Which side you stand for..
“Better to acquit 100 guilty
Inferential Data Analysis-I
Making Decision by Inferring Data
Hypothesis Testing
Hypothesis Testing
n Hypothesis testing can be used to determine whether
a statement about the value of a population parameter
should or should not be rejected.
n The null hypothesis, denoted by H 0 , is a tentative
assumption about a population parameter.
n The alternative hypothesis, denoted by H a, is the
opposite of what is stated in the null hypothesis.
n The hypothesis testing procedure uses data from a
sample to test the two competing statements
indicated by H 0 and H a.
men than convict one
innocent one.”
-Justice Oliver Wendell Holmes,
Supreme Court of the United States (1882-1899)
Hypothesis Testing
n Developing Null and Alternative Hypotheses
n Type I and Type II Errors
n Population Mean: s Known
n Population Mean: s Unknown
n Population Proportion
n Hypothesis Testing and Decision Making
n Calculating the Probability of Type II Errors
n Determining the Sample Size for
a Hypothesis Test About a Population mean
Developing Null and Alternative Hypotheses
• It is not always obvious how the null and alternative
hypotheses should be formulated.
• Care must be taken to structure the hypotheses
appropriately so that the test conclusion provides
the information the researcher wants.
• The context of the situation is very important in
determining how the hypotheses should be stated.
• In some cases it is easier to identify the alternative
hypothesis first. In other cases the null is easier.
• Correct hypothesis formulation will take practice.
1
 Developing Null and Alternative Hypotheses Developing Null and Alternative Hypotheses

■ Alternative Hypothesis as a Research Hypothesis ■ Alternative Hypothesis as a Research Hypothesis

• Many applications of hypothesis testing involve • Example:
an attempt to gather evidence in support of a A new teaching method is developed that is
research hypothesis. believed to be better than the current method.
• In such cases, it is often best to begin with the • Alternative Hypothesis:
alternative hypothesis and make it the conclusion The new teaching method is better.
that the researcher hopes to support.
• The conclusion that the research hypothesis is true
• Null Hypothesis:
The new method is no better than the old method.
is made if the sample data provide sufficient
evidence to show that the null hypothesis can be
rejected.

Developing Null and Alternative Hypotheses Developing Null and Alternative Hypotheses

■ Alternative Hypothesis as a Research Hypothesis ■ Alternative Hypothesis as a Research Hypothesis

• Example: • Example:
A new sales force bonus plan is developed in an A new drug is developed with the goal of lowering
attempt to increase sales. blood pressure more than the existing drug.
• Alternative Hypothesis: • Alternative Hypothesis:
The new bonus plan increase sales. The new drug lowers blood pressure more than
the existing drug.
• Null Hypothesis:
The new bonus plan does not increase sales. • Null Hypothesis:
The new drug does not lower blood pressure more
than the existing drug.

Developing Null and Alternative Hypotheses Developing Null and Alternative Hypotheses

■ Null Hypothesis as an Assumption to be Challenged ■ Null Hypothesis as an Assumption to be Challenged

• We might begin with a belief or assumption that • Example:
a statement about the value of a population The label on a soft drink bottle states that it
parameter is true. contains 67.6 fluid ounces.

• We then using a hypothesis test to challenge the • Null Hypothesis:

assumption and determine if there is statistical The label is correct. µ > 67.6 ounces.
evidence to conclude that the assumption is
• Alternative Hypothesis:
incorrect.
The label is incorrect. µ < 67.6 ounces.
• In these situations, it is helpful to develop the null
hypothesis first.

2
 Summary of Forms for Null and Alternative Null and Alternative Hypotheses
Hypotheses about a Population Mean
■ The equality part of the hypotheses always appears ■ Example: Metro EMS
in the null hypothesis. A major west coast city provides one of the most
n In general, a hypothesis test about the value of a comprehensive emergency medical services in the
population mean µ must take one of the following world. Operating in a multiple hospital system
three forms (where µ0 is the hypothesized value of with approximately 20 mobile medical units, the
the population mean). service goal is to respond to medical emergencies
with a mean time of 12 minutes or less.
H 0 : µ ³ µ0 H 0 : µ £ µ0 H 0 : µ = µ0 The director of medical services wants to
H a : µ < µ0 H a : µ > µ0 H a : µ ¹ µ0 formulate a hypothesis test that could use a sample
of emergency response times to determine whether
One-tailed One-tailed Two-tailed or not the service goal of 12 minutes or less is being
(lower-tail) (upper-tail) achieved.

