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Chapter 7
Introduction to
Hypothesis Testing
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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 = $42
population proportion
Example: The proportion of adults in this
city with cell phones is p = .68
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H0 : x 3
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(continued)
Population
H0: = 50 )
Is x 20 likely if = 50?
If not likely,
REJECT
Null Hypothesis
Now select a
random sample
Suppose
the sample
mean age
is 20: x = 20
Sample
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20
If it is unlikely that we
would get a sample
mean of this value ...
= 50
If H0 is true
... if in fact this were
the population mean
x
... then we reject the
null hypothesis that
= 50.
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Level of Significance,
Defines unlikely values of sample
statistic if null hypothesis is true
Defines rejection region of the sampling
distribution
Level of Significance
and the Rejection Region
Level of significance =
H0: 3
HA: < 3
H0: 3
HA: > 3
H0: = 3
HA: 3
Represents
critical value
Rejection
region is
shaded
/2
Two tailed test
/2
0
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Key:
Outcome
(Probability)
Decision
H0 True
H0 False
Do Not
Reject
H0
No error
(1-)
Type II Error
()
Reject
H0
Type I Error
()
No Error
(1-)
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, then
when
when
when
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H0: 3
HA: < 3
Reject H0
-z
x
x z
Do not reject H0
n
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H0: 3
HA: > 3
Do not reject H0
x z
Reject H0
n
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H0: = 3
HA:
3
z/2
or
x/2
x/2
Lower
Upper
/2
Reject H0
/2
Do not reject H0
-z/2
x/2
0
Lower
x /2 z /2
Reject H0
z/2
x/2
Upper
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Unknown
Large
Samples
Small
Samples
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Unknown
x
z
Large
Samples
Small
Samples
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t n1
s
n
But is sometimes
approximated
using a z:
x
z
Unknown
Large
Samples
Small
Samples
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Unknown
t n1
s
n
Large
Samples
Small
Samples
Reject H0
-z= -1.645
Do not reject H0
test
x
2.84 3 .16
z
2.0
0.8
.08
n
100
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-1.645
-2.0
Do not reject H0
= .05
x
Reject H0
2.8684
2.84
Do not reject H0
0.8
x z
3 1.645
2.8684
n
100
Since x = 2.84 < 2.8684,
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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 = 3.0?
P( x 2.84 | 3.0)
2.84 3.0
P z
0.8
100
= .05
p-value =.0228
x
2.8684
2.84
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p-value example
(continued)
p-value =.0228
2.8684
2.84
3
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HA: > 52
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(continued)
Reject H0
= .10
Do not reject H0
z=1.28
Reject H0
Review:
Finding Critical Value - One Tail
What is z given =
0.10?
.90
.10
= .10
.50 .40
1.28
Critical Value
= 1.28
Standard Normal
Distribution Table (Portion)
.07
.08
.09
(continued)
x
53.1 52
z
0.88
10
n
64
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Example: Decision
(continued)
Do not reject H0
1.28
z = .88
Reject H0
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p -Value Solution
(continued)
1.28
z = .88
Reject H0
P( x 53.1 | 52.0)
53.1 52.0
P z
10
64
H0: = 168
HA:
168
/2=.025
Reject H0
-t/2
-1.96
n = 25
is unknown, so
use a t statistic
Critical Value:
t24 = 1.96
t n1
/2=.025
Do not reject H0
1.46
Reject H0
t/2
1.96
x
172.50 168
1.46
s
15.40
n
25
Proportions
(continued)
P p
p
n
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pp
p(1 p)
n
Hypothesis
Tests for p
np 5
and
n(1-p) 5
np < 5
or
n(1-p) < 5
Not discussed
in this chapter
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Check:
n p = (500)(.08) = 40
n(1-p) = (500)(.92) = 460
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H0: p = .08
HA: p .
08= .05
pp
p(1 p)
n
.05 .08
2.47
.08(1 .08)
500
Decision:
Reject
.025
.025
-1.96
-2.47
1.96
Reject H0 at = .05
Conclusion:
There is sufficient
evidence to reject the
companys claim of 8%
response rate.
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p -Value Solution
(continued)
Reject H0
Reject H0
/2 = .025
/2 = .025
.0068
.0068
-1.96
z = -2.47
p-value = .0136:
1.96
z = 2.47
Type II Error
Type II error is the probability of
failing to reject a false H0
50
52
Reject
H0: 52
Do not reject
H0 : 52
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Type II Error
(continued)
50
Reject
H0: 52
52
Do not reject
H0 : 52
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Type II Error
(continued)
50
Reject
H0: 52
52
Do not reject
H0 : 52
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Calculating
Suppose n = 64 , = 6 , and = .05
6
52 1.645
50.766
n
64
cutoff x z
(for H0 : 52)
So = P( x 50.766 ) if =
50
50
50.766
Reject
H0: 52
52
Do not reject
H0 : 52
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Calculating
(continued)
50.766 50
P( x 50.766 | 50) P z
P(z 1.02) .5 .3461 .1539
64
Probability of
type II error:
= .1539
50
Reject
H0: 52
52
Do not reject
H0 : 52
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Chapter Summary
Addressed hypothesis testing
methodology
Performed z Test for the mean ( known)
Discussed pvalue approach to
hypothesis testing
Performed one-tail and two-tail tests . . .
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Chapter Summary
(continued)
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Thank You
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Homeworks:
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