LESSON 4: LEVEL OF SIGNIFICANCE

¡ Level of significance refers to a criterion of judgement upon

which a decision is made regarding the value stated in a null
hypothesis
¡ With the given level of significance and the distribution of the
test statistics, state the decision rule either to reject or fail to
reject the Ho.
1
LESSON 4: LEVEL OF SIGNIFICANCE

¡ There are two actions that one can make on the hypothesis.
One can either reject or fail to reject (accept) a hypothesis. The
table below shows these actions:
ACTION HYPOTHESIS IS HYPOTHESIS IS
TRUE FALSE
REJECT THE HYPOTHESIS ERROR COMMITTED NO ERROR COMMITED

FAIL TO REJECT (ACCEPT) NO ERROR COMMITTED ERROR COMMITTED

THE HYPOTHESIS 2
LESSON 4: LEVEL OF SIGNIFICANCE

When making a decision about a proposed hypothesis based

on sample data, we run the risk of making an error.
Type I Error – (a error) when we reject the null hypothesis when
in fact it is true. The value of a represents the probability of
committing this type of error; that is,
a = P(H0 is rejected/H0 is true)
The value of a represents the significance level of the test.
3
LESSON 4: LEVEL OF SIGNIFICANCE

TYPE II ERROR – (OR b ERROR) WHEN WE ACCEPT THE NULL

HYPOTHESIS WHEN IN FACT IT IS FALSE. THE VALUE OF b REPRESENTS THE
PROBABILITY OF COMMITTING THIS TYPE OF ERROR.
THAT IS
b = P(H0 IS NOT REJECTED/H0 IS FALSE)

4
LESSON 4: LEVEL OF SIGNIFICANCE (a) – TYPE ONE ERROR

It is the maximum probability of committing a type one error.

The P is symbolizes by α ( 0.10, 0.05, and 0.01).

Example.
When α=0.10, there is a 10% chance of rejecting a true Ho
when in fact it is true.
5
LESSON 4: LEVEL OF SIGNIFICANCE (a)- TYPE OF TEST
TYPE OF TEST:
¡ One- Tailed Test

¡ Two-Tailed Test

6
LESSON 4: LEVEL OF SIGNIFICANCE (a)- TYPE OF TEST

¡ Ho: “The average daily number of text

messages that a Grade 11 student sends is
¡ EXAMPLE: Determine the type of equal to 100.”
test used in each of the ff.
information.
¡ Ha: “The average daily number of text
Type of Test: Two-tailed Test ⋙ messages that a Grade 11 student sends is not
equal to 100.”
7
 LESSON 4: LEVEL OF SIGNIFICANCE (a)- TYPE OF TEST

¡ Ho: “The average life of the newly

developed battery for a tablet is at least 24
¡ EXAMPLE: Determine the type of hours .”
test used in each of the ff.
information.
¡ Ha: “The average life of the newly
Type of Test: One-tailed Test(left tail) ⋙ developed battery for a tablet is less than 24
hours.”
8
LESSON 4: LEVEL OF SIGNIFICANCE (a)- TYPE OF TEST

¡ Ho: “Today is Liza’s birthday..”

¡ EXAMPLE: Determine the type of
test used in each of the ff.
information. ¡ Ha: “Liza’s birthday is on
Type of Test: Two-tailed Test ⋙ another day and not today.”

9
LESSON 4: LEVEL OF SIGNIFICANCE (a)- TYPE OF TEST

¡ Ho: “There is no significant

¡ EXAMPLE: Determine the type of
difference between the group who are
test used in each of the ff. taking iron supplements compared to
information. the group who do not.”
¡ Ha: “There is significant difference
Type of Test: Two-tailed Test ⋙ between the group who are taking
iron supplements compared to the
group who do not.” 10
LESSON 4: LEVEL OF SIGNIFICANCE (a)

Determine the type of test used in each of the ff. information.

