Professional Documents
Culture Documents
n
s
n
s
S
X X
Hypothesis Test of Difference
between Means
The calculated value of z is
For =.01 and a two-tailed test, the Z-
table value is 2.58
Since is greater than , the
null hypothesis is rejected
19 . 22
) ( ) (
2 1
2 1 2 1
=
=
X X
calc
S
X X
z
Hypothesis Testing of
Proportion
Quality control dept of a light bulb
company claims 95% of its products
are defect free
The CEO checks 225 bulbs and finds
only 87% to be defect free
Is the claim of 95% true at .05 level of
significance ?
So we have hypothesized values
and sample values
Hypothesis Testing of
Proportion
The null hypothesis is H
o
:
p=0.95
The alternate hypothesis is H
a
: p =0.95
First, calculate the standard error of the
proportion using hypothesized values as
Since np and nq are large, we can use the
Z table. The appropriate z value is 1.96
0145 .
225
05 . 95 .
=
= =
n
q p
o o
p
o
Hypothesis Testing of
Proportion
The limits of the acceptance region
are
Since the sample proportion of 0.87
does not fall within the acceptance
region, the CEO should reject the
quality control departments claim
) 978 . , 922 (. ) 0145 . 96 . 1 ( 95 . 96 . 1 = =
p o
p o
Hypothesis Testing of Difference
between Proportions
Manager wants to see if John and
Linda, two salespeople, have the
same conversion
He picks samples and finds that
Sample
size
Number
converted
Proportion
converted
John 100 84 0.84 (= )
Linda 100 82 0.82(= )
Hypothesis Testing of Difference
between Proportions
Are their conversion rates different at 0.05
significance level?
The null hypothesis is H
o
:
The alternate hypothesis is H
a
:
The best estimate of p (proportion of
success)
is
also,
83 . 0
2 1
2 1
=
+
+
=
n n
p n p n
p
l j
.17
= = p q
Hypothesis Testing of Difference
between Proportions
An estimate of the standard error of the
difference of proportions is
The z value can be calculated as
The z value obtained from the table is 1.96
(for ). Thus, we fail to reject the null
hypothesis
053 .
2 1
= + =
n
q p
n
q p
l j
p p
o
38 .
0 ) (
=
=
l j
p p
l j
calc
p p
z
o
The Probability Values (P-value)
Approach to Hypothesis Testing
P-value provides researcher with
alternative method of testing
hypothesis without pre-specifying
o
Largest level of significance at
which we would not reject H
o
The Probability Values (P-value)
Approach to Hypothesis Testing
Difference Between Using o and p-value
Hypothesis testing with a pre-specified
o
Researcher is trying to determine, "is the
probability of what has been observed less
than o?
Reject or fail to reject H
o
accordingly
The Probability Values (P-value)
Approach to Hypothesis Testing
Using the p-Value
Researcher can determine "how unlikely is
the result that has been observed?
Decide whether to reject or fail to reject H
o
without being bound by a pre-specified
significance level
In general, the smaller the p-value, the
greater is the researcher's confidence in
sample findings
The Probability Values (P-value)
Approach to Hypothesis Testing:
Example
H
o
: = 25 (hypothesized value of
population)
H
a
: = 25 (alternative hypothesis)
n = 50
= 25.2
o = 0.7
SE( )= = 0.1; Z= =2
From Z-table, prob Z >2 is 0.0228. As this
is a 2-tailed test, the p-value is 2
0.228=.0456
X
o
n
o
X
X
o
The Probability Values (P-value)
Approach to Hypothesis Testing
Using the p-Value
P-value is generally sensitive to
sample size
A large sample should yield a low p-
value
P-value can report the impact of the
sample size on the reliability of the
results
Relationship between C.I and
Hypothesis Testing (Example 1)
A direct mktr knows that average no of
purchases per month in entire database is
5.6
By sampling loyals he finds that their
average is 6.1(i.e, =6.1)
Is it merely a sampling accident?
H
o
: = 5.6 (hypothesized value of
population)
H
a
: = 5.6 (alternative hypothesis)
n = 35
o = 2.5
Relationship between C.I and
Hypothesis Testing (Example 1)
Std err =0.42
The appropriate Z for =.05 is 1.96
The Confidence Interval is
= (4.78, 6.42)
Since 6.1 falls in the interval, we
cannot reject the null hypothesis
n
X
o
o =
o
X
o 96 . 1
0
Confidence Intervals and
Hypothesis Testing
Hypothesis testing and Confidence
Intervals are two sides of the same
coin.
t = = Interval estimate for
x
x
ts X
s
X
) (
Relationship between C.I and
Hypothesis Testing (Example 2)
Revisit the first example we started with
Test the performance of two lists in terms of
response rates
Sample (1,000) from the first list provides a
response rate of 3.5%
Sample (1,200) from the second list provides
a response rate of 4.5%
Do the two lists (population) really have a
difference or is it an artifact of the sample?
Relationship between C.I and
Hypothesis Testing (Example 2)
C.I. of list 1:
(0.035)+/- 1.96*(SE
1
)
SE
1
= Sqrt[(0.035*0.965)/1000]=0.006
C.I.
1
=(0.0232,0.0467)
C.I. of list 2:
(0.045)+/-1.96*(SE
2
)
SE
2
=Sqrt[(0.045*0.955)/1200]=0.006
C.I.
2
=(0.033,0.0568)
What can we infer based on these confidence
Intervals?
Lack of sufficient evidence to infer that there is any
difference between the response rates in the two
samples.
References
http://www.experiment-resources.com
http://www.ehow.com
http://stattrek.com
http://www.methodspace.com
http://www.aqr.org.uk Association of
Qualitative Research
The books supplied by our instructor