Inferential Statistics

Week 3 - 1
 Estimation Process

Random Sample I am 95%

confident that
μ is between 40
Population Mean & 60.
(mean, μ, is X = 50
unknown)

Sample

Week 3 - 2
 Point Estimate

An important consideration in choosing a

sample statistics as a Point Estimate of the
value of a population parameter is that the
sample statistic be an Unbiased Estimator.
An estimator is unbiased if the expected
value of the sample statistic is the same as
the actual value of the population parameter
it is intended to estimate.

Week 3 - 3
 Interval Estimates

Interval Estimate - A range of values within which

the actual value of the population parameter may
fall.
Interval Limits – the lower and upper values of the
interval estimate.

Lower Upper
Confidence Confidence
Point Estimate Limit
Limit
Width of
confidence interval
Week 3 - 4
 Point Estimates

We can estimate a with a Sample

Population Parameter … Statistic
(a Point Estimate)

Mean μ X
Proportion p ps

Week 3 - 5
 Confidence Interval

 How much uncertainty is associated with a

point estimate of a population parameter?

 An interval estimate provides more

information about a population characteristic
than does a point estimate.
 Such interval estimates are called confidence
intervals.

Week 3 - 6
 Confidence Level

Like the confidence coefficient, this

expresses the degree of certainty that
an interval will include the actual value
of the population parameter, but it is
stated as a percentage. For example, a
0.95 confidence coefficient is
equivalent to a 95% confidence level.

Week 3 - 7
 Accuracy

The difference between the observed

sample statistic and the actual value
of the population parameter being
estimated.
This may also be referred to as
estimation error of sampling error.

Week 3 - 8
 General Formula

 The general formula for all confidence

intervals is:
Point Estimate ± (Critical Value) (Standard Error)

Week 3 - 9
 Confidence Interval for μ
(σ Known)
 Assumptions
 Population standard deviation σ is known

 Population is normally distributed

 If population is not normal, use large sample

 Confidence interval estimate:

σ
X  Z
Note:
2 n
Z is the normal distribution critical value for a
probability of α/2 in each tail
Week 3 - 10
 Finding the Critical Value, Z

 Consider a 95% confidence interval: Z  1.96

1    0.95

α α
 0.025  0.025
2 2

Z units: Z= -1.96 0 Z= 1.96

Lower Upper
X units: Confidence Point
PointEstimate
Estimate Confidence
Limit Limit
Week 3 - 11
 Common Levels of Confidence

 Commonly used confidence levels are 90%,

95%, and 99%
Confidence
Confidence
Coefficient, Z value
Level
1 
80% 0.80 1.28
90% 0.90 1.645
95% 0.95 1.96
98% 0.98 2.33
99% 0.99 2.58
99.8% 0.998 3.08
99.9% 0.999 3.27
Week 3 - 12
 Intervals and Level of Confidence
Sampling Distribution of the Mean

/2 1  /2
x
Intervals μx  μ
extend from x1
σ x2 (1-) x 100%
XZ of intervals
n
to constructed
σ contain μ;
XZ
n () x 100% do
not.
Confidence Intervals
Week 3 - 13
 Example

 A sample of 11 circuits from a large normal

population has a mean resistance of 2.20
ohms. We know from past testing that the
population standard deviation is 0.35 ohms.

 Determine a 95% confidence interval for the

true mean resistance of the population.

Week 3 - 14
 Example

 Solution:
σ
X Z
n
 2.20  1.96 (0.35/ 11)
 2.20  .2068
(1.9932 , 2.4068)
Week 3 - 15
 Interpretation

 We are 95% confident that the true

mean resistance is between 1.9932
and 2.4068 ohms
 Although the true mean may or may
not be in this interval, 95% of intervals
formed in this manner will contain the
true mean
Week 3 - 16
 Confidence Interval for μ
(σ Unknown)

 If the population standard deviation σ is

unknown, we can substitute the sample
standard deviation, S.
 This introduces extra uncertainty, since S
is variable from sample to sample.
 So we use the t distribution instead of the
normal distribution.
Week 3 - 17
 Confidence Interval for μ
(σ Unknown)
(continued)

 Assumptions
 Population standard deviation is unknown
 Population is Normally Distributed
 If population is not normal, use large sample
Use Student’s t Distribution
Confidence Interval Estimate:
S
(where t is the critical value of the t distribution
with n-1 d.f. and an area of α/2 in each tail)
X  t
2
, n -1 n
Week 3 - 18
 Student’s t Distribution

