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BA 2606
Summer 2014
Chapter 11 Introduction to Hypothesis Testing
Section 11-1 Concepts of Hypothesis Testing

Researchers are interested in answering many types of questions

Does a new medication lower a patients blood pressure
significantly?
Does a new diet soda have a higher preference rating?

Hypothesis Testing can be used to determine whether a statement

about a population parameter should or shouldnt be rejected.

The null hypothesis, denoted H0 is a tentative assumption about a

population parameter and, in our case, will be a statement about the
value of a population parameter, like or . It will contain a condition
of equality.

The alternative hypothesis, denoted HA is the opposite of what is stated

in the null hypothesis.

Our objective is to determine whether to reject H0 (there is sufficient

evidence to infer that HA is true) or fail to reject H0 (there is insufficient
evidence to infer that HA is true). We will be making inferences on the
population based on the sample results.

There are two possible errors to be made.

Type I error or rejecting H0 when H0 is true. The probability of Type I
error is denoted . This is type of error is controlled by the
experimenter who specifies a maximum allowable error, usually less
than 10 %.
Type II error or accepting H0 when it is false. The probability of Type
II error is denoted .
Null Hypothesis
Reject
Fail to Reject
ie. Accept

True
P(type I error)=
Significance level
1-
Confidence Level

False
1-
Power of the test
P(Type II error)=

Example:
Suppose the null hypothesis is that all systems are operating satisfactorily
with regard to a NASA lift off. Describe Type I and Type II errors.

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We will be examining and calculating further in Section 11.3

Section 11-2 Testing the Population Mean , when the Population

Standard Deviation, , is Known
Assumptions:
That the population that the sample is drawn from is normally
distributed.
Sample is randomly selected.
Populations standard deviation, , is known.
Note: If is unknown we will use the t distribution , in Chapter 12.
There are three types of null/alternative hypotheses we can use:
H 0 : 0

H 0 : 0

H 0 : 0

H A : 0
left- tailed

H A : 0
right-tailed

H A : 0
two tailed

Note the condition of equality in each of the null hypotheses. In your text,
they solely use = symbol in the null hypothesis. This is theoretically incorrect,
but is adopted by many texts. On tests and assignments I will accept either.
Eg. The manager of the Danvers-Hilton Resort Hotel stated that the average
guest bill for a weekend is $600 or less. A member of the hotels accounting
staff noticed that guests bills have been increasing of late. The accountant
will use a sample of weekend guest bills to test the managers claim. What
type of test is this? Right tailed
Eg.

State the null and alternative hypothesis for each conjecture.

a.
A researcher thinks that if expectant mothers use vitamin pills
the birthweight of the babies will increase. The average
birthweights of the population is 8.6 pounds.
b.
An engineer hypothesizes that the mean number of defects can
be decreased in a manufacturing process of compact discs by
using robots instead of humans for certain tasks. The mean
number of defective discs per 1000 is 18.
c.
A psychologist feels that playing soft music during a test will
change the results of the test. In the past, the mean of the
scores is 73.

Procedure for Test of Hypothesis

Null and Alternative Hypothesis (one of the above sets)

Level of Significance () If unspecified use =0.05

X 0

Test Statistic: Z

Rejection Region:
Two-tailed : Reject H0 if Z <

Z or if Z > Z
2
2

Right-tailed: Reject H0 if Z > Z

Left-tailed: Reject H0 if Z < - Z

Calculations & P-Value

Conclusion

This format is to be used at all times hypothesis testing is appropriate.

P-Value Approach

The p-value of a test of hypothesis is the probability of observing a test

statistic at least as extreme as the one computed, given H0 is true. It
measures the support (or lack of support) provided by the sample for
H0
If the p-value , the value of the test statistic is in the rejection region
Reject H0 if p-value
Most computer packages calculate p-value and not the rejection
region. In all of our tests and assignments I will expect both the p-value
approach and the rejection region, If is unspecified, assume it to be
0.05.

Examples with class: pages 368 371 # 11.8, 11.10, 11.12, 11.13, 11.15,
11.17, 11.29, 11.37, 11.44
11.8 Rejection region: z > z.03 = 1.88
z

x
/

51 50
5/ 9

.60

p-value = P(Z > .60) = 1 .7257 = .2743

There is not enough evidence to infer that > 50.

11.10 Rejection region: z < z .025 1.96 or z > z.025 = 1.96

z

x
/

100 100
10 / 100

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p-value = 2P(Z > 0) = 2(.5) = 1.00
There is not enough evidence to infer that

100.

11.12 Rejection region: z < z .05 1.645

z

x
/

48 50
15 / 100

1.33

p-value = P(Z < 1.33) = .0918

There is not enough evidence to infer that < 50.

