Chapter 4 B

Inferences Based on a Single Sample:

Confidence Intervals and Tests of
Hypothesis
 Outline

 The Elements of a Test of Hypothesis

 Large-Sample Test of Hypothesis about µ
 Small-Sample Test of Hypothesis about µ
 Large-Sample Test of Hypothesis about a
Population Proportion
 P-values
 The Elements of
a Test of Hypothesis
 Hypothesis Testing
I believe the
population mean Reject
age is 50 Reject
hypothesis!
hypothesis!
Population (hypothesis). Not
Notclose.
close.

 

 
 Random
 sample
Mean 
X = 20
 What’s a Hypothesis?
A statistical hypothesis I believe the mean GPA
is a statement about of this class is 3.5!
the numerical value of
a population parameter.

© 1984-1994 T/Maker Co.

 Statistical hypothesis
 Research hypothesis
 Steps to test hypothesis

 Step 1: Form null and alternative hypotheses

 Step 2: Calculate statistics
 Step 3: Identify the rejection regions/ critical
values/ p-values
 Step 4: Make decisions
(1) reject H0  H1 is true
(2) Can not reject H0
 Null Hypothesis

 The null hypothesis, denoted H0, represents

the hypothesis that will be accepted unless the
data provide convincing evidence that it is false.
 This usually represents the “status quo” or
some claim about the population parameter that
the researcher wants to test.
 Alternative Hypothesis

 The alternative (research) hypothesis,

denoted Ha, represents the hypothesis that will
be accepted only if the data provide convincing
evidence of its truth.
 This usually represents the values of a
population parameter for which the researcher
wants to gather evidence to support.
 Alternative Hypothesis
1. Opposite of null hypothesis
2. The hypothesis that will be accepted only if
the data provide convincing evidence of its
truth
3. Designated Ha
4. Stated in one of the following forms
Ha:  some value)
Ha:  some value)
Ha:  some value)
Forming hypotheses-Example
 Forming hypotheses-Example

 When the null hypothesis contains more than one value of , as in

this case (H0: 2,400), we use the value of m closest to the
values specified in the alternative hypothesis. The idea is that if
the hypothesis that :  equals 2,400 can be rejected in favor of :
 2,400, then :  less than or equal to 2,400 can certainly be
rejected.
 Forming hypotheses-Example
Does an average box of
cereal contain 368 grams of
cereal?
H0:  = 368
H1:   368
 Two-tailed test

368 gm.
 Forming hypotheses-Example
Does an average box of
cereal contain more than
368 grams of cereal?

H0:  = 368
H1:  368
 One-tailed, upper-tailed
or right-tailed test 368 gm.
 Forming hypotheses-Example
You’re an analyst for Ford. You
want to find out if the average
miles per gallon of Escorts is at
least 32 mpg. Similar models
have a standard deviation of 3.8
mpg. You take a sample of 60
Escorts & compute a sample
mean of 30.7 mpg. At the .01
level of significance, is there
evidence that the miles per gallon
is less than 32?
 Forming hypotheses-Example
H0:  = 32
Ha:  < 32
 One-tailed, lower-tailed or left tailed test
 One-Tailed Test

A one-tailed test of hypothesis is one in which the

alternative hypothesis is directional and includes
the symbol “ < ” or “ >.”
Upper-tailed (>): “greater than,” “larger,” “above”

Lower-tailed (<): “less than,” “smaller,” “below”

 Two-Tailed Test
A two-tailed test of hypothesis is one in which the
alternative hypothesis does not specify departure
from H0 in a particular direction and is written with
the symbol “ ≠.”
Some key words that help you identify this

nondirectional nature are:

Two-tailed (≠): “not equal to,” “differs from”
 Test Statistic

The test statistic is a sample statistic, computed

from information provided in the sample, that the
researcher uses to decide between the null and
alternative hypotheses.
 Test statistic for Large-Sample
Test of Hypothesis about µ

One-Tailed Test Two-Tailed Test

H0: µ = µ0 H0: µ = µ0
Ha: µ < µ0 Ha: µ ≠ µ0
(or Ha: µ > µ0)

Test Statistic: Test Statistic:

x  µ0 x  µ0 x  µ0 x  µ0
z  z 
x  n x s n
 Rejection region

One-Tailed Test
Rejection region:
z < –z
(or z > zwhen Ha: µ > µ0)
where z is chosen so that
P(z > z) = 
 Rejection region

Two-Tailed Test
Rejection region:
|z| > z
where z is chosen so that
P(|z| > z) = /2
 Rejection Regions