Null and Alternative Hypotheses Type I Error

The emergency service is meeting n Because hypothesis tests are based on sample data,
H 0: µ < 12 we must allow for the possibility of errors.
the response goal; no follow-up
action is necessary. ■ A Type I error is rejecting H0 when it is true.
■ The probability of making a Type I error when the
The emergency service is not
H a: µ > 12 null hypothesis is true as an equality is called the
meeting the response goal;
level of significance.
appropriate follow-up action is
necessary. ■ Applications of hypothesis testing that only control
the Type I error are often called significance tests.
where: µ = mean response time for the population
of medical emergency requests

Type II Error Type I and Type II Errors

■ A Type II error is accepting H 0 when it is false.

Population Condition
■ It is difficult to control for the probability of making
a Type II error. H0 True H0 False
Conclusion (µ < 12) (µ > 12)
■ Statisticians avoid the risk of making a Type II
error by using “do not reject H 0” and not “accept H 0”. Do not reject H0 Correct
Type II Error
(Conclude µ < 12) Decision

Reject H0 Correct
Type I Error Decision
(Conclude µ > 12)

3
 Critical Value Approach to
One-Tailed Hypothesis Testing
n The test statistic z has a standard normal probability
distribution.
Inference n We can use the standard normal probability

about distribution table to find the z-value with an area

of a in the lower (or upper) tail of the distribution.

Population Parameter n The value of the test statistic that established the
boundary of the rejection region is called the
critical value for the test.
■ The rejection rule is:
• Lower tail: Reject H0 if z < -za
• Upper tail: Reject H 0 if z > za

Lower-Tailed Test About a Population Mean: Upper-Tailed Test About a Population Mean:
s Known s Known
■ Critical Value Approach ■ Critical Value Approach

Sampling Sampling
distribution distribution
of z =
x - µ0 x - µ0
s/ n of z =
Reject H 0 s/ n Reject H0

a = .10 a = .05
Do Not Reject H 0 Do Not Reject H0

z z
-za = -1.28 0 0 za = 1.645

p-Value Approach to Suggested Guidelines for Interpreting p-Values

One-Tailed Hypothesis Testing
n The p-value is the probability, computed using the
test statistic, that measures the support (or lack of
support) provided by the sample for the null
hypothesis.
n If the p-value is less than or equal to the level of
significance a, the value of the test statistic is in the
rejection region.
n Less than .01
Overwhelming evidence to conclude Ha is true.
■ Between .01 and .05
Strong evidence to conclude Ha is true.
■ Between .05 and .10
Weak evidence to conclude Ha is true.

n Reject H 0 if the p-value < a . ■ Greater than .10

Insufficient evidence to conclude Ha is true.

4
 Lower-Tailed Test About a Population Mean: Upper-Tailed Test About a Population Mean:
s Known s Known
p-Value Approach p-Value < a , p-Value < a ,
■ ■ p-Value Approach
so reject H0 . so reject H0 .
Sampling
a = .10 Sampling distribution a = .04
x - µ0
distribution of z =
s/ n
x - µ0
of z =
s/ n
p-value p-Value
= .072 = .011

z z
z = -za = 0 0 za = z=
-1.46 -1.28 1.75 2.29

Steps of Hypothesis Testing Steps of Hypothesis Testing

Step 1. Develop the null and alternative hypotheses. Critical Value Approach
Step 2. Specify the level of significance a. Step 4. Use the level of significance to determine the
Step 3. Collect the sample data and compute the critical value and the rejection rule.
value of the test statistic. Step 5. Use the value of the test statistic and the rejection
rule to determine whether to reject H0.
p-Value Approach
Step 4. Use the value of the test statistic to compute the
p-value.
Step 5. Reject H 0 if p-value < a.