11.13

11.15

11.17

11.29

a) Z=1.20, p-value = .5-.3849=.1151

b) Z=2, p-value=.5-.4772=.0228
c) As n increases, so does the value of the test statistic, while
the p-value decreases.
a) Z=1, p-value=2(.5-.3413)=.3174
b) Z=2, p-value=2(.5-.4772)=.0456
c) Z=3, p-value=2(.5-.4987)=.0026
d) As the sample mean increases, so does the test
statistic, while the p-value decreases.
a) Z=-4, p-value0
b) Z=-2, p-value=.5-.4772=.0228
c) Z=-1, p-value=.5-.3413=.1587
d) As the increases, so does the test statistic and the pvalue.
H 0 : 50
H A : 50
Assume amounts of tv watched are normally distributed

0.05

X 0

Test Statistic: Z

Rejection Region: Reject H0 if Z > 1.645

Calculations:
1065
X
59.1666666 ,
18

64693

1065 2

17

18

9.9425

59.1666 50
3.89
10
18

p-value0

Conclusion:
Reject the null hypothesis. There is sufficient evidence to infer
that the mean is greater than 50 minutes.

11.37

H 0 : 560
H A : 560
Assume that GMAT scores are normally distributed
=0.05

Test Statistic:

X 0

Rejection Region: Reject H0 if Z > 1.645

Calculations:
From Appendix A, X 569

569 560
.80
,
50
20

p-value =.5-.2881=.2119

Conclusion:
Fail to reject the null hypothesis , there is insufficient evidence to
conclude that the deans claim is correct.
Example:
A researcher claims that the average cost of mens athletic shoes is less than
$80. He selects a random sample of 36 pairs of shoes from a catalog and
finds that the average cost is $75. In the past, the population standard
deviation is 19.2. Assuming costs are normally distributed, is there enough
evidence to support the researchers claim at 0.10 level of significance?
H 0 : 80
H A : 80
=0.01

Test Statistic:

X 0

Rejection Region: Reject H0 if Z < - 1.28

Calculations:

75 80
1.56 ,
19.2
36

Conclusion:

p-value = 0.0594

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Reject the null hypothesis , there is sufficient evidence to
conclude that the researchers claim is correct. Note: Here the
difference is said to be significant. However, when the null hypothesis
is rejected, there is always a chance of a Type I error. In this case the
probabilility of a Type I error is at most 10%.
11.44

H0 : 4
HA : 4
0.10

Test Statistic:

X 0

Rejection Region: Reject H0 if Z < -1.645 or Z > 1.645

Calculations:
From Appendix A, X 4.84

4.84 4
3.33
2
63

p-value0

Conclusion:
Reject the null hypothesis. There is enough evidence to infer that the
average Alpine skier does not ski 4 times a year.
Note: Confidence Interval Approach to Two-Tailed Tests of
Hypothesis
if 0 does not fall within the (1-)100% C.I., you can reject the
null hypothesis.
For 11.44 :
2
4.84 1.645
4.84 .4145 ( 4.4255,5.2545)
63
Since 4 does not fall between the confidence limits, we can reject the
null hypothesis.

A 90% CI for is:

11-3 Calculating the Probability of a Type II Error

= P ( Accepting H 0 | H 0 is false )
Page 379 # 11.48, 11.49, 11.53
11.48

H 0 : 200
H A : 200

=0.05, =10, n=100, Find , given =203

Reject H0 if Z < -1.96 or Z > 1.96

X 200

Reject H0 if 10

100

X 200

<-1.96 or 10

100

1.96

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Reject H0 if X < 198.04 or X > 201.96
Accept H0 if 198.04 < X < 201.96
=P(Accept H0 given HA true)
=P(198.04 < X < 201.96 given =203)
=P(

198.04 203
201.96 203
X 0
)
<
<
10
10

100
100
n

=P ( -4.96 < Z < - 1.04)=.5 - .3508=.1492

11.49

H 0 : 1000
H A : 1000

=0.01, =50, n=25, Find , given =1050

Reject H0 if Z > 2.33
Reject H0 if

X 1000
> 2.33
50
25

Reject H0 if X > 1023.3

Accept H0 if X < 1023.3
=P(Accept H0 given HA true)
=P( X < 1023.3 given =1050)

X 0

=P(

<

1023.3 1050
)
50
25

=P (Z < -2.67) = .5 - .4962=.0038

11.53 a)

H 0 : 40
H A : 40

=0.05, =5, n=25, Find , given =37

Reject H0 if Z < -1.645
Reject H0 if

X 40
<-1.645
5
25

Reject H0 if X < 38.355

Accept H0 if X > 38.355
=P(Accept H0 given HA true)
=P( X > 38.355 given =37)

X 0 38.355 37
)
=P(
>
5
25
n
=P (Z > 1.36)=.5 - .4131 =.0869
b)

H 0 : 40
H A : 40

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=0.15, =5, n=25, Find , given =37
Reject H0 if Z < -1.04
Reject H0 if

X 40
<-1.04
5
25

Reject H0 if X < 38.96

Accept H0 if X > 38.96
=P(Accept H0 given HA true)
=P( X > 38.96 given =37)

X 0 38.96 37
)
=P(
>
5
25
n
=P (Z > 1.96)=.5 - .4750 =.025
c)

As increases, decreases.

This is also the case for increasing values of . An operating characteristic

curve that plots versus illustrates that as increases, decreases. (see
page 377, Figure 11.12)