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Course 1 Objectives
Students able to
Formulate
Formulate
hypothesis
Know
Know
what
Compute
Review of Estimating
Population Value
Lower
Confidence
Limit
Point Estimate
Width of
confidence interval
Upper
Confidence
Limit
Point Estimates
We can estimate a
Population Parameter
with a Sample
Statistic
(a Point Estimate)
Mean
Proportion
Confidence
Intervals
How much uncertainty is associated with a
confidence intervals
Estimation Process
Random Sample
Population
(mean, , is
unknown)
Sample
Mean
x = 50
I am 95%
confident that
is between
40 & 60.
Confidence Level
Confidence Level
Confidence in which the
sample
Confidence interval estimate
x z /2
.025
2
.025
2
z units:
z.025= -1.96
x units:
Lower
Confidence
Limit
0
Point Estimate
z.025= 1.96
Upper
Confidence
Limit
Margin of Error
Margin of Error (e): the amount added and
x z /2
e z /2
Data variation, :
as
Sample size, n :
as n
Level of confidence, 1 - :
if 1 -
Chap 7-15
Example
A sample of 11 circuits from a large
Chap 7-16
Example
(continue
d)
Solution:
x z /2
Interpretation
We are 95% confident that the true mean
Students t Distribution
Note: t
z as n increases
Standard
Normal
(t with df = )
t (df = 13)
t-distributions are bellshaped and symmetric, but
have fatter tails than the
normal
t (df = 5)
0
Chap 7-19
x t /2
Chap 7-20
s
n
Approximation
for large n
x z /2
s
n
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 = $42
population proportion
Example: The proportion of adults in this
city with cell phones is p = .68
States the
assumption (numerical)
to be tested
Is
parameter,
H0 : 3
statistic
not
about
H : x a sample
3
0
Always contains
sign
May
= , or
The Alternative
Hypothesis, HA
Population
Is x 20 likely if = 50?
If not likely,
REJECT
Null Hypothesis
Suppose
the sample
mean age
is 20: x = 20
Now select a
random sample
Sample
20
If it is unlikely that
we would get a
sample mean of
this value ...
= 50
If H0 is true
... then we
reject the null
hypothesis that
= 50.
Level of Significance,
Defines unlikely values of sample
sampling distribution
Is designated by
, (level of significance)
Level of Significance
and the Rejection Region
Level of significance =
H0: 3
HA: < 3
H0: 3
HA: > 3
H0: = 3
HA: 3
Represents
critical value
1-
Rejection
region is
shaded
1-
/2
Two tailed test
1-
0
/2
Errors in Making
Decisions
Type I Error
Reject a true null hypothesis
Considered a serious type of error
Errors in Making
Decisions
(continued)
Type II Error
Fail to reject a false null hypothesis
Outcomes and
Probabilities
Possible Hypothesis Test Outcomes
State of Nature
Key:
Outcome
(Probability)
Decision
H0 True
H0 False
Do Not
Reject
H0
No error
(1 - )
Type II Error
()
Reject
H0
Type I Error
()
No Error
(1-)
, then
when
when
when
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
H0: 3
HA: < 3
Reject H0
-z
x
x z
Do not reject H0
z or x , is called a
critical value
H0: 3
HA: > 3
Do not reject H0
x z
Reject H0
H0: = 3
HA:
3
z/2
or
x/2
x/2
Lower
Upper
/2
Reject H0
/2
Do not reject H0
-z/2
x/2
Lower
x /2 z /2
Reject H0
z/2
x/2
Upper
Critical Value
Approach to Testing
Convert sample statistic x(
) to a test statistic
( Z or t statistic )
Hypothesis
Tests for
Known
Unknown
Large
Samples
Small
Samples
Unknown
x
z
Large
Samples
Small
Samples
(continued)
Hypothesis
Tests for
Known
The test statistic is:
t n1
s
n
But is sometimes
approximated
using a z:
x
z
Unknown
Large
Samples
Small
Samples
(continued)
Hypothesis
Tests for
Known
Unknown
t n1
s
n
Large
Samples
(The population must be
approximately normal)
Small
Samples
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
Hypothesis Testing
Example
(continued)
Reject H0
-z= -1.645
Do not reject H0
Hypothesis Testing
Example
x
2.84 3 .16
z
2.0
0.8
.08
n
100
Hypothesis Testing
Example
(continued)
-1.645
-2.0
Do not reject H0
Hypothesis Testing
Example
(continued)
= .05
x
Reject H0
2.8684
2.84
Do not reject H0
0.8
x z
3 1.645
2.8684
n
100
Since x = 2.84 < 2.8684,
) to Test
Statistic ( Z or t statistic )
Obtain the p-value from a table or
computer
Compare the p-value with
If
If
p-Value Approach to
Testing
(continued)
rejected
p-value example
Example: How likely is it to see a sample
2.84 3.0
P z
0.8
100
= .05
p-value =.0228
x
2.8684
2.84
p-value example
(continued)
, reject H0
If p-value
, do not reject H0
= .05
p-value =.0228
2.8684
2.84
Reject H0
= .10
Do not reject H0
z=1.28
Reject H0
Review:
Finding Critical Value - One
Tail
What is z given =
0.10?