One-Tailed Tests About a Population Mean: One-Tailed Tests About a Population Mean:
s Known s Known
■ Example: Metro EMS n p -Value and Critical Value Approaches
The response times for a random sample of 40
medical emergencies were tabulated. The sample 1. Develop the hypotheses. H0: µ < 12
mean is 13.25 minutes. The population standard Ha: µ > 12
deviation is believed to be 3.2 minutes.
The EMS director wants to perform a hypothesis 2. Specify the level of significance. a = .05
test, with a .05 level of significance, to determine
whether the service goal of 12 minutes or less is 3. Compute the value of the test statistic.
being achieved. x - µ 13.25 - 12
z= = = 2.47
s / n 3.2 / 40

5
 One-Tailed Tests About a Population Mean: One-Tailed Tests About a Population Mean:
s Known s Known
n p –Value Approach ■ p –Value Approach

4. Compute the p –value. Sampling

distribution a = .05
For z = 2.47, cumulative probability = .9932. x - µ0
of z =
s/ n
p–value = 1 - .9932 = .0068
p-value
5. Determine whether to reject H 0. = .0068
Because p–value = .0068 < a = .05, we reject H 0.
There is sufficient statistical evidence z
to infer that Metro EMS is not meeting 0 za = z=
the response goal of 12 minutes. 1.645 2.47

One-Tailed Tests About a Population Mean: Illustration-1:

