t-Test for Mean (sect 8.

4)

When we have small sample size (n < 30), and

population standard deviation (σ) is unknown
to us. We will use:

Test Statistic formula:

X̄ − µ
t= √
s/ n

Assumptions for t-test to be valid:

1. random sample drawn from population

2. the population is (approximately) normaly
distributed.

1
H0: µ = number (null hypothesis)
H1: Three variations (alternative hypothesis)

1. µ > number (upper-tailed)

2. µ < number (lower-tailed)

3. µ 6= number (two-tailed)

Note:
1. t is the test statistic from the formula
2. tα and tα/2 are values from t-distribution
table with n-1 degrees of freedom

2
Ex: Eercise 8.4, 8

Urban Canadians spent on average of 62.1 min-

utes commuting to and from work. A chamber
of commerce executive claims that the average
commute time in her city is less than the Cana-
dian’s average. She randomly selects 25 com-
muters and finds the average commute time is
53.9 minutes with a sample standard deviation
of 12.9 minutes. At α = 0.10, test the execu-
tive’s claim.

3
Ex: Exercise 8.4, 12

A university reports that the mean salary of

student parents is $91,600. The president from
another university randomly surveys 28 families
and finds that their average income is $88,500
with sample standard deviation $10,000. Can
the president conclude that there is a differ-
ence? At α = 0.05, is he correct?

4
When to use Z test or t test?

1. σ known or n ≥ 30, use

X̄ − µ
z= √
σ/ n

2. σ unknown and n < 30, use

X̄ − µ
t= √
s/ n

5
z-test for proportions (sect 8.5)

Test Statistic:
p̂ − p
Z=q
p(1 − p)/n

where

p̂ = X
n
p = population proportion
n = sample size

6
H0: p = number (null hypothesis)
H1: Three variations (alternative hypothesis)

1. p > number (upper-tailed)

2. p < number (lower-tailed)

3. p 6= number (two-tailed)

Note:
1. Z is the test statistic from the formula
2. Zα and Zα/2 are values from Z score table

7
Ex: Exercise 8.5, 18

A survey of earned doctorates in Canadian uni-

versities claims that 64% of them received teach-
ing assistantships. A university dean feels that
this figure is low for her province. A random
sample of 50 PhD students finds that 27 have
assistantships. At α = 0.05, is the dean cor-
rect?

8
Testing the Difference Between Two Means:
Large Samples (Section 9.2)

There are situations where we are interested

in comparing two groups. How could we make
conclusions that one group is different from
another group?

Ex: Exercise9.2, 10
We are interest if there is a difference between
Calgary and Edmonton regarding house price.
We randomly sample 35 houses in Calgary, and
find out that mean house price is $358,103
with sample standard deviation $21,471. We
randomly sample 40 houses in Edmonton, and
find out that mean house price is $303,304
with sample standard deviation $14,636.

Can we conclude that Calgary has a higher av-

erage house price than Edmonton, simply be-
cause $358, 103 > $303, 304?
9
Z test for comparing two means
(X̄1 − X̄2) − (µ1 − µ2)
Z= r
σ12 σ22
n1 + n2

Note:
1. X̄1 and X̄2 are means from two samples
2. µ1 and µ2 are population means of two
groups
3. n1 and n2 are sizes of two samples

Assumptions for the Z test to be valid:

1.Two samples must be independent of each
other.
2.Large sample (n1 ≥ 30, and n2 ≥ 30). If
σ1, σ2 not known, use s1, s2.

10
Ex: cont
Is there enough evidence to reject the claim
that the vaerage cost of a home in both loca-
tions is the same? Use α = 0.01

11