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CHAPTER 9
INTRODUCTION TO
HYPOTHESIS TESTING
POINTS TO HIGHLIGHT
Formulate null and alternative hypotheses for
applications involving a single population mean or
proportion or variance
Formulate a decision rule for testing a hypothesis
Know how to use the test statistic, critical value,
and p-value approaches to test the null hypothesis
Know what Type I and Type II errors are
Compute the probability of a Type II error
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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 = $42
population proportion
Example: The proportion of adults in this
city with cell phones is p = .68
THE NULL HYPOTHESIS, H0
States the assumption (numerical) to be tested
Example: The average number of TV sets in U.S.
homes is at least three ( )
Is always about a population parameter, not
about a sample statistic
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THE NULL HYPOTHESIS, H0
Begin with the assumption that the null
hypothesis is true
Always contains “=” sign
May or may not be rejected
THE ALTERNATIVE HYPOTHESIS, H1
Is the opposite of the null hypothesis
e.g.: The average number of TV sets in U.S. homes
is less than 3 ( H1: μ < 3 )
Never contains the “=” , “≤” or “≥” sign
May or may not be accepted
Is generally the hypothesis that is believed (or
needs to be supported) by the researcher
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Hypothesis Testing Process
Claim: the
population
mean age is 50.
(Null Hypothesis:
Population
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
REASON FOR REJECTING H0
Sampling Distribution of X
x
20 μ = 50
If H0 is true ... then we reject the
If it is unlikely that we
null hypothesis that
would get a sample
μ = 50.
mean of this value ... ... if in fact this were
the population mean…
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LEVEL OF SIGNIFICANCE
Defines unlikely values of sample statistic if null
hypothesis is true
Defines rejection region of the sampling distribution
Is designated by α , (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
Level of significance = Represents
critical value
H0 : μ = 3
Rejection
H1 : μ < 3 0 region is
Lower tail test
shaded
H0 : μ = 3
H1 : μ > 3 Upper tail test 0
H0 : μ = 3 α/2
H1 : μ ≠ 3
Two tailed test 0
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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 α
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 β
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OUTCOMES AND PROBABILITIES
Possible Hypothesis Test Outcomes
State of Nature
Decision H0 True H0 False
Do Not
No error Type II Error
Reject (1 – α) (β)
Key:
Outcome H0
(Probability)
Reject Type I Error No Error
H0 (α) (1-β)
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 ( α ) , then
Type II error probability ( β )
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FACTORS AFFECTING TYPE II
ERROR
All else equal,
β when the difference between hypothesized parameter
and its true value
β when α
β when σ
β when n
CRITICAL VALUE
APPROACH TO TESTING
Convert sample statistic (e.g.: X ) to test statistic ( Z or
t statistic )
Determine the critical value(s) for a specified
level of significance α from a table or computer
If the test statistic falls in the rejection region, reject H0 ;
otherwise do not reject H0
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LOWER TAIL TESTS
H0: μ = 3
The cutoff value, H1 : μ < 3
-zα or x1-α , is called
a critical value
Reject H0 Do not reject H0
-zα 0
x1-α μ
UPPER TAIL TESTS
H0: μ = 3
The cutoff value, H1 : μ > 3
zα or xα , is called
a critical value
Do not reject H0 Reject H0
0 zα
μ xα
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TWO TAILED TESTS
H0: μ = 3
There are two cutoff H1 : μ ≠ 3
values (critical values):
± zα/2
α/2 α/2
or H1 : μ
x1-α/2
Lower
Reject H0 Do not reject H0 Reject H0
xα/2 -zα/2 0 zα/2
Upper x1-α/2 μ0 xα/2
Lower Upper
&
CRITICAL VALUE
APPROACH TO TESTING
Convert sample statistic ( X ) to a test statistic
( Z or t statistic )
Hypothesis
Tests for μ
σ Known σ Unknown
Large Small
Samples Samples
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CALCULATING THE TEST STATISTIC
Hypothesis
Tests for μ
σ Known σ Unknown
The test statistic is:
Large Small
Samples Samples
CALCULATING THE TEST STATISTIC
Hypothesis
Tests for μ
σ Known σ Unknown
The test statistic is:
But is sometimes
approximated Large Small
using a z: Samples Samples
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CALCULATING THE TEST STATISTIC
Hypothesis
Tests for μ
σ Known σ Unknown
The test statistic is:
Large Small
Samples Samples
(The population must be
approximately normal)
REVIEW: STEPS IN HYPOTHESIS
TESTING
1. Specify the population value of interest
2. Formulate the appropriate null and alternative
hypotheses
3. Specify the desired level of significance
4. Determine the rejection region
5. Obtain sample evidence and compute the test
statistic
6. Reach a decision and interpret the result
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HYPOTHESIS TESTING EXAMPLE
Test the claim that the true mean # of TV
sets in US homes is at least 3.
