Tests For Variance

Hypothesis Test about Population Variance

Hypothesis Test about Two Population Variances

Recall
Variance is a measurement of the spread between numbers in a data
set. The variance measures how far each number in the set is from
the mean.
It is found by squaring the standard deviation.
2 = population variance
2 = sample variance; a point estimate of 2
()2

Formula: 2 =

NOTE: Use STAT function of your sci-calc. to determine variance by

squaring the value of standard deviation ().

Probability Distributions for Tests on Variance

Chi-Square ( 2 ) Distribution is the probability distribution used as
the basis for interval estimation and hypothesis tests about the

variance of a single normal population.

F Distribution is the probability distribution used to conduct

hypothesis tests about the variance of two normal populations.

Interval Estimate of a Population Variance

( )
/

( )

()

where the values are based on a chi-square distribution with

degrees of freedom and where is the confidence coefficient.

Taking the square root of the lower and upper bounds of the above
function gives the interval estimate of the population standard
deviation.

C
h
i
s
q
u
a
r
e

If = .05;
n = 10, then:

C.V. at = .025; df = 9
2
. = .

T
a
b
l
e

C.V. at 1 = .975; df = 9
2
. = .

C.V. at = .05;
df(num) =8;
df(den) = 9

F
T
a
b
l
e

= .
C.V. at = .10;
df(num) = 9;
df(den) = 9

= .
C.V. at = .01;
df(num) = 10;
df(den) = 9

= .

Forms of 0 & for Population Variance 0

Test Option

Rejection Rule: C.V. Approach

Upper-Tail

0 : 2 0 2
: 2 > 0 2

Reject 0 if 2 2

Lower-Tail

0 : 2 0 2
: 2 < 0 2

2
Reject 0 if 2 (1
2)

Two-Tail

: 2

0
= 0
: 2 0 2

Reject 0 if 2 2 or
2
Reject 0 if 2 (1
2)

P-Value Approach: Reject 0 if p. value

Hypothesis Test about Population Variance

Test Statistic

)
=

Where:
2 = chi-square computed value
2 = sample variance
02 = hypothesized population variance
PHStat One Sample Tests Chi-Square Test for the Variance

Hypothesis Test about Population Variance

EXAMPLE 1. A manufacturer of chocolate must monitor the temperature at
which the chocolates are baked. Too many variation will cause inconsistency
in the taste. Past records show that the population standard deviation of the
temperature has been 1.2oF. A random sample of 20 batches of chocolate is
selected which gave 2.1oF standard deviation of the temperature. Test if the
temperature variation has increased using 5% level of significance.
a. Formulate Ho and Ha
b. Construct a 95% interval estimate of population variance.
c. Calculate test statistic
d. Determine critical & p values
e. Write your decision & conclusion (use any approach)

Hypothesis Test about Population Variance

2
2
EXAMPLE 1. 02 = 1.22 ; 2 = 2.12 ; = 20; = 19; .025
= 32.852; .975
= 8.907
Answers:
PHStat One Sample Tests
Chi-Square Test for the Variance
a. 0 : 2 1.44; : 2 > 1.44

b.
c.
d.
e.

19(4.41)
19 4.41
2

= 2.55oF to 9.41oF
32.852
8.907
19(4.41)
2
=
= 58.1875
1.44
2
W/ df=19, .05
= 30.144; p.value < .005
Reject Ho. Thus, 2 > 1.44 (the temperature

variance has increased from 1.44)

Data
Null Hypothesis
s^2=
Level of Significance
Sample Size
Sample Standard Deviation
Intermediate Calculations
Degrees of Freedom
Half Area
Chi-Square Statistic
Upper-Tail Test
Upper Critical Value
p-Value
Reject the null hypothesis

1.44
0.05
20
2.1

19
0.025
58.1875

30.1435
0.0000

Forms of 0 & for Two Population

Variances
Test Option

Rejection Rule: C.V. Approach

Upper-Tail

0 : 1 2 2 2
: 1 2 > 2 2

Reject 0 if

Two-Tail

0 : 1 2 = 2 2
: 1 2 2 2

Reject 0 if /2

NOTE: Since the population with a larger variance will be assigned as population
1, the Lower-Tail Test has been eliminated

P-Value Approach: Reject 0 if p. value

Hypothesis Test about Two Population

Variances
Test Statistic for Two Population Variances with =

Where:
1 2 = Larger sample variance
2 2 = Smaller sample variance
PHStat Two Sample Tests (Summarized Data) F Test for Differences in
Two Variances

