Chapter 10

One-Sample Tests of Hypothesis

McGraw-Hill/Irwin ©The McGraw-Hill Companies, Inc. 2008

 Chapter Goals
After completing this chapter, you should be
able to:
⚫ Formulate null and alternative hypotheses for
applications involving
– a single population mean from a normal distribution
– a single population proportion (large samples)
⚫ Formulate a decision rule for testing a hypothesis
⚫ Know how to use the critical value and p-value
approaches to test the null hypothesis (for both mean
and proportion problems)
⚫ Know what Type I and Type II errors are
⚫ Assess the power of a test
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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
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 1. The Null Hypothesis, H0

⚫ States the assumption (numerical) to be

tested
Example: The average number of TV sets in
U.S. 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

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 1. The Null Hypothesis, H0
(continued)

⚫ 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

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 1. The Alternative Hypothesis, H1
⚫ Is the opposite of the null hypothesis
– e.g., The average number of TV sets in U.S. homes is
not equal to 3 ( H1: μ ≠ 3 )
⚫ Challenges the status quo
⚫ Never contains the “=” , “≤” or “” sign
⚫ May or may not be supported
⚫ Is generally the hypothesis that the researcher is
trying to support
⚫ We turn to the alternate hypothesis only if the
data suggests the null hypothesis is untrue.
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 2. 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 .01, .05, or .10
⚫ Is selected by the researcher at the beginning
⚫ Provides the critical value(s) of the test

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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 

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

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 Errors in Making Decisions
(continued)

⚫ 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

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)

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 3. Select the Test Statistic

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 4. Formulate the Decision Rule

• The area where the null

hypothesis is not rejected
is to the left of 1.65.
• The area of rejection is
to the right of 1.65.
• A one-tailed test is being
applied.

• The .05 level of significance was chosen.

• The sampling distribution of the statistic z follows the normal
probability distribution.
• The value 1.65 separates the regions where the null hypothesis is
rejected and where it is not rejected.
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• The value 1.65 is the critical value.
 5. Formulate the Decision Rule

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 Summary of the steps

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 One-Tailed and
Two-Tailed Tests of Significance

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 Hypothesis Tests for the Mean

Hypothesis
Tests for 

 Known  Unknown

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 Two-Tail Tests

⚫ In some settings, the H0: μ = 3

alternative hypothesis does
H1: μ  3
not specify a unique direction

/2 /2
◼ There are two
critical values,
3 x
defining the two
Reject H0 Do not reject H0 Reject H0
regions of
-z/2 0 +z/2 z
rejection
Lower Upper
critical value critical value
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 Hypothesis Testing Example

Test the claim that the true mean # of TV

sets in US homes is equal to 3.
(Assume σ = 0.8)
◼ State the appropriate null and alternative
hypotheses
◼ H0: μ = 3 , H1: μ ≠ 3 (This is a two tailed test)
◼ Specify the desired level of significance
◼ Suppose that  = .05 is chosen for this test

◼ Choose a sample size

◼ Suppose a sample of size n = 100 is selected

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 Hypothesis Testing Example
(continued)

◼ Determine the appropriate technique

◼ σ is known so this is a z test

◼ Set up the critical values

◼ For  = .05 the critical z values are ±1.96

◼ 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 − μ0 2.84 − 3 − .16
z = = = = − 2.0
σ 0.8 .08
n 100
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 Hypothesis Testing Example
(continued)

⚫ Is the test statistic in the rejection region?

Reject H0 if  = .05/2  = .05/2

z < -1.96 or
z > 1.96;
otherwise, Reject H0 Do not reject H0 Reject H0

do not -z = -1.96 0 +z = +1.96

reject H0

Here, z = -2.0 < -1.96, so the

test statistic is in the rejection
region
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 Hypothesis Testing Example
(continued)
⚫ Reach a decision and interpret the result

 = .05/2  = .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 US homes is not equal to 3
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 Hypothesis Testing Example

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 Hypothesis Testing Example

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 p-Value in Hypothesis Testing

⚫ p-VALUE is the probability of observing a sample

value as extreme as, or more extreme than, the
value observed, given that the null hypothesis is
true.

⚫ Also called observed level of significance

⚫ In testing a hypothesis, we can also compare the p-

value to with the significance level ().

⚫ If the p-value < significance level, H0 is rejected, else

25 H0 is not rejected.
 p-Value in Hypothesis Testing - Example

Recall the last problem where the

hypothesis and decision rules
were set up as:
H0:  ≤ 200
H1:  > 200
Reject H0 if Z > Z
where Z = 1.55 and Z =2.33

Reject H0 if p-value < 

0.0606 is not < 0.01

Conclude: Fail to reject H0

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 p-Value in Hypothesis Testing

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 What does it mean when p-value < ?

(a) .10, we have some evidence that H0 is not true.

(b) .05, we have strong evidence that H0 is not true.

(c) .01, we have very strong evidence that H0 is not true.

(d) .001, we have extremely strong evidence that H0 is not

true.

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 t Test of Hypothesis for the Mean (σ
Unknown)

⚫ Convert sample result ( x ) to a t test statistic

Hypothesis
Tests for 

σ Known σ Unknown

Consider the test

The decision rule is:
H0 : μ = μ0
x − μ0
H1 : μ  μ0 Reject H 0 if t =  t n -1, α
s
(Assume the population is normal) n
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 t Test of Hypothesis for the Mean (σ
Unknown)
(continued)
⚫ For a two-tailed test:
Consider the test
H0 : μ = μ0 (Assume the population is normal,
and the population variance is
H1 : μ  μ0 unknown)

The decision rule is:

x − μ0 x − μ0
Reject H 0 if t =  − t n -1, α/2 or if t =  t n -1, α/2
s s
n n
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 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 H0: μ = 168
s = $15.40. Test at the H1: μ  168
 = 0.05 level.
(Assume the population distribution is normal)

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 Example Solution: Two-Tail Test

H0: μ = 168 /2=.025 /2=.025

H1: μ  168

⚫  = 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 , .025 = ± 2.0639 Do not reject H0: not sufficient evidence that
true mean cost is different than $168

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 Text Book Example

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 Tests of the Population Proportion

⚫ Involves categorical variables

⚫ Two possible outcomes
– “Success” (a certain characteristic is present)
– “Failure” (the characteristic is not present)

⚫ Fraction or proportion of the population in the

“success” category is denoted by P
⚫ Assume sample size is large

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 Proportions
(continued)

⚫ Sample proportion in the success category is

denoted by

ˆp = x = number of successesin sample

n sample size

Hypothesized
population proportion
p −
Sample proportion
z=
 (1 −  )
n
Sample size
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 Text Book Example

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 Text Book Example

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 End of Chapter 10

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