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![Page 1: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/1.jpg)
Hypothesis Testing for the Mean and Variance of a Population
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 2: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/2.jpg)
Hypothesis Testing on the Mean
• Null hypothesis (Ho): A statement concerning a population parameter.
• Alternative hypothesis: A statement in contradiction of the null hypothesis
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 3: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/3.jpg)
Type I and Type II ErrorsActual Situation
Ho True | Ho FalseConclusion
Fail to Reject Ho
Reject Ho
Correct decision
Correct decisionType I error
Type II error
= probability of rejecting the Ho when Ho is true (Type I error) = probability of failing to rejecting the Ho when Ho is false (Type II error)
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 4: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/4.jpg)
Hypothesis Testing Process
• Determine the Ho and Ha
• Determine the significance level
• Compare the sample mean (variance) to the hypothesized mean (variance).
• Decide whether to Fail to reject or Reject Ho
• Determine what the decision means in reference to the problem.
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 5: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/5.jpg)
Example
• Ho: = 5.9
• Ha: 5.9
= .05 = P(rejecting Ho when Ho is true) critical value = ± 1.96
reject H0 ifX 5.9
/ n> 1.96
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 6: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/6.jpg)
Decision Rule
Figure 8.1
Figure 8.2Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 7: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/7.jpg)
ZX 5.9
/ n
X 5.9
s/ n
5.76 5.9
.48 / 75 2.53 Z*
Because - 2.53 < - 1.96, we reject Ho thus weconclude that the average population male height is not equal to 5.9
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 8: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/8.jpg)
Hypothesis Testing5 Step Procedure
• Set up the null and alternative hypothesis
• Define the test statistic
ZX 0
/ n
X 0
s/ n
Define the rejection region Calculate the test statisticGive a conclusion in terms of the problem
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 9: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/9.jpg)
Example 8.2
• Define the hypothesesHo: = 400 Ha: 400
• Define the test statistic
• Define the rejection region (fig8.5)– reject Ho if Z > 1.645 or Z < -1.645
Fig 8.5
ZX 400
/ n
X 400
s/ n
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 10: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/10.jpg)
• Calculate the value of the test statistic
• State the conclusion– There is sufficient evidence to conclude that the
average lifetime of Everglo bulbs is not 400 hours
Z* 411 400
42.5/ 100
11
4.252.59
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 11: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/11.jpg)
Power of a Statistical Test
= P(fail to reject Ho when Ho is false)
• 1- = P(rejecting Ho when Ho is false)
• 1- = the Power of the test
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 12: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/12.jpg)
One Tailed Test for
Example 8.4
Ho: 32.5Ha: < 32.5
Fig 8.8
reject H0 if ZX 32.5
s / n 1.645
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 13: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/13.jpg)
Results support the claim that the average mileagefor the Bullet is less than 32.5 mpg.
Z* 30.4 32.5
5.3 / 50 2.80
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 14: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/14.jpg)
p-Value
• The p-value is the value of at which the hypothesis test procedure changes conclusions based on a given set of data. It is the largest value of for which you will fail to reject Ho
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 15: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/15.jpg)
Procedure for Finding the p-Value
• For Ha: o
p = 2 * (area outside Z*)
• For Ha: > o
p = area to the right of Z*
• For Ha: < o
p = area to the left of Z* Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 16: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/16.jpg)
Fir 8.14
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 17: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/17.jpg)
Interpreting the p-Value
• Classical Approach– reject Ho if p-value <
– fail to reject Ho is p-value
• General rule of thumb– reject Ho if p-value is small (p < .01)
– fail to reject Ho is p-value is large (p > .1)
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 18: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/18.jpg)
Hypothesis Testing on the Mean of a Normal Population: Small Sample
• Normal population
• Population standard deviation unknown
• Small sample
• Student t distribution
• Nonparametric procedure
t X 0
s/ n
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 19: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/19.jpg)
Example 8.8
Ho: = 10Ha: 10
reject Ho if |t | > t.025,17 = 2.11
t X 10
s/ n
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 20: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/20.jpg)
Because 1.83 < 2.11 we fail to reject Ho
Insufficient evidence to reject the Ho that the average output voltage is different from 10 volts
t* 10.331 10
.767 / 181.83
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing
![Page 21: Hypothesis Testing for the Mean and Variance of a Population Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649d6c5503460f94a4ba4b/html5/thumbnails/21.jpg)
Small-Sample Tests on aNormal Population Mean
Two-tailed testHo: = o Ha: o
reject Ho if |t*| > t/2, n-1
One tail testHo: = O Ho: = O Ha: > O Ha: < O
reject Ho if t* > t, n-1 reject Ho if t* < t, n-1
Introduction to Business Statistics, 5e
Kvanli/Guynes/Pavur
(c)2000 South-Western College Publishing