s Known Does TSM Café needs a Billing Machine

n Critical Value Approach The manager of TSM Café is thinking about establishing a
d 11/22/10 6:31 PM Page 383
new billing system for the store’s credit customers. After
4. Determine the critical value and rejection rule. a thorough financial analysis, he determines that the new
system will be cost-effective only if the mean monthly
For a = .05, z.05 = 1.645
account is more than Rs. 170. A random sample of 400
Reject H 0 if z > 1.645 monthly accounts is drawn, for which the sample mean is
Rs. 178. The manager knows that the accounts are
5. Determine whether to reject H 0. approximately normally distributed with a standard
deviation of Rs 65. Can the manager conclude from this
Because 2.47 > 1.645, we reject H 0.
There is sufficient statistical evidence
thatI Nthe
T Rnew
O D Usystem
C T I O will
N TO be H YPOTHESIS TESTING
cost-effective?
383
to infer that Metro EMS is not meeting
Data
the response goal of 12 minutes.
asked how many minutes of sports he watched on shown here. Assuming that the standard deviation is
television daily. The responses are listed here. It is .05 inch, can we conclude at the 5% significance
known that ! ! 10. Test to determine at the 5% sig- level that the mean diameter is not .50 inch?
nificance level whether there is enough statistical
.48 .50 .49 .52 .53 .48 .49 .47 .46 .51
evidence to infer that the mean amount of television
watched daily by all young adult men is greater than 11.34 Xr11-34 Spam e-mail has become a serious and costly
50 minutes. nuisance. An office manager believes that the aver-
Illustration 2 3
age amount of time spent by office workers reading
50 48 65 74 66 37 45 68 64
andSpam
deleting spam
e-mail has becomeexceeds 25 costly
a serious and minutes per day.
nuisance.
65Federal
58 Express (FedEx) sends invoices to customers requesting
55 52 63 59 57 74 65
payment within 30 days. Each bill lists an address, and customers
are expected to use their own envelopes to return their payments.
ToAn office manager believes that the average amount of
test this belief, he takes a random
time spent by office workers reading and deleting spam sample of
11.30 Xr11-30 Thetheclub
Currently, professional
mean and at ofathedifficult
standard deviation public
amount of time 18 exceeds
workers and measures
25 minutes per day. Tothetest amount
this belief, of time each
he takes
taken to pay bills are 24 days and 6 days, respectively. The chief
course boasts
financial officerthat
(CFO)his course
believes is so tough
that including a stampedthatself- the spends reading
a random sampleand of deleting
18 workersspam. The results
and measures the are
amount of time each spends reading and deleting spam.
average golfer loses a dozen or more golf balls
addressed (SSA) envelope would decrease the amount of time. She
dur- listed here. If the population of times is normal
The results are listed here. If the population of times is with
calculates that the improved cash flow from a 2-day decrease in the
ing apayment
round of would
period golf.payA for
dubious
the costs ofgolfer sets out
the envelopes and to a standard
normal withdeviation
a standardof 12 minutes,
deviation can the
of 12 minutes, can manager
the
manager infer at the 1% significance level that he is
stamps. Any further decrease in the payment period would
showgenerate
that the proToistest
a profit. fibbing. He
her belief, sheasks a random
randomly selects 220sam- infer at the 1% significance level that he is correct?
correct?
ple ofcustomers
15 golfers who just completed their rounds
and includes a stamped self-addressed envelope with
their invoices. The numbers of days until payment is received were
to 35 48 29 44 17 21 32 28 34
report the number
recorded. Can the CFO of golfthat
conclude balls each
the plan lost.
will be Assuming
profitable?
23 13 9 11 30 42 37 43 48
that Data
the number of golf balls lost is normally distrib-
uted with a standard deviation of 3, can we infer at The following exercises require the use of a computer and soft-
the 10% significance level that the average number ware. The answers may be calculated manually. See Appendix A
of golf balls lost is less than 12? for the sample statistics.
1 14 8 15 17 10 12 6 11.35 Xr11-35 A manufacturer of lightbulbs advertises that,
14 21 15 9 11 4 8 on average, its long-life bulb will last more than
5,000 hours. To test the claim, a statistician took a
11.31 Xr11-31 A random sample of 12 second-year university random sample of 100 bulbs and measured the
6
students enrolled in a business statistics course was amount of time until each bulb burned out. If we
drawn. At the course’s completion, each student was assume that the lifetime of this type of bulb has a
asked how many hours he or she spent doing home- standard deviation of 400 hours, can we conclude at
work in statistics. The data are listed here. It is known the 5% significance level that the claim is true?
that the population standard deviation is ! ! 8.0. The
 p-Value Approach to
Two-Tailed Hypothesis Testing
n Compute the p-value using the following three steps:
1. Compute the value of the test statistic z.
2. If z is in the upper tail (z > 0), compute the
probability that z is greater than or equal to the
value of the test statistic. If z is in the lower tail
(z < 0), compute the probability that z is less than or
equal to the value of the test statistic.
3. Double the tail area obtained in step 2 to obtain
the p –value.
n The rejection rule:
Reject H 0 if the p-value < a .
Two-Tailed Tests About a Population Mean:
s Known
■ Example: Glow Toothpaste
The production line for Glow toothpaste is
designed to fill tubes with a mean weight of 6 oz.
Periodically, a sample of 30 tubes will be selected in
order to check the filling process.
Quality assurance procedures call for the
continuation of the filling process if the sample
results are consistent with the assumption that the
mean filling weight for the population of toothpaste
tubes is 6 oz.; otherwise the process will be adjusted.
Two-Tailed Tests About a Population Mean:
s Known
n p –Value and Critical Value Approaches
1. Determine the hypotheses. H 0: µ = 6
H a: µ ¹ 6
2. Specify the level of significance. a = .03
3. Compute the value of the test statistic.
x - µ0 6.1 - 6
z= = = 2.74
s / n .2 / 30
Critical Value Approach to
Two-Tailed Hypothesis Testing
n The critical values will occur in both the lower and
upper tails of the standard normal curve.
n Use the standard normal probability distribution
table to find za/2 (the z-value with an area of a/2 in
the upper tail of the distribution).
■ The rejection rule is:
Reject H0 if z < -za/2 or z > za/2.
Two-Tailed Tests About a Population Mean:
s Known
■ Example: Glow Toothpaste
Assume that a sample of 30 toothpaste tubes
provides a sample mean of 6.1 oz. The population
standard deviation is believed to be 0.2 oz.
Perform a hypothesis test, at the .03 level of
significance, to help determine whether the filling
process should continue operating or be stopped and
corrected.
Two-Tailed Tests About a Population Mean:
s Known
n p –Value Approach
4. Compute the p –value.
For z = 2.74, cumulative probability = .9969
p–value = 2(1 - .9969) = .0062
5. Determine whether to reject H0.
Because p–value = .0062 < a = .03, we reject H0.
There is sufficient statistical evidence to
infer that the alternative hypothesis is true
(i.e. the mean filling weight is not 6 ounces).
7
 Two-Tailed Tests About a Population Mean: Two-Tailed Tests About a Population Mean:
s Known s Known
n p-Value Approach n Critical Value Approach