Alternative Hypotheses

Lower- Upper- Two-Tailed

Tailed Tailed
 = .10 z < –1.282 z > 1.282 z < –1.645 or z > 1.645

 = .05 z < –1.645 z > 1.645 z < –1.96 or z > 1.96

 = .01 z < –2.326 z > 2.326 z < –2.575 or z > 2.575

 Rejection Regions
(Two-Tailed Test)
Sampling Distribution Level of Confidence
Rejection Rejection
Region Region
1–
1/2  1/2 
Fail to Reject
Region

Ho Sample Statistic
Critical Value Critical
Value Value
 Rejection Region
(One-Tail Test)
Sampling Distribution Level of Confidence
Rejection
Region
1–

Fail to Reject
Region

Ho Sample Statistic
Critical Value
Value
 Make decision
 If the numerical value of the test statistic falls in the
rejection region, we reject the null hypothesis and
conclude that the alternative hypothesis is true. We
know that the hypothesis-testing process will lead to this
conclusion incorrectly (Type I error) only 100 % of the
time when H0 is true.
 If the test statistic does not fall in the rejection region,
we do not reject H0. Thus, we reserve judgment about
which hypothesis is true. We do not conclude that the
null hypothesis is true because we do not (in general)
know the probability  that our test procedure will lead
to an incorrect acceptance of H0 (Type II error).
 Type I Error

A Type I error occurs if the

researcher rejects the null hypothesis
in favor of the alternative hypothesis
when, in fact, H0 is true. The
probability of committing a Type I
error is denoted by .
 Type II Error

A Type II error occurs if the researcher accepts

the null hypothesis when, in fact, H0 is false. The
probability of committing a Type II error is
denoted by .
Conclusions and Consequences
for a Test of Hypothesis

True State of Nature

Conclusion H0 True Ha True
Accept H0 Correct decision Type II error
(Assume H0 True) (probability )
Reject H0 Type I error Correct decision
(Assume Ha True) (probability )
 Two-Tailed z Test Example
Does an average box of
cereal contain 368 grams of
cereal? A random sample
of 25 boxes had x = 372.5.
The company has specified
 to be 25 grams. Test at
the .05 level of significance.
368 gm.
 One-Tailed z Test
Example
Does an average box of
cereal contain more than
368 grams of cereal? A
random sample of 25 boxes
showed x = 372.5. The
company has specified  to
be 25 grams. Test at the .05
level of significance.
368 gm.
 One-Tailed z Test Thinking
Challenge
You’re an analyst for Ford. You
want to find out if the average
miles per gallon of Escorts is at
least 32 mpg. Similar models
have a standard deviation of 3.8
mpg. You take a sample of 60
Escorts & compute a sample
mean of 30.7 mpg. At the .01
level of significance, is there
evidence that the miles per gallon
is less than 32?
Example
Example
Example
Test of Hypothesis about a
Population Mean:
Student’s t-Statistic
Small-Sample Test of Hypothesis
about µ
One-Tailed Test
H0: µ = µ0
Ha: µ < µ0 (or Ha: µ > µ0)

Test statistic:

Rejection region: t < –t

(or t > t when Ha: µ > µ0)
where t and t are based on (n – 1) degrees of
freedom
Small-Sample Test of Hypothesis
about µ
Conditions Required for a Valid Small-
Sample Hypothesis Test for µ

1. A random sample is selected from the target

population.
2. The population from which the sample is
selected has a distribution that is approximately
normal.
 Two-Tailed t Test
Example
Does an average box of
cereal contain 368 grams
of cereal? A random
sample of 36 boxes had
a mean of 372.5 and a
standard deviation of 12
grams. Test at the .05
level of significance.
368 gm.
 Two-Tailed t Test
Thinking Challenge
You work for the FTC. A
manufacturer of detergent claims
that the mean weight of detergent
is 3.25 lb. You take a random
sample of 64 containers. You
calculate the sample average to be
3.238 lb. with a standard deviation
of .117 lb. At the .01 level of
significance, is the manufacturer
correct? 3.25 lb.
 One-Tailed t Test
Example
Is the average capacity of
batteries less than 140
ampere-hours? A random
sample of 20 batteries had a
mean of 138.47 and a
standard deviation of 2.66.
Assume a normal distribution.
Test at the .05 level of
significance.
 One-Tailed t Test
Thinking Challenge
You’re a marketing analyst for Wal-
Mart. Wal-Mart had teddy bears on
sale last week. The weekly sales
($ 00) of bears sold in 10 stores
was:
8 11 0 4 7 8 10 5 8 3
At the .05 level of significance, is
there evidence that the average
bear sales per store is more than 5
($ 00)?
 Large-Sample Test of
Hypothesis about a Population
Proportion
Large-Sample Test of Hypothesis
about p
One-Tailed Test
H0: p = p0
Ha: p < p0 (or Ha: p > p0)
p̂  p0
Test statistic: z  where  p̂  p0 q0 n
 p̂
q0  1  p0
Rejection region:
z < –z(or z > z when Ha: p > p0)
Note: p0 is the symbol for the numerical value of p
assigned in the null hypothesis
Large-Sample Test of Hypothesis
about p
Two-Tailed Test
H0: p = p0
Ha: p ≠ p0
p̂  p0
Test statistic: z  where  p̂  p0 q0 n
 p̂
q0  1  p0
Rejection region: |z| < z