(Assume σ = 0.8)
1. Specify the population value of interest
The mean number of TVs in US homes
2. Formulate the appropriate null and alternative
hypotheses
H0: μ = 3 H1: μ < 3 (This is a lower tail test)
3. Specify the desired level of significance
Suppose that α = .05 is chosen for this test
HYPOTHESIS TESTING EXAMPLE
4. Determine the rejection region
α = .05
Reject H0 Do not reject H0
-zα= -1.645 0
This is a one-tailed test with α = .05.
Since σ is known, the cutoff value is a z value:
Reject H0 if z < - zα = -1.645 ; otherwise do not reject H0
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HYPOTHESIS TESTING EXAMPLE
5. Obtain sample evidence and compute the test
statistic
Suppose a sample is taken with the following results:
n = 100, x = 2.84 (σ = 0.8 is assumed known)
Then the test statistic is:
HYPOTHESIS TESTING EXAMPLE
6. Reach a decision and interpret the result
α = .05
z
Reject H0 Do not reject H0
-1.645 0
-2.0
Since z = -2.0 < -1.645, we reject the null hypothesis that the mean
number of TVs in US homes is at least 3
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HYPOTHESIS TESTING EXAMPLE
An alternate way of constructing rejection region:
Now
expressed in
α = .05 x, not z
units
x
Reject H0 Do not reject H0
2.8684 3
2.84
Since x = 2.84 < 2.8684, we
reject the null hypothesis
P-VALUE APPROACH TO TESTING
Convert Sample Statistic (e.g. X) to Test Statistic ( Z or
t statistic )
Obtain the p-value from a table or computer
Compare the p-value with α
If p-value < α , reject H0
If p-value > α , do not reject H0
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P-VALUE APPROACH TO TESTING
p-value: Probability of obtaining a test statistic
at least as extreme as the one that was actually
observed sample value given H0 is true
Also called observed level of significance
Smallest value of α for which H0 can be rejected
P-VALUE EXAMPLE
Compare the p-value with α
If p-value < α , reject H0
If p-value > α , do not reject H0
α = .05
Here: p-value = .0228 p-value =.0228
α = .05
Since .0228 < .05, we reject the
null hypothesis
2.8684 3
2.84
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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 $52 per month. The company wishes to test this
claim. (Assume σ = 10 is known)
Form hypothesis test:
H0: μ = 52 the average is not over $52 per month
H1: μ > 52 the average is greater than $52 per month
(i.e., sufficient evidence exists to support the
manager’s claim)
Example: Find Rejection Region
Suppose that α = .10 is chosen for this test
Find the rejection region: Reject H0
= .10
Do not reject H0 Reject H0
0 zα=1.28
Reject H0 if z > 1.28
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EXAMPLE: TEST STATISTIC
Obtain sample evidence and compute the test statistic
Suppose a sample is taken with the following results:
n = 64, x = 53.1 (σ=10 was assumed known)
Then the test statistic is:
EXAMPLE: DECISION
Reach a decision and interpret the result:
Reject H0
= .10
Do not reject H0 Reject H0
1.28
0
z = .88
Do not reject H0 since z = 0.88 ≤ 1.28
i.e.: there is not sufficient evidence that the
mean bill is over $52
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P -VALUE SOLUTION
Calculate the p-value and compare to α
p-value = .1894
Reject H0
= .10
0
Do not reject H0 Reject H0
1.28
z = .88
Do not reject H0 since p-value = .1894 > α = .10
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 x = $172.50 and
s = $15.40. Test at the H0: μ = 168
α = 0.05 level. HA: μ 168
(Assume the population distribution is
normal)
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EXAMPLE SOLUTION: TWO-TAIL
TEST
H0: μ = 168 α/2=.025 α/2=.025
H1: μ 68
α= 0.05 Reject H0 Do not reject H0 Reject H0
-tα/2 tα/2
0
n = 25 -2.0639 2.0639
1.46
σ is unknown, so
use a t statistic
Critical Value
t24 = ± 2.0639 Do not reject H0: not sufficient evidence that true
mean cost is different than $168
PROPORTIONS
Sample proportion in the success category is denoted by p
When both np and n(1-p) are at least 5, p can be
approximated by a normal distribution with mean and standard
deviation
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HYPOTHESIS TESTS FOR PROPORTIONS
The sampling
distribution of p is Hypothesis
Tests for p
normal, so the test
statistic is a z value:
np ≥ 5 np < 5
and or
n(1-p) ≥ 5 n(1-p) < 5
Not discussed in
this chapter
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 α = .05
Check:
significance level.