1/2 1/2 4. Determine the critical value and rejection rule.

p -value p -value
= .0031 = .0031 For a/2 = .03/2 = .015, z.015 = 2.17
Reject H0 if z < -2.17 or z > 2.17
a/2 = a/2 =
5. Determine whether to reject H0.
.015 .015
Because 2.74 > 2.17, we reject H0.
z There is sufficient statistical evidence to
z = -2.74 0 z = 2.74 infer that the alternative hypothesis is true
-za/2 = -2.17 za/2 = 2.17 (i.e. the mean filling weight is not 6 ounces).

Two-Tailed Tests About a Population Mean: Confidence Interval Approach to

s Known Two-Tailed Tests About a Population Mean
n Critical Value Approach n Select a simple random sample from the population
and use the value of the sample mean x to develop
Sampling the confidence interval for the population mean µ.
distribution (Confidence intervals are covered in Chapter 8.)
x - µ0
of z = n If the confidence interval contains the hypothesized
s/ n
value µ0, do not reject H0. Otherwise, reject H0.
Reject H 0 Do Not Reject H 0 Reject H 0 (Actually, H0 should be rejected if µ0 happens to be
equal to one of the end points of the confidence
a/2 = .015 a/2 = .015
interval.)
z
-2.17 0 2.17

Confidence Interval Approach to Illustration: Jio Vs Others

Two-Tailed Tests About a Population Mean
In recent years, several companies have been formed to compete with
The 97% confidence interval for µ is Reliance JIO in unlimited calls data service. All advertise that their post-
s paid rates are lower than Reliance JIO’s, and as a result their bills will be
x ± za / 2 = 6.1 ± 2.17(.2 30) = 6.1 ± .07924 lower. Reliance JIO has responded by arguing that there will be no
n difference in billing for the average consumer and Jio’s data speed is
or 6.02076 to 6.17924 faster. Suppose that a data analyst working for Reliance JIO determines
that the mean and standard deviation of monthly post-paid bills for all
Because the hypothesized value for the its residential customers are $17.09 and $3.87, respectively. He then
population mean, µ0 = 6, is not in this interval, takes a random sample of 100 customers and recalculates their last
the hypothesis-testing conclusion is that the month’s bill using the rates quoted by a leading competitor. Assuming
that the standard deviation of this population is the same as for Reliance
null hypothesis, H 0: µ = 6, can be rejected. JIO, can we conclude at the 5% significance level that there is a
difference between the average Reliance JIO bill and that of the leading
competitor?

Data

8
 Tests About a Population Mean:
s Unknown
■ Test Statistic
x - µ0
t=
s/ n
This test statistic has a t distribution
with n - 1 degrees of freedom.
p -Values and the t Distribution
n The format of the t distribution table provided in most
statistics textbooks does not have sufficient detail
to determine the exact p-value for a hypothesis test.
n However, we can still use the t distribution table to
identify a range for the p-value.
n An advantage of computer software packages is that
the computer output will provide the p-value for the
t distribution.
One-Tailed Test About a Population Mean:
s Unknown
n p –Value and Critical Value Approaches
1. Determine the hypotheses. H 0: µ < 65
H a: µ > 65
2. Specify the level of significance. a = .05
3. Compute the value of the test statistic.
x - µ0 66.2 - 65
t= = = 2.286
s / n 4.2 / 64
Tests About a Population Mean:
s Unknown
■ Rejection Rule: p -Value Approach
Reject H0 if p –value < a
■ Rejection Rule: Critical Value Approach
H0: µ > µ0 Reject H0 if t < -ta
H0: µ < µ0 Reject H0 if t > ta
H0: µ = µ0 Reject H0 if t < - ta/2 or t > ta/2
Example: Highway Patrol
■ One-Tailed Test About a Population Mean: s Unknown
A State Highway Patrol periodically samples
vehicle speeds at various locations on a particular
roadway. The sample of vehicle speeds is used to
test the hypothesis H0: µ < 65.
The locations where H0 is rejected are deemed the
best locations for radar traps. At Location F, a
sample of 64 vehicles shows a mean speed of 66.2
mph with a standard deviation of 4.2 mph. Use a
= .05 to test the hypothesis.
One-Tailed Test About a Population Mean:
s Unknown
n p –Value Approach
4. Compute the p –value.
For t = 2.286, the p–value must be less than .025
(for t = 1.998) and greater than .01 (for t = 2.387).
.01 < p–value < .025
5. Determine whether to reject H0.
Because p–value < a = .05, we reject H0.
We are at least 95% confident that the mean speed
of vehicles at Location F is greater than 65 mph.
9
 One-Tailed Test About a Population Mean: One-Tailed Test About a Population Mean:
s Unknown s Unknown
n Critical Value Approach

