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Introduction to Hypothesis Testing PPT @ BEC DOMS

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You are on page 1of 54

Chapter Goals

After completing this chapter, you should be able to:

Formulate null and alternative hypotheses for applications involving a single population mean or proportion 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

2

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 Q = $42

population proportion

Example: The proportion of adults in this city with cell phones is p = .68

3

States the assumption (numerical) to be tested

Example: The average number of TV sets in U.S. Homes is at least three ( )

H0 : u 3

H0 : u 3

H0 : x u 3

4

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 u sign May or may not be rejected

(continued)

Is the opposite of the null hypothesis

e.g.: The average number of TV sets in U.S. homes is less than 3 ( HA: Q < 3 )

Challenges the status quo Never contains the = , or u sign May or may not be accepted Is generally the hypothesis that is believed (or needs to be supported) by the researcher

6

Claim: the population mean age is 50. (Null Hypothesis: H0: Q = 50 )

Population

Now select a random sample

Is x ! 20 likely if Q = 50?

If not likely, REJECT Null Hypothesis Suppose the sample mean age is 20: x = 20

Sample

Sampling Distribution of x

20

x Q = 50

If H0 is true

8

Level of Significance, E

Defines unlikely values of sample statistic if null hypothesis is true

Defines rejection region of the sampling distribution

Typical values are .01, .05, or .10

Is selected by the researcher at the beginning Provides the critical value(s) of the test

9

Level of significance = E

H0 : HA :

3 <3

E

Lower tail test

H0 : 3 HA : > 3

Upper tail test

E

0

H0 : = 3 HA : 3

E/2

Two tailed test

E/2

0

10

Type I Error

Reject a true null hypothesis Considered a serious type of error The probability of Type I Error is E Called level of significance of the test Set by researcher in advance

11

Type II Error

Fail to reject a false null hypothesis The probability of Type II Error is

12

Possible Hypothesis Test Outcomes State of Nature Decision Key: Outcome (Probability) Do Not Reject H0 Reject H0 H0 True No error (1 - E ) Type I Error ( E) H0 False Type II Error ( ) No Error (1- )

13

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 ( E ) Type II error probability ( )

14

, then

All else equal,

when the difference between hypothesized parameter and its true value

15

Convert sample statistic (e.g.: ) to test x statistic ( Z or t statistic ) Determine the critical value(s) for a specified level of significance E from a table or computer If the test statistic falls in the rejection region, reject H0 ; otherwise do not reject H0

16

The cutoff value, -z or x , is called a critical value H 0: HA: 3 <3

Reject H0

-z x

Do not reject H0

x E ! zE

n

17

The cutoff value,

H 0: HA:

3 >3

Do not reject H0

z x

Reject H0

x E ! zE

18

There are two cutoff values (critical values):

H 0: HA:

=3 {3

or z /2 x x

/2 Lower

E/2

E/2

Reject H0

/2 Upper

-z x

Do not reject H0

/2 /2

0

0

z x

Reject H0

/2 /2

Lower

Upper

x E/2 ! s z E/2

19

Convert sample statistic ( ( Z or t statistic ) ) to a test statistic x

Hypothesis Tests for Q W Known W Unknown

Large Samples

Small Samples

20

Hypothesis Tests for W Known The test statistic is: W Unknown

z !

x n

Large Samples

Small Samples

21

Hypothesis Tests for Q W Known The test statistic is:

But is sometimes approximated using a z:

W Unknown

t n1

x ! s n

z !

x n

Large Samples

Small Samples

22

Hypothesis Tests for Q W Known The test statistic is: W Unknown

t n1

x ! s n

Large Samples

(The population must be approximately normal)

Small Samples

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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

24

Test the claim that the true mean # of TV sets in US homes is at least 3. (Assume = 0.8)

1. 2. Specify the population value of interest Formulate the appropriate null and alternative hypotheses

3.

HA:

25

4. Determine the rejection region

E = .05

Reject H0

Do not reject H0

-z = -1.645

This is a one-tailed test with E = .05. Since is known, the cutoff value is a z value: Reject H0 if z < zE = -1.645 ; otherwise do not reject H0

26

5. Obtain sample evidence and compute the statistic test Suppose a sample is taken with the following results: n = 100, x = 2.84 (W = 0.8 is assumed known)

Then the test statistic is:

z !

x n

27

6. Reach a decision and interpret the result

E = .05 z

Reject H0 Do not reject H0

-1.645 -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

28

An alternate way of constructing rejection region:

Now expressed in x, not z units x

Reject H0 Do not reject H0

E = .05

2.8684 2.84

x ! z

! 3 1.645

29

Convert Sample Statistic (e.g. Statistic ( Z or t statistic ) ) to Test x

Obtain the p-value from a table or computer Compare the p-value with E

If p-value < E , reject H0 If p-value u E , do not reject H0

30

p-value: Probability of obtaining a test statistic more extreme ( or u ) than the observed sample value given H0 is true

Also called observed level of significance Smallest value of E for which H0 can be rejected

31

p-value example

Example: How likely is it to see a sample mean of 2.84 (or something further below the mean) if the true mean is Q = 3.0?