Given: 𝜇0 = 100
n = 80
𝐻! : 𝜇 ≤ 100
𝑥̅ = 110
𝜎=5 𝐻" : 𝜇 > 100
Type of Test: One-tailed Test (right tail)
∝ = 1% = 0.01
11
LESSON 4: LEVEL OF SIGNIFICANCE (a)

Determine the type of test used in each of the ff. information.

Given: 𝜇0 = 20
n = 45
𝐻! : 𝜇 = 20
𝑥̅ = 14
𝜎=5 𝐻" : 𝜇≠20
Type of Test: Two-tailed Test
∝ = 10% = 0.10
12
LESSON 4: LEVEL OF SIGNIFICANCE (a)

Determine the type of test used in each of the ff. information.

Given: 𝜇0 = 0.78
n = 20
𝐻! : 𝜇 = 0.78
𝑥̅ = 0.62
s = 0.14 𝐻" : 𝜇 < 0.78
Type of Test: One-tailed Test (left tail)
∝ = 1% = 0.01
13
14
LESSON 5: P-VALUE ≫≫ DECISION MAKING

¡ The probability of obtaining a sample

outcome, given that the value stated in the
null hypothesis is true.
¡ Probability of obtaining the
observed/calculated value of a test statistic.
¡ When p-value ≤ 𝜶, reject Ho. Otherwise,
do not reject the Ho.
15
LESSON 5: P-VALUE FOR Z-TEST

¡ To find the p-value for the z-test use MS Excel.

Ø One-tailed:
Syntax: =1-NORMSDIST(/z/)
Ø Two-tailed:
Syntax: =2*(1-NORMSDIST(/z/))
16
LESSON 5: P-VALUE FOR Z-TEST

EXAMPLE: Find the p-value and decide whether to reject or not to

reject the Ho
128−125
i. z= = 1.61
1. Given: 𝜇0 = 125 15
!
65
n = 65
𝐻!: 𝜇 = 125 ii. Type of Test: One-tailed Test
𝑥̅ = 128
𝐻" : 𝜇 > 125
iii. P-value = 0.0537 = 5.37%
𝜎 = 15
∝ = 5% = 0.05 iv. Since p-value ≰ 𝛂
5.37% ≰ 5%
17
Thus, do not reject Ho
LESSON 5: P-VALUE FOR Z-TEST

EXAMPLE: Find the p-value and decide whether to reject or not to

reject the Ho
110−100
i. z = 21 = 2.74
!
33
2. Given: 𝜇0 = 100
𝐻!: 𝜇 ≤ 100 ii. Type of Test: One-tailed Test
n = 33 𝐻" : 𝜇 > 100
𝑥̅ = 110 iii. P-value = 0.31%

𝜎 = 21 iv. Since p-value ≤ 𝛂

0.31% ≤ 1%
∝ = 1% = 0.01
Thus, reject Ho 18
LESSON 5: P-VALUE FOR Z-TEST

EXAMPLE: Find the p-value and decide whether to reject or not to

reject the Ho
0.68−0.78
i. z = 0.22 = −2.91
!
41
3. Given: 𝜇0 = 0.78
𝐻!: 𝜇 = 0.78 ii. Type of Test: One-tailed Test
n = 41 𝐻" : 𝜇 < 0.78
iii. P-value = 0.18%
𝑥̅ = 0.68
𝜎 = 0.22 iv. Since p-value ≤ 𝛂
0.18% ≤ 10%
∝ = 10% = 0.10
Thus, reject Ho 19
LESSON 5: P-VALUE FOR Z-TEST

EXAMPLE: Find the p-value and decide whether to reject or not to

reject the Ho
19−20
i. z= 5 = −1.34
!
45
4. Given: 𝜇0 = 20
𝐻!: 𝜇 = 20 ii. Type of Test: Two-tailed Test
n = 45 𝐻" : 𝜇≠20
iii. P-value = 18.02%
𝑥̅ = 19
𝜎=5 iv. Since p-value ≰ 𝛂
18.02% ≰ 5%
∝ = 5% = 0.05
Thus, do not reject Ho 20
21
LESSON 6: P-VALUE FOR T-TEST

¡ To find the p-value for the t-test use MS Excel.