4. Determine the critical value and rejection rule.

For a = .05 and d.f. = 64 – 1 = 63, t.05 = 1.669

Reject H 0 if t > 1.669 Reject H0

5. Determine whether to reject H 0. Do Not Reject H0

a = .05
CH012.qxd 11/22/10 8:14 PM Page 401
Because 2.286 > 1.669, we reject H 0.
We are at least 95% confident that the mean speed t
of vehicles at Location F is greater than 65 mph. 0 ta =
Location F is a good candidate for a radar trap. 1.669
INFERENCE ABOUT A POPULATION
401

limestone, all plentiful materials mined in numerous countries. It is more expensive to

manufacture aluminum cans from recycled cans than from bauxite. Newspapers are an
exception. It can be profitable to recycle newspaper. A major expense is the collection
from homes. In recent years, many companies have gone into the business of collecting
used newspapers from households and recycling them. A financial analyst for one such
company has recently computed that the firm would make a profit if the mean weekly
newspaper collection from each household exceeded 2.0 pounds. In a study to deter-
mine the feasibility of a recycling plant, a random sample of 148 households was drawn
from a large community, and the weekly weight of newspapers discarded for recycling
Example for each household was recorded and listedData next. Do these data provide sufficient evi-
In the near future, nations will likely have to do more to save the dence to allow the analyst to conclude that a recycling plant would be profitable?
environment. Possible actions include reducing energy use and recycling.
Currently, most products manufactured from recycled material are Weights of Discarded Newspapers
considerably more expensive than those manufactured from material 2.5 0.7 3.4 1.8 1.9 2.0 1.3 1.2 2.2 0.9 2.7 2.9 1.5 1.5 2.2
found in the earth. For example, it is approximately three times as 3.2 0.7 2.3 3.1 1.3 4.2 3.4 1.5 2.1 1.0 2.4 1.8 0.9 1.3 2.6
expensive to produce glass bottles from recycled glass than from silica 3.6 0.8 3.0 2.8 3.6 3.1 2.4 3.2 4.4 4.1 1.5 1.9 3.2 1.9 1.6
sand, soda ash, and limestone, all plentiful materials mined in numerous 3.0 3.7 1.7 3.1 2.4 3.0 1.5 3.1 2.4 2.1 2.1 2.3 0.7 0.9 2.7
countries. It is more expensive to manufacture aluminium cans from 1.2 2.2 1.3 3.0 3.0 2.2 1.5 2.7 0.9 2.5 3.2 3.7 1.9 2.0 3.7
recycled cans than from bauxite. Newspapers are an exception. It can be 2.3 0.6 0.0 1.0 1.4 0.9 2.6 2.1 3.4 0.5 4.1 2.2 3.4 3.3 0.0
profitable to recycle newspaper. A major expense is the collection from 2.2 4.2 1.1 2.3 3.1 1.7 2.8 2.5 1.8 1.7 0.6 3.6 1.4 2.2 2.2
homes. In recent years, many companies have gone into the business of 1.3 1.7 3.0 0.8 1.6 1.8 1.4 3.0 1.9 2.7 0.8 3.3 2.5 1.5 2.2
collecting used newspapers from households and recycling them. A 2.6 3.2 1.0 3.2 1.6 3.4 1.7 2.3 2.6 1.4 3.3 1.3 2.4 2.0
1.3 1.8 3.3 2.2 1.4 3.2 4.3 0.0 2.0 1.8 0.0 1.7 2.6 3.1
financial analyst for one such company has recently computed that the firm
would make a profit if the mean weekly newspaper collection from each
SOLUTION
household exceeded 2.0 pounds. In a study to determine the feasibility of a
recycling plant, a random sample of 148 households was drawn from a
large community, and the weekly weight of newspapers discarded for
recycling for each household was recorded and listed next. Do these data IDENTIFY
provide sufficient evidence to allow the analyst to conclude that a recycling The problem objective is to describe the population of the amounts of newspaper dis-
plant would be profitable? carded by each household in the population. The data are interval, indicating that the
parameter to be tested is the population mean. Because the financial analyst needs to
determine whether the mean is greater than 2.0 pounds, the alternative hypothesis is
H1: m 7 2.0
As usual, the null hypothesis states that the mean is equal to the value listed in the alter-
native hypothesis:
H0: m = 2.0
A Summary of Forms for Null and Alternative The test statistic isTests About a Population Proportion
Hypotheses About a Population Proportion x - m
t = n = n- 1
■The equality part of the hypotheses always appears ■ s>Test
2n Statistic
in the null hypothesis. p - p0
n In general, a hypothesis test about the value of a z=
COMPUTE sp
population proportion p must take one of the
following three forms (where p0 is the hypothesized MANUALLY where:
value of the population proportion). The manager believes that the cost of a Type I error (concluding that the mean is
greater than 2 when it isn’t) is quite high. p0 (1 - p0 )he sets the significance level at
s p =Consequently,
1%. The rejection region is n
H 0: p > p0 H 0: p < p0 H 0: p = p0
t 7 ta,n = t.01,148 L t.01,150 = 2.351
H a: p < p0 H a: p > p0 H a: p ≠ p0
assuming np > 5 and n(1 – p) > 5
One-tailed One-tailed Two-tailed
Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
(lower tail) (upper tail) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