 The t is a family of distributions

 The t value depends on degrees of freedom
(d.f.)
 Number of observations that are free to vary after
sample mean has been calculated

d.f. = n - 1

Week 3 - 19
 Degrees of Freedom (df)
Idea: Number of observations that are free to vary
after sample mean has been calculated
Example: Suppose the mean of 3 numbers is 8.0

Let X1 = 7 If the mean of these three

Let X2 = 8 values is 8.0,
What is X3? then X3 must be 9
(i.e., X3 is not free to vary)
Here, n = 3, so degrees of freedom = n – 1 = 3 – 1 = 2
(2 values can be any numbers, but the third is not free to vary for a
given mean)
Week 3 - 20
 Student’s t Distribution
Note: t Z as n increases

Standard
Normal
(t with df = )

t (df = 13)
t-distributions are bell-shaped
and symmetric, but have
‘fatter’ tails than the normal t (df = 5)

0 t
Week 3 - 21
 Student’s t Table

Upper Tail Area

Let: n = 3
df 0.25 0.10 0.05 df = n - 1 = 2
 =0.10
1 1.000 3.078 6.314 /2 =0.05

2 0.817 1.886 2.920

3 0.765 1.638 2.353 /2 = 0.05

The body of the table

contains t values, not 0
probabilities
2.920 t
Week 3 - 22
 t distribution values
With comparison to the Z value

Confidence t t t Z
Level (10 d.f.) (20 d.f.) (30 d.f.) ____

0.80 1.372 1.325 1.310 1.28

0.90 1.812 1.725 1.697 1.64
0.95 2.228 2.086 2.042 1.96
0.99 3.169 2.845 2.750 2.58

Note: t Z as n increases
Week 3 - 23
 Example

A random sample of n = 25 has X = 50 and

S = 8. Form a 95% confidence interval for μ

 d.f. = n – 1 = 24, so t/2 , n 1  t 0.025,24  2.0639

The confidence interval is

S 8
X  t /2, n-1  50  (2.0639)
n 25
(46.698 , 53.302)

Week 3 - 24
 Confidence Intervals

Confidence
Intervals

Population Population
Mean
Proportion

σ Known σ Unknown

Week 3 - 25
 Confidence Intervals for the
Population Proportion (p)

 An interval estimate for the

population proportion ( p ) can be
calculated by adding an allowance
for uncertainty to the sample
proportion ( ps )

Week 3 - 26
 Confidence Intervals for the
Population Proportion (p)
(continued)

 Recall that the distribution of the sample

proportion is approximately normal if the
sample size is large, with standard deviation
p(1  p)
σp 
n
 We will estimate this with sample data:
ps(1  ps )
n
Week 3 - 27
 Confidence Interval Endpoints
 Upper and lower confidence limits for the
population proportion are calculated with the
formula

ps(1  ps)
ps  Z
where n
 Z is the standard normal value for the level of
confidence desired
 p is the sample proportion
 n is the sample size

Week 3 - 28
 Example

 A random sample of 100 people

shows that 25 are left-handed.
 Form a 95% confidence interval
for the true proportion of left-
handers

Week 3 - 29
 Example
(continued)
 A random sample of 100 people shows that
25 are left-handed. Form a 95% confidence
interval for the true proportion of left-
handers. ps  Z ps(1  ps )
n
(0.25)(0.7 5)
 25/100  1.96
100
 0.25  1.96 (0.0433)
(0.1651 , 0.3349)
Week 3 - 30
 Interpretation
 We are 95% confident that the true
percentage of left-handers in the population
is between
16.51% and 33.49%.