Ø One-tailed Test:
Syntax: = 1-T.DIST(/t/,df,TRUE)

Ø Two-tailed Test:
Syntax: = T.Dist.2T(/t/,df)
22
LESSON 6: P-VALUE FOR T-TEST

EXAMPLE: Find the p-value and decide whether to reject or not to

880−875
reject the Ho i. t = 10 = 2.50
!
25
1. Given: 𝜇0 = 875
ii. Type of Test: One-tailed Test
n = 25 𝐻!: 𝜇 = 875
𝑥̅ = 880 𝐻" : 𝜇 > 875 iii. Df = n-1 = 25-1 = 24

s = 10 iv. P-value = 0.98%

∝ = 1% v. Since p-value ≤ 𝛂
0.98% ≤ 1%
23

Thus, reject Ho
LESSON 6: P-VALUE FOR T-TEST

EXAMPLE: Find the p-value and decide whether to reject or not to

74−78
reject the Ho i. t = 14 = −1.28
!
20
2. Given: 𝜇0 = 78
ii. Type of Test: One-tailed Test
n = 20 𝐻!: 𝜇 = 78
𝑥̅ = 74 𝐻" : 𝜇 < 78 iii. Df = n-1 = 20-1 = 19

s = 14 iv. P-value = 10.80%

∝ = 10% v. Since p-value ≰ 𝛂

10.80% ≰ 10%
24

Thus, do not reject Ho

LESSON 6: P-VALUE FOR T-TEST

EXAMPLE: Find the p-value and decide whether to reject or not to

332−314
reject the Ho i. t = 46 = 2.11
!
29
3. Given: 𝜇0 = 314
ii. Type of Test: Two-tailed Test
n = 29 𝐻!: 𝜇 = 314
𝐻" : 𝜇 ≠ 314 iii. Df = n-1 = 29-1 = 28
𝑥̅ = 332
s = 46 iv. P-value = 4.39%

∝ = 5% v. Since p-value ≤ 𝛂
4.39% ≤ 5%
25

Thus, reject Ho
26
 Ho: Mathematical Sentence Form:
Form:
Newly graduate students receive an average salary
𝜇 = 1𝑀 of 1M pesos per year.
WORD PROBLEMS

According to Commission on Ha: Mathematical Sentence Form:

Higher Education (CHED), Form:
Newly graduate students receives an average salary
newly graduate students receive 𝜇 > 1𝑀 of more than 1M pesos per year.
an average salary of 1M a year
with a standard deviation of 120,
000. The dean of graduate
studies at a large state university ∝ Type of Test Given Test Statistic
claims that his graduate students 5% One-tailed Test 1M
𝝁𝟎 = _______
Computation
earn more than this. He surveys df (if applicable) P-value
42 randomly selected graduate B = 1,064,000
𝒙 ________
n/a 0.03% 120,000 1M − 1.064M
students and finds their average 𝝈 = ________ z=
120,000
salary is 1,064,000 pesos With α = *
Since 0.03% ≤ 5% 𝒔 = ________ 42
5%, is the dean’s claim correct? Conclusion Thus, Reject Ho.
42
𝒏 = ________ z = 3.46
-Principal’s claim is true.

27
 Ho: Mathematical Sentence Form:
Form:
The average time to find a parking space on campus
𝜇 ≥ 30 𝑚𝑖𝑛. is at least 30 minutes.
WORD PROBLEMS
Ha: Mathematical Sentence Form:
Trying to encourage people to stop Form:
The average time to find a parking space on campus
driving to campus, the university 𝜇 < 30 𝑚𝑖𝑛. is less than 30 minutes.
claims that on average it takes at least
30 minutes to find a parking space on
campus. “I don’t think it takes so long Type of Test
∝ Given Test Statistic
to find a spot. In fact I have a sample
of the last five times I drove to 10% One-tailed Test 30
𝝁𝟎 = _______ Computation
df (if applicable) P-value
campus, and I calculated that the 20
B = ________
𝒙
mean is 20 minutes with a s = 6 n-1 = 5-1 = 4 1.01%
minutes.” Perform a hypothesis
𝝈 = ________ t = -3.73
6
𝒔 = ________
testing with α = 1 % to see if the claim Conclusion Since 1.01% ≮ 1%
is correct. Thus, Reject Ho. 5
𝒏 = ________
-Driver’s claim is true.