10
 Tests About a Population Proportion Two-Tailed Test About a
Population Proportion
■ Rejection Rule: p –Value Approach ■ Example: National Safety Council (NSC)
Reject H 0 if p –value < a For a Christmas and New Year’s week, the
National Safety Council estimated that 500 people
■ Rejection Rule: Critical Value Approach
would be killed and 25,000 injured on the nation’s
H 0: p < p0 Reject H 0 if z > za roads. The NSC claimed that 50% of the accidents
H 0: p > p0 Reject H 0 if z < -za would be caused by drunk driving.
A sample of 120 accidents showed that 67 were
H 0: p = p0 Reject H 0 if z < -za/2 or z > za/2
caused by drunk driving. Use these data to test the
NSC’s claim with a = .05.

Two-Tailed Test About a Two-Tailed Test About a

Population Proportion Population Proportion
n p –Value and Critical Value Approaches n p-Value Approach

1. Determine the hypotheses. H 0 : p = .5 4. Compute the p -value.

H a : p ¹ .5 For z = 1.28, cumulative probability = .8997
2. Specify the level of significance. a = .05 p–value = 2(1 - .8997) = .2006

3. Compute the value of the test statistic. 5. Determine whether to reject H0.
Because p–value = .2006 > a = .05, we cannot reject H0.
p0 (1 - p0 ) .5(1 - .5)
a common
sp = = = .045644
n 120
error is using
p in this p - p0 (67 /120) - .5
formula z= = = 1.28
sp .045644

Two-Tailed Test About a

Population Proportion
n Critical Value Approach

4. Determine the criticals value and rejection rule.

For a/2 = .05/2 = .025, z.025 = 1.96

Reject H 0 if z < -1.96 or z > 1.96

5. Determine whether to reject H 0.

Because 1.278 > -1.96 and < 1.96, we cannot reject H 0.

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