 Although the interval from 0.1651 to 0.3349

may or may not contain the true proportion,
95% of intervals formed from samples of
size 100 in this manner will contain the true
proportion.
Week 3 - 31
Determining Sample Size

Determining
Sample Size

For the For the

Mean Proportion

Week 3 - 32
 Sampling Error

 The required sample size can be found to reach a

desired Margin of Error (e) with a specified level
of confidence (1 - )

 The margin of error is also called Sampling Error

 the amount of imprecision in the estimate of the
population parameter
 the amount added and subtracted to the point estimate to
form the confidence interval

Week 3 - 33
 Determining Sample Size

Determining
Sample Size

For the
Mean Sampling Error
(Margin of Error)
σ σ
XZ eZ
n n

Week 3 - 34
 Determining Sample Size
(continued)

Determining
Sample Size

For the
Mean

σ Z σ
2 2
eZ Now solve
for n to get n 2
n e
Week 3 - 35
 Determining Sample Size
(continued)

 To determine the required sample size for the

mean, you must know:
 The desired level of confidence (1 - ), which
determines the critical Z value
 The acceptable sampling error (margin of
error), e
 The standard deviation, σ

Week 3 - 36
 Required Sample Size Example

If  = 45, what sample size is needed to

estimate the mean within ± 5 with 90%
confidence?

Z σ2 2
(1.645) (45) 2 2
n 2
 2
 219.19
e 5

So the required sample size is n = 220

(Always round up)

Week 3 - 37
 If σ is unknown

 If unknown, σ can be estimated when

using the required sample size formula
 Use a value for σ that is expected to be at
least as large as the true σ

 Select a pilot sample and estimate σ with

the sample standard deviation, S

Week 3 - 38
 Determining Sample Size

Determining
Sample Size

For the
Proportion

ps(1  ps) p(1  p)

ps  Z eZ
n n
Sampling Error
Week 3 - (Margin of Error) 39
 Determining Sample Size
(continued)

Determining
Sample Size

For the
Proportion

p(1  p) Now solve Z 2 p (1  p)

eZ for n to get n 2
n e
Week 3 - 40
 Determining Sample Size
(continued)

 To determine the required sample size for the

proportion, you must know:
 The desired level of confidence (1 - ), which
determines the critical Z value
 The acceptable sampling error (margin of error), e
 The true proportion of “successes”, p
 p can be estimated with a pilot sample, if
necessary (or conservatively use p = 0.50)

Week 3 - 41
 Required Sample Size Example

How large a sample would be necessary to

estimate the true proportion defective in a
large population within ±3%, with 95%
confidence?
(Assume a pilot sample yields ps = 0.12)

Week 3 - 42
 Required Sample Size Example
(continued)

Solution:
For 95% confidence, use Z = 1.96
e = 0.03
ps = 0.12, so use this to estimate p

Z p (1  p) (1.96) (0.12)(1  0.12)

2 2
n 2
 2
 450.74
e (0.03)
So use n = 451
Week 3 - 43
 What is a Hypothesis?

 A hypothesis is a claim
(assumption) about a
population parameter:

 Population Mean
Example: The mean monthly cell phone bill of
this city is μ = RM 42

 Population Proportion
Example: The proportion of adults in this city
with cell phones is p = 0.68
Week 4 -
 Null Hypothesis, H0

 States the assumption (numerical) to be

tested
Example: The average number of TV sets in
Malaysia Homes is equal to three ( H0 : μ  3 )

 Is always about a population parameter,

not about a sample statistic
H0 : μ  3 H0 : X  3

Week 4 -
 Null Hypothesis, H0

 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

Week 4 -
 Alternative Hypothesis, H1

 Is the opposite of the null hypothesis

 e.g., The average number of TV sets in Malasyia
homes is not equal to 3 ( H1: μ ≠ 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

Week 4 -
 Hypothesis Testing Process

Claim: the
Population
Mean age is 50.
Population
(Null Hypothesis: H0: μ = 50 )
Now select a
Random Sample
Is X 20 likely if μ = 50?
If not likely, Suppose
the sample
REJECT mean age Sample
Null Hypothesis is 20: X = 20
Week 3 - 48
 Reason for Rejecting H0

Sampling Distribution of X

X
20 μ = 50
If H0 is true
... then we reject
If it is unlikely that
the null
we would get a
... if in fact this were hypothesis that μ
sample mean of
this value ... the population mean… = 50.
Week 3 - 49
 Level of Significance, 

 Defines the unlikely values of the sample

statistic if the null hypothesis is true
 Defines Rejection Region of the sampling
distribution
 Is designated by  , (level of significance)
 Typical values are 0.01, 0.05, or 0.10
 Is selected by the researcher at the beginning
 Provides the critical value(s) of the test
Week 3 - 50
/2 1– /2

