Lecture 10

ECO 202: Statistical

Methods for Business
and Economics 
 T test
• A t-test is a type of inferential statistic used to determine if there is a
significant difference between the means of two groups, which may be
related in certain features.
• The t-test is one of many tests used for the purpose of hypothesis testing
in statistics.
Formula for t- test

Degree of freedom (df) = n-1

• If computed t value< Table t value : Accept the null hypothesis
• If computed t value > table t value: Reject the null hypothesis
 Problem

• The life time of a sample of 10 lights produced by a company is found to

be 16 hours with standard deviation of .50 hours.
• Test the hypothesis that the mean lifetime of the tubes produced by the
company is 16 hours.
Hypothesis testing:
• Using t test:

Null hypothesis: µ = 16
t= 16-15.8/ .50/ √10
Alternative hypothesis: µ ≠ 16
= -1.266

Given,
At 5% significance level, value of t for df 9 is
Df= 10-1= 9 2.26
N=10
µ= 15.8 The computed t value is smaller than the table
X = 16 value of t . So the difference is insignificant.

S= .50
So the hypothesis is accepted .
 Do it!
A sample of 25 Panasonic AAA batteries gave a sample mean zinc mass of
2.06g and a sample standard deviation of .141g.
• Test the hypothesis that the mean mass of batteries is 4 g at 5% level of
significance.
 T test continues
Mr Fox grows tomatoes in two separate fields. When the tomatoes are ready to be
picked, he is curious as to whether the sizes of his tomato plants differ between the two
fields. He takes a random sample of plants from each field and measures the heights of
the plants . Here is a summary of the results:
Field A Field B

Mean 1.6 1.3 m

Standard Deviation 0.3 m 0.5m

No. of plants 24 22
• There are two means in this math
• So we denote one as µa and the other as µb
• So we get,
Null hypothesis, H0 : µa = µb
Alternative hypothesis, H1 : µa ≠ µb
α= 0.05
 Formula

Since in this problem we don/t

know population mean, so we can
skip the part
•  So, t = = 2.44

• Degree of freedom would be

= smaller between the two numbers -1
-2.44 +2.44
= 22-1= 21
Value from t table is 2.07.
So the computed t value is greater than table t value. So we reject the null
hypothesis.
That means there is significance difference between the size of the plants of
the two fields.