Note: p0 is the symbol for the numerical value of p

assigned in the null hypothesis
 Conditions Required for a Valid
Large-Sample Hypothesis Test
for p
1. A random sample is selected from a binomial
population.
2. The sample size n is large. (This condition will be
satisfied if both np0 ≥ 15 and
nq0 ≥ 15.)
 One-Proportion z Test
Example
The present packaging
system produces 10%
defective cereal boxes.
Using a new system, a
random sample of 200
boxes had11 defects. Does
the new system produce
fewer defects? Test at
the .05 level of significance.
 One-Proportion z Test Thinking
Challenge
You’re an accounting manager.
A year-end audit showed 4% of
transactions had errors. You
implement new procedures. A
random sample of 500
transactions had 25 errors. Has
the proportion of incorrect
transactions changed at the .05
level of significance?
Observed Significance Levels:
p-Values
 p-Value
The observed significance level, or
p-value, for a specific statistical test is the
probability (assuming H0 is true) of observing a
value of the test statistic that is at least as
contradictory to the null hypothesis, and supportive
of the alternative hypothesis, as the actual one
computed from the sample data.
 p-Value
 Probability of obtaining a test statistic more
extreme (or than actual sample value,
given H0 is true
 Called observed level of significance
• Smallest value of  for which H0 can be rejected
 Used to make rejection decision
• If p-value  , do not reject H0
• If p-value < , reject H0
Steps for Calculating the p-Value
for a Test of Hypothesis

1. Determine the value of the test statistic z

corresponding to the result of the sampling
experiment.
Steps for Calculating the p-Value
for a Test of Hypothesis
2a. If the test is one-tailed, the p-value is equal to
the tail area beyond z in the same direction as the
alternative hypothesis. Thus, if the alternative
hypothesis is of the form > , the p-value is the
area to the right of, or above, the observed z-
value. Conversely, if the alternative is of the form
< , the p-value is the area to the left of, or below,
the observed z-value.
Steps for Calculating the p-Value
for a Test of Hypothesis
2b. If the test is two-tailed, the p-value is equal to
twice the tail area beyond the observed z-value
in the direction of the sign of z – that is, if z is
positive, the p-value is twice the area to the
right of, or above, the observed z-value.
Conversely, if z is negative, the p-value is twice
the area to the left of, or below, the observed
z-value.
 Reporting Test Results as
p-Values: How to Decide Whether to
Reject H0

1. Choose the maximum value of  that you are

willing to tolerate.
2. If the observed significance level (p-value) of
the test is less than the chosen value of ,
reject the null hypothesis. Otherwise, do not
reject the null hypothesis.
 Two-Tailed z Test
p-Value Example
Does an average box of
cereal contain 368 grams of
cereal? A random sample of
25 boxes showed x = 372.5.
The company has specified
 to be 15 grams. Find the
p-value. How does it
compare to  = .05?
368 gm.
 One-Tailed z Test
p-Value Example
Does an average box of
cereal contain more than
368 grams of cereal? A
random sample of 25
boxes showed x = 372.5.
The company has specified
 to be 15 grams. Find the
p-value. How does it
368 gm.
compare to  = .05?
 p-Value
Thinking Challenge
You’re an analyst for Ford. You
want to find out if the average
miles per gallon of Escorts is
less than 32 mpg. Similar
models have a standard
deviation of 3.8 mpg. You take a
sample of 60 Escorts & compute
a sample mean of 30.7 mpg.
What is the p-value? How does
it compare to  = .01?
 END OF CHAPTER 4