Week 3 - 51
 Level of Significance
and the Rejection Region
Level of significance =  Represents
Critical Value
H0: μ = 3 /2 /2
H1: μ ≠ 3 Rejection
Two-tail test 0 Region is
shaded
H0: μ ≤ 3 
H1: μ > 3 Upper-tail test 0

H0: μ ≥ 3

H1: μ < 3
Lower-tail test 0
Week 3 - 52
 Errors in Making Decisions

 Type I Error
 Reject a true null hypothesis, Ho

 Considered a serious type of error

The probability of Type I Error is 

 Called level of significance of the test
 Set by researcher in advance

Week 3 - 53
 Errors in Making Decisions

 Type II Error
 Fail to reject a false null hypothesis,

Ho
The probability of Type II Error is β

Week 3 - 54
 Outcomes and Probabilities

Possible Hypothesis Test Outcomes

Actual Situation
Decision H0 True H0 False
Do Not
No error Type II Error
Reject
Key: (1 -  ) (β)
Outcome H0
(Probability) Reject Type I Error No Error
H0 () (1-β)

Week 3 - 55
 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 H0 is TRUE
 Type II Error can only occur if H0 is FALSE

If Type I Error probability (  ) , then

Type II Error probability ( β )

Week 3 - 56
 Factors Affecting Type II Error

 All else equal,

 β when the difference between
hypothesized parameter and its true value

 β when 
 β when σ
 β when n
Week 3 - 57
Hypothesis Tests for the Mean

Hypothesis
Tests for 

 Known  Unknown

Week 3 - 58
 Z Test of Hypothesis for the Mean (σ
Known)
 Convert sample statistic ( X ) to a Z test statistic
Hypothesis
Tests for 

σ Known σ Unknown

The test statistic is:

X μ
Z 
σ
n
Week 3 - 59
 Critical Value Approach to Testing

 For two tailed test for the mean, σ known:

 Convert sample statistic ( X ) to test statistic (Z
statistic )
 Determine the critical Z values for a specified
level of significance  from a table or computer
 Decision Rule: If the test statistic falls in the
rejection region, reject H0 ; otherwise do not
reject H0
Week 3 - 60
 Two-Tail Tests

H0: μ = 3
 There are two
H1: μ ≠ 3
cutoff values
(critical values),
defining the /2 /2
regions of
rejection
3 X
Reject H0 Do not reject H0 Reject H0

-Z 0 +Z Z

Lower critical Upper

value critical value
Week 3 - 61
 Review: 10 Steps in Hypothesis Testing

 1. State the null hypothesis, H0

 2. State the alternative hypotheses, H1
 3. Choose the level of significance, α
 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)
Week 3 - 62
 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 statistic
falls in the region of rejection
 9. Make the statistical decision: Reject H0 if the
test statistic falls in the rejection region
 10. Express the decision in the context of the
problem
Week 3 - 63
 Hypothesis Testing Example
Test the claim that the true mean # of TV
sets in Malaysia homes is equal to 3.
(Assume σ = 0.8)
 1-2. State the appropriate null and alternative
hypotheses
 H 0: μ = 3 H1: μ ≠ 3 (This is a two tailed test)
 3. Specify the desired level of significance
 Suppose that  = 0.05 is chosen for this test

 4. Choose a sample size

 Suppose a sample of size n = 100 is selected

Week 3 - 64
 Hypothesis Testing Example(continued)
 5. Determine the appropriate technique
 σ is known so this is a Z test

 6. Set up the critical values

 For  = 0.05 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 (σ = 0.8 is assumed known)

So the test statistic is:
X μ 2.84  3  .16
Z     2.0
σ 0.8 .08
n 100 Week 3 - 65
 Hypothesis Testing Example(continued)
 8. Is the test statistic in the rejection region?

