PROBABILITY THEORY

INFERENCE ON A POPULATION MEAN

WEEK 12

SUBJECT MATTER EXPERT

 SUBTOPICS :

•Fundamentals of Hypothesis-Testing Methodology

•One and Two Sides Z test Hypothesis for the Mean
(σ Known)
•One and Two Sides t test Hypothesis for the Mean
(σ Unknown)
•Z Test of Hypothesis for the Proportion

2
 Hypotesis Testing
Methodology

 A hypothesis is a claim (assumption) about a population parameter

through sampling
 It typically begins with some theory, claim, or assertion about a
particular parameter of a population

Example :
 The population mean age is μ = 50
 The mean monthly cell phone bill of this city is μ =
$52
 The proportion of adults in this city with cell phones is
π = .68
 Hypotesis Testing
Methodology

Null Hypothesis (H0):

• It is an initial allegation about the statements that may be
accepted or rejected.
• It refers to the status quo or the current belief in a situation
• Always contains “=” , “≤” or “” sign
• May or may not be rejected
 Hypotesis Testing
Methodology

Alternative Hypothesis (H1) :

•Is the opposite of the null hypothesis
•Represents a research claim or specific inference you would like
to prove
•Never contains the “=” , “≤” or “” sign
•May or may not be proven
 Hypotesis Testing
Methodology

Example 1:
•Claim: The population mean age is 50.
•H0: μ = 50, H1: μ ≠ 50
•Sample the population and find sample mean.

Populatio
n
Sample
 Hypotesis Testing
Methodology

Types of H0 and H1

One population One population

mean: proportion:
 one way :  one way :
H0: m ³ mo H0: p ³ po
H1: m < mo H 1 : p < po
H0: m £ mo H0: p £ po
H1: m > mo H 1: p > po
 two way :  two way :
H0: m = mo H0: p = po
H1: m ¹ mo H1: p ¹ po
 Hypotesis Testing
Methodology

Possible
Error Hypothesis
in Decision MakingTest Outcomes
Actual Situation
Decision H0 True H0 False
Do Not No Error Type II Error
Reject H0 Probability 1 - α Probability β
Reject H0 Type I Error No Error
Probability α Probability 1 - β
 Hypotesis Testing
Methodology

The Test Statistic and Critical Values

a/2
Upper-tail test
a/2 a

0
0
Represents critical value

Rejection region is
shaded
Lower-tail a
test

0
 Hypotesis Testing
Methodology

Steps of Hypothesis Testing:

1. State the null hypothesis, H0 and state the alternative
hypotheses, H1

2. Choose the level of significance, α, and the sample size n.

3. Determine the appropriate test statistic and sampling
distribution
4. Determine the critical values that divided the value of the test
statistic
 Hypotesis Testing
Methodology

Steps of Hypothesis Testing: (cont.)

5. Collect data and compute the test statistic from the sample result
6. Compare the test statistic to the critical value to determine
whether the test statistic falls in the region of rejection. Make
the statistical decision: Reject H0 if the test statistic falls in the
rejection region. Express the decision in the context of the
problem
 Z test of Hypotesis
For the mean (σ Known)
The Test Statistic and Critical
Values
Hypothesis σ known
Test Critical Values
Statistic

H0: m ³ mo 𝑥
¯ −𝜇 𝑜
𝑧= 𝑧 ≤ − 𝑧𝛼
H1: m < mo 𝜎 /√𝑛

H0: m £ mo 𝑥
¯ −𝜇 𝑜
𝑧=
𝜎 /√𝑛
𝑧 ≥ 𝑧𝛼
H1: m > mo

H0: m = mo 𝑥
¯ −𝜇 𝑜 z  z / 2 or
𝑧= z   z / 2
H1: m ¹ mo 𝜎 /√𝑛
 Z test of Hypotesis
For the mean (σ Known)

Example 2:
The manager of a fast food restaurant want to determine whether the
waiting time to place an order has changed in the past month from its
previous population mean value 4.5 minutes and standard deviation 1.2.
To examine it, he select 25 sample and the sample mean is 5.1.
Determine that the mean waiting time is 4.5. (level of significance
α=5%)
 Z test of Hypotesis
For the mean (σ Known)

Example 2: (Cont.)
Step 1 : Hypotheses :
H0: μ = 4.5 H1: μ ≠ 4.5 (This is a two tailed test)

Step 2 : level of significance  = .05 and sample size n = 25

Step 3 : Determine the appropriate technique
σ is known so this is a Z test
Step 4 : Critical values :
For  = .05 the critical Z values are ±1.96
Ho rejected if Z<-1.96 or Z>1.96
 Z test of Hypotesis
For the mean (σ Known)
Example 2: (Cont.)
Step 5 : Statistical Test

5.1  4.5
z  2.5
1.2 / 25

Step 6 : Because z=2.5 > 1.96, so reject H0 and conclude that there is
evidence that the population mean waiting time to place an
order has changed from its previous value of 4.5 minutes
 Z test of Hypotesis
For the mean (σ Known)

Example 2: (Cont.)
Is the test statistic in the rejection region?