.90
.10
= .10
.50 .40
Standard Normal
Distribution Table (Portion)
0 1.28
Critical Value
= 1.28
.07
.08
.09
x
53.1 52
z
0.88
10
n
64
Example: Decision
(continued)
= .10
Do not reject H0
1.28
0
z = .88
Reject H0
p -Value Solution
(continued)
1.28
z = .88
Reject H0
P( x 53.1 | 52.0)
53.1 52.0
P z
10
64
H0: = 168
HA:
168
H0: = 168
HA:
168
= 0.05
/2=.025
Reject H0
-t/2
-2.0639
n = 25
is unknown, so
use a t statistic
Critical Value:
t24 = 2.0639
t n1
/2=.025
Do not reject H0
1.46
Reject H0
t/2
2.0639
x
172.50 168
1.46
s
15.40
n
25
characteristic)
Proportions
(continued)
denoted by p
x
number of successes in sample
p
n
sample size
When both np and n(1-p) are at least 5, p
P p
p(1 p)
p
n
distribution of p
is normal, so the
test statistic is a z
value:
pp
p(1 p)
n
Hypothesis
Tests for p
np 5
and
n(1-p) 5
np < 5
or
n(1-p) < 5
Not discussed
in this chapter
Check:
n p = (500)(.08) = 40
n(1-p) = (500)(.92) = 460
H0: p = .08
HA: p .
08= .05
n = 500, p = .05
Reject
.025
.025
-1.96
-2.47
1.96
.05 .08
2.47
.08(1 .08)
500
Decision:
pp
p(1 p)
n
Reject H0 at = .05
Conclusion:
There is sufficient
evidence to reject the
companys claim of 8%
response rate.
p -Value Solution
(continued)
Reject H0
/2 = .025
Reject H0
/2 = .025
.0068
.0068
-1.96
z = -2.47
p-value = .0136:
1.96
z = 2.47
Type II Error
Type II error is the probability of
50
52
Reject
H0: 52
Do not reject
H0 : 52
Type II Error
(continued)
50
Reject
H0: 52
52
Do not reject
H0 : 52
Type II Error
(continued)
Here, = P( x cutoff ) if = 50
50
Reject
H0: 52
52
Do not reject
H0 : 52
Calculating
Suppose n = 64 , = 6 , and = .05
6
52 1.645
50.766
n
64
cutoff x z
(for H0 : 52)
So = P( x 50.766 ) if =
50
50
50.766
Reject
H0: 52
52
Do not reject
H0 : 52
Calculating
(continued)
50.766 50
P( x 50.766 | 50) P z
P(z 1.02) .5 .3461 .1539
64
Probability of
type II error:
= .1539
50
Reject
H0: 52
52
Do not reject
H0 : 52
Chapter Summary
Addressed hypothesis testing
methodology
Performed z Test for the mean (
known)
Discussed pvalue approach to
hypothesis testing
Performed one-tail and two-tail tests . . .
Chapter Summary
(continued)
unknown)
Performed z test for the proportion
Discussed type II error and