 = 0.05/2  = 0.05/2

Reject H0 Do not reject H0 Reject H0

Reject H0 if
Z < -1.96 or -Z= -1.96 0 +Z= +1.96
Z > 1.96;
otherwise
do not reject Here, Z = -2.0 < -1.96, so the test
H0 statistic is in the rejection region

Week 3 - 66
 Hypothesis Testing Example(continued)
 9-10. Reach a decision and interpret the result

 = 0.05/2  = 0.05/2

Reject H0 Do not reject H0 Reject H0

-Z= -1.96 0 +Z= +1.96

-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 Malaysia homes is not equal to 3
Week 3 - 67
 p-Value Approach to Testing

 p-value: Probability of obtaining a test

statistic more extreme ( ≤ or  ) than the
observed sample value given H0 is
TRUE
 Also called observed level of significance

 Smallest value of  for which H0 can be

rejected
Week 3 - 68
 p-Value Approach to Testing
(continued)

 Convert Sample Statistic (e.g., X ) to Test

Statistic (e.g., Z statistic )
 Obtain the p-value from a table or computer
 Compare the p-value with 
 If p-value <  , reject H0
 If p-value   , do not reject H0

Week 3 - 69
 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?
X = 2.84 is translated to a
Z score of Z = -2.0
/2 = 0.025 /2 = 0.025
P(Z  2.0)  0.0228
0.0228 0.0228
P(Z  2.0)  0.0228

p-value
=0.0228 +0.0228 = 0.0456 -1.96 0 1.96 Z
-2.0 2.0
Week 3 - 70
 p-Value Example (continued)
 Compare the p-value with 
 If p-value <  , reject H0
 If p-value   , do not reject H0

Here: p-value = 0.0456 /2 = 0.025 /2 = 0.025

 = 0.05
0.0228 0.0228
Since 0.0456 < 0.05, we
reject the null
hypothesis
-1.96 0 1.96 Z
-2.0 2.0
Week 3 - 71
 Connection to Confidence Intervals
 For X = 2.84, σ = 0.8 and n = 100, the 95%
confidence interval is:

0.8 0.8
2.84 - (1.96) to 2.84  (1.96)
100 100

2.6832 ≤ μ ≤ 2.9968

 Since this interval does not contain the hypothesized mean

(3.0), we reject the null hypothesis at  = 0.05
Week 3 - 72
 One-Tail Tests

 In many cases, the alternative hypothesis

focuses on a particular direction

This is a LOWER - tail test since the

H0: μ ≥ 3
alternative hypothesis is focused on the
H1: μ < 3 lower tail below the mean of 3

H0: μ ≤ 3 This is an UPPER - tail test since the

alternative hypothesis is focused on the
H1: μ > 3
upper tail above the mean of 3

Week 3 - 73
 Lower-Tail Tests
H0: μ ≥ 3
 There is only one H1 : μ < 3
critical value, since
the rejection area is

in only one tail

Reject H0 Do not reject H0 Z

-Z 0

μ X

Critical value

Week 3 - 74
 Upper-Tail Tests

H0: μ ≤ 3
 There is only one
H1: μ > 3
critical value, since
the rejection area is
in only one tail 

Do not reject H0 Reject H0

Z Zα
0

X μ

Critical value

Week 3 - 75
 Example: Upper-Tail Z Test
for Mean ( Known)
A phone industry manager thinks that customer
monthly cell phone bill have increased, and
now average over RM52 per month. The
company wishes to test this claim. (Assume 
= 10 is known)
Form hypothesis test:
H0: μ ≤ 52 the average is not over RM52 per month
H1: μ > 52 the average is greater than RM52 per month
(i.e., sufficient evidence exists to support the
manager’s claim)

Week 3 - 76
 Example: Find Rejection Region
(continued)
 Suppose that  = 0.10 is chosen for this test

Find the rejection region: Reject H0

 =0.10

Do not reject H0 Reject H0

0 1.28

Reject H0 if Z > 1.28

Week 3 - 77
 Example: Test Statistic (continued)

Obtain sample and compute the test statistic

Suppose a sample is taken with the following

results: n = 64, X = 53.1 ( = 10 was assumed known)
 Then the test statistic is:
Xμ 53.1  52
Z    0.88
σ 10
n 64
Week 3 - 78
 Example: Decision
(continued)
Reach a decision and interpret the result:
Reject H0

 = 0.10

Do not reject H0 Reject H0

1.28
0
Z = 0.88

Do not reject H0 since Z = 0.88 ≤ 1.28

i.e.: there is not sufficient evidence that the
mean bill is over RM52
Week 3 - 79
 p -Value Solution (continued)
Calculate the p-value and compare to 
(assuming that μ = 52.0)
p-value = 0.1894

Reject H0
P(X  53.1)
 = 0.10
 53.1  52.0 
 P Z  
0  10/ 64 
Do not reject H0
1.28
Reject H0
 P(Z  0.88)  1  0.8106
Z = 0.88  0.1894