Hypothesis Test about Two Population

Variances
EXAMPLE 2. Bank Inc. with a branch located in a commercial district, BANK X,
has developed an improved process for serving customers during noon to
1pm lunch period. The waiting time of all customer during this hour is
recorded over a period of one week. A random sample of 15 customers is
selected, and the results (in minutes) are as follows:
4.21 5.55 3.02 5.13 4.77 2.34 3.54 3.20
4.50 6.10 0.38 5.12 6.46 6.19 3.79
A random sample of 15 customers is selected from another branch, BANK Y,
within the same time period, and the results (in minutes) are as follows:
9.66 5.90 8.02 5.79 8.73 3.82 8.01 8.35
10.49 6.68 5.64 4.08 6.17 9.91 5.47

Hypothesis Test about Two Population

Variances
EXAMPLE 2 (Continued). Is there evidence of a difference in the
variability of the waiting time between the two branches? Use =
0.05.
a. Formulate Ho and Ha
b. Calculate test statistic
c. Determine critical & p values
d. Write your decision & conclusion (use any approach)

Hypothesis Test about Population Variance

EXAMPLE 2. 2 = 2.68 ; 2 = 4.34; = = 15
Answers:
2
2
2
2
2
2
d.
Do
not
reject
Ho.
Thus,

a. 0 : = ; :

b. =

4.34
2.68

(Theres no significant difference in the

variability of the waiting time between
two branches.)

= 1.6194 1.62

c. W/ df=14/14, .025 = 2.95;

. > .20

Area in Upper Tail

Degrees of
Freedom
Denominator
14

D.F. Numerator 15

0.10

2.01

0.05

2.46

0.025

2.95

.01

3.66

Hypothesis Test about Population Variance

EXAMPLE 2. 2 = 2.68 ; 2 = 4.34; = = 15
PHStat Output:

F Test for Differences in Two Variances

PHStat Two Sample Tests

(Summarized Data) F Test for
Differences in Two Variances

Data
Level of Significance
Larger-Variance Sample
Sample Size
Sample Variance
Smaller-Variance Sample
Sample Size
Sample Variance

0.05

15
4.34
15
2.68

Intermediate Calculations
F Test Statistic
Population 1 Sample Degrees of Freedom
Population 2 Sample Degrees of Freedom

1.6194
14
14

Two-Tail Test
Upper Critical Value
p-Value
Do not reject the null hypothesis

2.9786
0.3779

END OF LECTURE

ACTIVITY
1. An automotive part must be machined to close tolerances to be
acceptable to customers. Production specification call for a
maximum variance in the lengths of the parts of .0004. Suppose
the sample variance for 30 parts turns out to be .0005. Using alpha
.05, test to see if the population variance specification is being
violated.
a.Formulate Ho & Ha
b.Calculate test statistic
c. Determine p-value & critical value
d. Write decision & conclusion
e. Construct a 95% interval estimate for the population variance

ACTIVITY
2. A researcher is interested whether the variance of the annual repair
costs also increases with the age of the automobile. A sample of 26
4-year-old automobiles showed a standard deviation for annual
repair costs of $170; a sample of 25 2-year-old automobiles showed
a standard deviation for annual repair costs of $100. He used 1%
level of significance for the test.
a. State his Ho & Ha
b. Calculate test statistic
c. Determine p-value & critical value
d. Write decision & conclusion

ANSWER KEY

ANSWER KEY
1. Given: 02 = .0004 ; 2 = .0005; = 30; = .05
a. 0 : 2 .0004; : 2 > .0004
2

29(.0005)
.0004

b.
=
= 36.25
2
c. .05
= 36.25; p.value > .10
d. Do not reject Ho. Thus, 2 .0004 (The population variance
specification is not being violated)

e.

29(.0005)
45.722

29 .0005
16.047

= .0003 to .0009

ANSWER KEY
2. Given: 4 = 170 ; 2 = 100; 4 = 26; 2 = 25; = .01
Answers:
a. 0 : 4 2 2 2 ; : 4 2 > 2 2

b. =

1702
1002

= 2.89

c. .01 = 2.64; . < .01

d. Reject Ho. Thus, 4 2 > 2 2 (The annual repair costs also
increases with the age of the automobile.)