
Expected = 14.4
Observed = 108
Expected = 105.6
120
Male
Observed = 24
Expected = 21.6
Observed = 156
Expected = 158.4
180
36 264 300

Gender
Hand Preference
Left Right
Female
Observed = 12
Expected = 14.4
Observed = 108
Expected = 105.6
120
Male
Observed = 24
Expected = 21.6
Observed = 156
Expected = 158.4
180
36 264 300
6848 . 0
4 . 158
) 4 . 158 156 (
6 . 21
) 6 . 21 24 (
6 . 105
) 6 . 105 108 (
4 . 14
) 4 . 14 12 (
f
) f f (
2 2 2 2
cells all
e
2
e o
2
=
= _
Chi-Square Test Statistic

Decision Rule
Decision Rule:
If _
2
> 3.841, reject H
0
,
otherwise, do not reject H
0

3.841 d.f. 1 with , 6848 . 0 is statistic test The
2
U
2
= _ = _
Here,
_
2
= 0.6848 < _
2
U
= 3.841,
so we do not reject H
0

and conclude that there is
not sufficient evidence
that the two proportions
are different at o = .05
_
2

_
2
U
=3.841

0
o

Reject H
0
Do not
reject H
0
10.15 Test for Independence
Similar to the _
2
test for equality of more than
two proportions, but extends the concept to
contingency tables with r rows and c columns
H
0
: The two categorical variables are independent
(i.e., there is no relationship between them)
H
1
: The two categorical variables are dependent
(i.e., there is a relationship between them)
_
2
Test of Independence
where:
f
o
= observed frequency in a particular cell of the r x c table
f
e
0
is true

_
2
for the r x c case has (r-1)(c-1) degrees of freedom

= _
cells all
e
2
e o
2
f
) f f (
(continued)
Expected Cell Frequencies
Expected cell frequencies:
n
total column total row
f
e
=
Where:
row total = sum of all frequencies in the row
column total = sum of all frequencies in the column
n = overall sample size
Decision Rule
The decision rule is
If _
2
> _
2
U
, reject H
0
,
0
Where _
2
U
is from the chi-squared distribution
with (r 1)(c 1) degrees of freedom
Example
The meal plan selected by 200 students is shown below:
Class
Standing
Number of meals per week
Total
20/week 10/week none
Fresh. 24 32 14 70
Soph. 22 26 12 60
Junior 10 14 6 30
Senior 14 16 10 40
Total 70 88 42 200
Example
The hypothesis to be tested is:
(continued)
H
0
: Meal plan and class standing are independent
(i.e., there is no relationship between them)
H
1
: Meal plan and class standing are dependent
(i.e., there is a relationship between them)
Class
Standing
Number of meals
per week

Total 20/wk 10/wk none
Fresh. 24 32 14 70
Soph. 22 26 12 60
Junior 10 14 6 30
Senior 14 16 10 40
Total 70 88 42 200
Class
Standing
Number of meals
per week
Total 20/wk 10/wk none
Fresh. 24.5 30.8 14.7 70
Soph. 21.0 26.4 12.6 60
Junior 10.5 13.2 6.3 30
Senior 14.0 17.6 8.4 40
Total 70 88 42 200
Observed:
Expected cell
frequencies if H
0
is true:
5 . 10
200
70 30
n
total column total row
f
e
=
=
Example for one cell:
Example:
Expected Cell Frequencies
(continued)
Example: The Test Statistic
The test statistic value is:
709 . 0
4 . 8
) 4 . 8 10 (
8 . 30
) 8 . 30 32 (
5 . 24
) 5 . 24 24 (
f
) f f (
2 2 2
cells all
e
2
e o
2
=
+ +
= _
(continued)
_
2
U
= 12.592 for = .05 from the chi-squared
distribution with (4 1)(3 1) = 6 degrees of
freedom
Example:
Decision and Interpretation
(continued)
Decision Rule:
If _
2
> 12.592, reject H
0
,
0

12.592 d.f. 6 with , 709 . 0 is statistic test The
2
U
2
= _ = _
Here,
_
2
= 0.709 < _
2
U
= 12.592,
so do not reject H
0

Conclusion: there is not
sufficient evidence that meal
plan and class standing are
related at o = .05
_
2

_
2
U
=12.592

0
o

Reject H
0
Do not
reject H
0
Extend the _
2
test to the case with more than
two independent populations:

10.17 Testing for Proportions
H
0
: p
1
= p
2
= = p
c

H
1
: Not all of the p
j
are equal (j = 1, 2, , c)
The Chi-Square Test Statistic
where:
f
o
= observed frequency in a particular cell of the 2 x c table
f
e
0
is true

_
2
for the 2 x c case has (2-1)(c-1) = c - 1 degrees of freedom

= _
cells all
e
2
e o
2
f
) f f (
Computing the Overall Proportion
n
X
n n n
X X X
p
c 2 1
c 2 1
=
+ + +
+ + +
=
The overall
proportion is:

Expected cell frequencies for the c categories
are calculated as in the 2 x 2 case, and the
decision rule is the same:
Decision Rule:
If _
2
> _
2
U
, reject H
0
,
otherwise, do not
reject H
0
Where _
2
U
is from the
chi-squared distribution
with c 1 degrees of
freedom

Using PHStat
Options
Sample PHStat Output
Input
Output
Two-Sample Tests in EXCEL
For independent samples:
Independent sample Z test with variances known:
Tools | data analysis | z-test: two sample for means

For paired samples (t test):
Tools | data analysis | t-test: paired two sample for means

For variances
F test for two variances:
Tools | data analysis | F-test: two sample for variances

Two-Sample Tests in PHStat
Input
Output
Input
Output
(continued)
Chapter Summary
Addressed hypothesis testing methodology
Performed Z Test for the mean ( known)
Discussed critical value and pvalue approaches to
hypothesis testing
Performed one-tail and two-tail tests
Performed t test for the mean ( unknown)
Performed Z test for the proportion
Chapter Summary
Compared two independent samples
Performed Z test for the differences in two means
Performed pooled variance t test for the differences in two means
Formed confidence intervals for the differences between two means
Compared two related samples (paired samples)
Performed paired sample Z and t tests for the mean difference
Formed confidence intervals for the paired difference
Compared two population proportions
Formed confidence intervals for the difference between two population
proportions
Performed Z-test for two population proportions
Performed F tests for the difference between two population
variances
Used the F table to find F critical values

Ch10 HypothesisTest One AndTwo

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Walpole,Probability and Statistics for Engineers & Scientists, 8th e., Pearson Edu.

Chi-Square Test Statistic

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