Do not reject H0 since p-value = 0.1894 >  = 0.10

Week 3 - 80
 t - test of Hypothesis for the Mean
(σ Unknown)
 Convert sample statistic X( ) to a t test statistic
Hypothesis
Tests for 

σ Known σ Unknown

The test statistic is:

X μ
t n-1 
S
n
Week 3 - 81
 Example: Two-Tail Test
( 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
H0: μ = 168
X = $172.50 and H1: μ ¹ 168
S = $15.40. Test at the
 = 0.05 level.
Week 3 -
(Assume the population distribution is normal) 82
 Example Solution:
Two-Tail Test
H0: μ = 168 /2=0.025 /2=0.025
H1: μ ¹ 168
 a = 0.05 Reject H0 Do not reject H0 Reject H0
-t n-1,α/2 t n-1,α/2
0
 n = 25 -2.0639 2.0639
1.46
  is unknown, so X μ 172.50  168
t n1    1.46
use a t statistic S 15.40
n 25
 Critical Value:
t24 = ± 2.0639 Do not reject H0: not sufficient evidence that true
mean cost is different than $168
Week 3 - 83
 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 ≤ μ ≤ 178.86

 Since this interval contains the Hypothesized mean (168),

we do not reject the null hypothesis at  = 0.05
Week 3 - 84
 Hypothesis Tests for Proportions

 Involves categorical variables

 Two possible outcomes
 p = “SUCCESS” (possesses a certain
characteristic)
 q = 1 – p = “FAILURE” (does not
possesses that characteristic)
Week 3 - 85
 Proportions
(continued)
 Sample proportion in the success category is
denoted by ps
X number of successes in sample
ps  
 n sample size

 When both np and n(1-p) are at least 5, ps can

be approximated by a normal distribution with
mean and standard deviation
μps  p p(1  p)
 σps 
n
Week 3 - 86
 Hypothesis Tests for Proportions

 The sampling
distribution of ps Hypothesis
is approximately Tests for p
normal, so the test
statistic is a Z np  5 np < 5
value: and or
ps  p n(1-p)  5 n(1-p) < 5
Z
p(1  p) Not discussed
n in this chapter

Week 3 - 87
 Z Test for Proportion
in Terms of Number of Successes

 An equivalent
form to the last Hypothesis
slide, but in terms Tests for X
of the number of
successes, X: X5 X<5
and or
n-X  5
X  np n-X < 5
Z
np(1  p) Not discussed
in this chapter

Week 3 - 88
 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 Check:
with 25 responses. Test n p = (500)(0.08) = 40
at the  = 0.05
n(1-p) = (500)(0.92) = 460
significance level.
Week 3 - 89
 Z Test for Proportion: Solution

H0: p = 0.08 Test Statistic:

ps  p 0.05  0.08
H1: p ¹ 0.08 Z   2.47
p(1  p) 0.08(1  0.08)
a = 0.05
n 500
n = 500, ps = 0.05
Critical Values: ± 1.96 Decision:
Reject Reject Reject H0 at  = 0.05
Conclusion:
0.025 0.025
There is sufficient
-1.96 0 1.96 z evidence to reject the
-2.47 company’s claim of 8%
Week 3 - response rate. 90
 p-Value Solution (continued)
Calculate the p-value and compare to 
(For a two sided test the p-value is always two sided)
Do not reject H0
Reject H0 Reject H0 p-value = 0.0136:
/2 = 0.025 /2 =0.025
P(Z  2.47)  P(Z  2.47)
0.0068 0.0068
 2(.0068)  0.0136
-1.96 0 1.96

Z = -2.47 Z = 2.47

Reject H0 since p-value = 0.0136 <  = 0.05

Week 3 - 91
 SPSS Workshop
(Part 4: Inferential Statistics)
Student IQ Score Student IQ Score
1 110 16 110
2 105 17 117
3 102 18 98
4 112 19 124
5 120 20 107
6 107 21 112
7 99 22 122
8 100 23 104
9 109 24 105
10 103 25 110
11 115 26 120
12 125 27 125
13 115 28 120
14 106 29 100
15 110 30 110
Week 3 - 92
 SPSS Workshop

Analyze
– Compare Means
– One-Sample T Test
- Test Variable(s): IQ

- Test Value: 100

Week 3 - 93