P( x 2.84 | ! 3.0)

E = .05 p-value =.0228 x 2.8684 2.84 3

32

p-value example

Compare the p-value with E

If p-value < E , reject H0 If p-value u E , do not reject H0

E = .05

(continued)

Here: p-value = .0228 E = .05 Since .0228 < .05, we reject the null hypothesis

p-value =.0228

2.8684 2.84

3

33

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 W = 10 is known)

Form hypothesis test: H 0: HA : 52 > 52 the average is not over $52 per month the average is greater than $52 per month

(i.e., sufficient evidence exists to support the managers claim)

34

(continued)

Suppose that E = .10 is chosen for this test Find the rejection region:

Reject H0

E = .10

Do not reject H0

z =1.28

Reject H0

35

What is z given E = 0.10? Standard Normal Distribution Table (Portion)

.90

.10 E = .10

Z .07

.08

.09

.50 .40

0 1.28

Critical Value = 1.28

36

(continued)

Obtain sample evidence and compute the test statistic Suppose a sample is taken with the following results: n = 64, x = 53.1 (W=10 was assumed known)

Then the test statistic is:

z !

x n

53.1 52 ! ! 0.88 10 64

37

Example: Decision

Reach a decision and interpret the result:

Reject H0

(continued)

E = .10

Do not reject H0

1.28 z = .88

Reject H0

Do not reject H0 since z = 0.88 1.28 i.e.: there is not sufficient evidence that the mean bill is over $52

38

p -Value Solution

Calculate the p-value and compare to E

p-value = .1894

Reject H0 E = .10

(continued)

0

Do not reject H0

1.28 z = .88

Reject H0

39

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: = 168 E = 0.05 level.

(Assume the population distribution is normal)

HA:

{ 168

40

E = 0.05

E/2=.025 E/2=.025

Reject H0

-t /2 -2.0639

!

Do not reject H0

1.46

t /2 2.0639

Reject H0

t n1 !

x s n

Do not reject H0: not sufficient evidence that true mean cost is different than $168

41

Involves categorical values Two possible outcomes

Success (possesses a certain characteristic) Failure (does not possesses that characteristic)

42

Proportions

(continued)

x number of successes in sample p! ! n sample size

When both np and n(1-p) are at least 5, p can be approximated by a normal distribution with mean and standard deviation p) p(1 !p ! P p

n

43

The sampling distribution of p is normal, so the test statistic is a z value: Hypothesis Tests for p np u 5 and n(1-p) u 5 np < 5 or n(1-p) < 5

Not discussed in this chapter

44

z!

pp p(1 p) n

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 E = .05 significance level.

3

45

E = .05= .08 H0 : p n = 500, p = .05

Test Statistic:

z! pp ! p(1 p) n .05 .08 ! 2.47 .08(1 .08) 500

HA: p { .08

.025

-1.96 0 1.96

Decision:

Reject H0 at E = .05

Conclusion:

.025

-2.47

46

p -Value Solution

Calculate the p-value and compare to E

(For a two sided test the p-value is always two sided)

Reject H0 E/2 = .025

Do not reject H0

(continued)

p-value = .0136:

0

47

Type II Error

Type II error is the probability of failing to reject a false H0 Suppose we fail to reject H0: when in fact the true mean is

u 52 = 50

E 50

Reject H0: u 52

52

Do not reject H0 : u 52

48

Type II Error

the true mean is Q = 50

(continued)

50

Reject H0: Q u 52

52

Do not reject H0 : Q u 52 49

Type II Error

Suppose we do not reject H0:

(continued)

u 52 when in fact

= 50

Here, = P( x u cutoff ) if = 50

E

50

Reject H0: u 52

52

Do not reject H0 : u 52 50

Calculating

Suppose n = 64 ,

cutoff ! x E ! z E

(for H0 : u 52)

= 6 , and E = .05

6 ! 52 1.645 ! 50.766 n 64

So = P( x u 50.766 ) if = 50

E

50 50.766 52

Do not reject H0 : u 52 51

Reject H0: u 52

Calculating

(continued)

Suppose n = 64 ,

= 6 , and E = .05

Probability of type II error: E

50

Reject H0: u 52

= .1539

52

Do not reject H0 : u 52 52

Using PHStat

Options

53

Input

Output

54

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