n p = (500)(.08) = 40
n(1-p) = (500)(.92) = 460
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Z TEST FOR PROPORTION: SOLUTION
Test Statistic:
H0: p = .08
H1: p ≠ .08
α = .05
n = 500, p = .05
Critical Values: ± 1.96 Decision:
Reject H0 at α = .05
Reject Reject
Conclusion:
.025 .025
There is sufficient evidence to reject
z the company’s claim of 8%
-1.96 0 1.96 response rate.
-2.47
P -VALUE SOLUTION
Calculate the p-value and compare to α
(For a two sided test the p-value is always two sided)
Do not reject H0
Reject H0 Reject H0 p-value = .0136:
α/2 = .025 α/2 = .025
.0068 .0068
-1.96 0 1.96
z = -2.47 z = 2.47
Reject H0 since p-value = .0136 < α = .05
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HYPOTHESIS TESTS FOR VARIANCE
The test statistic is a
Hypothesis
χ2 value given that
Tests for σ2
sampled population
is normal :
EXAMPLE: TEST FOR VARIANCE
There is a claim that the variance of the new bottle filling
machine is 1 cubic centimeter. The foreman of the factory
believes that the variance of the machine is less than that. In
order to check this claim, a sample of 25 one-liter bottles
was selected (1 liter = 1000 cubic centimeters). The
estimated sample variance is .6333 cubic centimeter. With a
significance level of 5%, test the claim?
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TEST FOR VARIANCE: SOLUTION
Test Statistic:
H0: σ2 = 1 H1:
σ2 < 1
α = .05
Decision:
Reject Do not reject H0 at α = .05
region
Conclusion:
There is not sufficient evidence to
reject the claim that the population
1.96 variance is 1 cubic centimeter
0 -2.47 χ2
= 13.85
TYPE II ERROR
Type II error is the probability of
failing to reject a false H0
Suppose we fail to reject H0: μ = 52
when in fact the true mean is μ = 50
50 52
Reject Do not reject
H0: μ = 52 H0 : μ = 52
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TYPE II ERROR
Suppose we do not reject H0: μ = 52 when in fact the
true mean is μ = 50
This is the range of x where H0
This is the true distribution is not rejected
of x if μ = 50
50 52
Reject Do not reject
H0: μ< 52 H0 : μ = 52
TYPE II ERROR
Suppose we do not reject H0: μ = 52 when in fact
the true mean is μ = 50
Here, β = P( x ≥ cutoff ) if μ = 50
α β
50 52
Reject Do not reject
H0: μ = 52 H0 : μ = 52
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CALCULATING
Suppose n = 64 , σ = 6 , and α = .05
(for H0 : μ 52)
So β = P( x ≥ 50.766 ) if μ = 50
50 50.766 52
Reject Do not reject
H0: μ = 52 H0 : μ = 52
CALCULATING
Suppose n = 64 , σ = 6 , and α = .05
Probability of
type II error:
α β = .1539
50 52
Reject Do not reject
H0: μ = 52 H0 : μ = 52
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