28
 Ho: Mathematical Sentence Form:
Form:
The average teacups sold per day is 500.
𝜇 = 500 𝑡𝑒𝑎𝑐𝑢𝑝𝑠
WORD PROBLEMS
A tea stall near a certain university is Ha: Mathematical Sentence Form:
making a sales of 500 teacups per Form:
day. Because of the development of The average teacups sold per day is more than 500.
𝜇 > 500.
MRT nearby , it expects to increase
its sales. During the first 12 days after
the start of the MRT, the daily sales
were recorded which are as under: ∝ Type of Test Given Test Statistic
550, 570, 490, 615, 505, 580, 570, 5% One-tailed Test 500
𝝁𝟎 = _______ Computation
df (if applicable) P-value 548
460, 600, 580, 530, 526 B = ________
𝒙
n-1 = 12-1 = 11 0.22%
On the basis of this sample 𝝈 = ________ t = 3.56
information, can one conclude that
Since 0.22% < 5% 𝒔 = 46.69
________
that the tea stall’s sales have Conclusion
increased? Use 5% level of Thus, reject Ho. 12
𝒏 = ________
significance.
-A tea stall is selling more than
500 teacups.
29
 Ho: Mathematical Sentence Form:
Form:
Monthly electricity consumption in the country is at
𝜇 ≥ 248 𝑘𝑤ℎ least 248 kwh.
WORD PROBLEMS
Ha: Mathematical Sentence Form:
Form:
It was reported that the mean Monthly electricity consumption in the country is less
household electricity consumption 𝜇 < 248 𝑘𝑤ℎ than 248 kwh.
in the country is at least 248 kwh
per month with a standard deviation
of 32 kwh. A random sample of 76
households has a mean electricity ∝ Type of Test Given Test Statistic
consumption of 238 kwh pe month. 248 Computation
10% One-tailed Test 𝝁𝟎 = _______
At 10% alpha, is there enough df (if applicable) P-value
evidence to reject the claim that the 𝒙 238
B = ________
mean household electricity n/a 0.33% 32
𝝈 = ________
consumption is at least 248 kwh per z = -2.72
month? Conclusion Since 0.33% ≤ 10% 𝒔 = ________
Thus, Reject Ho. 76
𝒏 = ________

-the claim is true.

 Ho: Mathematical Sentence Form:
Form:
There is no significant change in the academic
𝜇 = 81 performance of athletes.
WORD PROBLEMS
Ha: Mathematical Sentence Form:
The high school athletic director is Form:
asked if basketball players are doing There is a significant increase in the academic
as well academically as the other 𝜇 > 81 performance of athletes.
student athletes. We know from a
previous study that the average GPA
for the student athletes is 81. After ∝ Type of Test Given Test Statistic
an initiative to help improve the GPA
of student athletes, the athletic 5% One-tailed Test 81
𝝁𝟎 = _______ Computation
director randomly samples 20 df (if applicable) P-value 84
B = ________
𝒙
basketball players and finds that the n-1 = 20-1 = 19 3.50%
average GPA of the sample is 84 𝝈 = ________ t = 1.92
with a sample standard deviation of 7
𝒔 = ________
Conclusion Since 3.50% < 5%
7. Is there a significant change in
Thus, reject Ho. 20
𝒏 = ________
GPA? Use a 0.05 significance level.
-The initiative to help improve
the GPA athletes is effective.