 = 0.05/2  = 0.05/2
Reject H0
if
Reject H0 Do not reject H0 Reject H0
Z < -1.96
or Z > -Z= -1.96 0 +Z= +1.96
1.96;
otherwis
e do not Here, Z = 2.5 > 1.96, so the test
reject H0 statistic is in the rejection
region
 t test of Hypotesis For
the mean (σ Known)
The Test Statistic and Critical Values
Hypothesis σ un known
Test Critical Values
Statistic
H0: m ³ mo 𝑥
¯ −𝜇 𝑜
𝑡𝑧=
≤ − 𝑧𝛼 𝑡 ≤ −𝑡 𝛼 ;𝑛−1
H1: m < mo 𝑠/ √ 𝑛

H0: m £ mo 𝑥
¯ −𝜇 𝑜
𝑡=
H1: m > mo 𝑧 ≥ 𝑠/
𝑧 √𝑛 𝛼
𝑡 ≥ 𝑡 𝛼 ; 𝑛−1
H0: m = mo t  t / 2 or
z  z𝑥
¯/ 2 −𝜇
or 𝑜
𝑡= t  t / 2
H1: m ¹ mo  /2 √ 𝑛
z   z𝑠/
17
 t test of Hypotesis For
the mean (σ Known)

Example 3:
The Saxon Home Improvement Company said that over the past five
years, the mean amount per sales invoice is $120. To inform the
amount change, this company get the 12 sample of sales invoice, there
are :

108.98 152.22 111.45 110.59 127.46 107.26

93.32 91.97 111.56 75.71 128.58 135.11

Test hypothesis if the meant amount more than $120.

 t test of Hypotesis For
the mean (σ Known)
Example 3: (Cont.)
Step 1 : Hypotheses :
H0: μ ≤120 H1: μ > 120 (This is a one tailed test)

Step 2 : level of significance  = 0.05 and sample size n = 12

Step 3 : Determine the appropriate technique
σ is unknown so this is a t-test
Step 4 : Critical values :
t0.05;12 1  1.7959
t  t ;n 1

Ho rejected if
 t test of Hypotesis For
the mean (σ Known)
Example 3: (Cont.)
Step 5 : Statistical Test

√
2
𝑛
( 𝑥 𝑖 − ¯𝑥 )
𝑠=√ 𝑠 = ∑
n
x 2
x   i  112 .85 =20.80
i 1 n 𝑖=1 𝑛−1

𝟏𝟏𝟐.𝟖𝟓− 𝟏𝟐𝟎
𝒕= =−𝟏.𝟏𝟗𝟎𝟖
𝟐𝟎.𝟖𝟎/ √𝟏𝟐

Step 6 : Because t=-1.1908 < t0.05;121  1.7959

, so don’t reject H0
 t test of Hypotesis For
the mean (σ Known)

Example 3: (Cont.)
Is the test statistic in the rejection region?

 = 0.05

Do not reject H0 Reject H0

0 t0.05;121  1.7959

Here, t=-1.1908 < 1.7959, so the test

statistic is in the acceptance region
 Z test of Hypotesis
For the mean (σ Known)
•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
 z test of Hypotesis
For the mean (σ Known)
Statistical Test :

p  po
Z
po (1  po )
n

Z is the standardized normal value for the level of confidence desired

po : the sample proportion

: hypothesized proportion of successes in the population

n : the sample size
 z test of Hypotesis
For the mean (σ Known)

Hypothesis Test Statistic Critical

Values
The Test Statistic and Critical
H0 : p ³ p o
Values z   z
H1 : p < p o
𝑝
¯ − 𝑝𝑜
𝑍=

√
H0 : p £ p o 𝑝 𝑜 (1 −𝑝 𝑜 )
H1 : p > p o 𝑛
z  z

z  z / 2 or
H0 : p = p o
z   z / 2
H1 : p ¹ p o
 z test of Hypotesis
For the mean (σ Known)
Example 4:
A marketing company claims that it receives 8% responses from
its mailing. To test this claim, a random sample of 500 were
surveyed with 30 responses. Test at the  = .05 significance level.
 z test of Hypotesis
For the mean (σ Known)

Example 4:
Step 1 : Hypotheses :
H0: p = 0.08

H1: p ≠ 0.08 (This is a two tailed test)

Step 2 : level of significance  = 0.05 and sample size n = 30

Step 3 : Determine the appropriate technique = Z test
Step 4 : Critical values :
For  = 0.05 the critical Z values are ±1.96
Ho rejected if Z<-1.96 or Z>1.96
 z test of Hypotesis
For the mean (σ Known)
Example 4: (Cont.)
Step 5 : Statistical Test

𝑝¯ =30/500=0.06
.025 .025

0 z
-1.96 1.96
-1.648

Step 6 : Because z=-1.648 > -1.96, so don’t reject Ho and There isn’t
sufficient evidence to reject the company’s claim of 8% response
rate.
SUBJECT MATTER EXPERT