Testing of Hypothesis

2 Content
 Concepts of hypothesis testing
 Inference about a population mean when the population
standard deviation is known and unknown
 Inference about a population proportion
 Inference about a population variance
 One-way analysis of variance
 Chi-squared test
 F-test
 3 Statistical Hypothesis

 A Statistical hypothesis is an assertion or claim about a population

parameter. This claim may or may not be true.
4 Test of Hypothesis

 A test of a hypothesis H is a rule or procedure to determine

whether to accept or reject H.

 A test is usually described in terms of some statistic T = T(X1,

X2, …, Xn ) which reduces the experimental data.

 A statistical test uses the data obtained from a sample to

make a decision.
5 Null and Alternative Hypotheses

 All statistical hypotheses consist of two parts

 A null hypothesis
 An alternative hypothesis.

These two parts are constructed to contain all possible outcomes

of the experiment or study.
Generally, the null hypothesis states that the “null” condition
exists; that is, there is nothing new happening, the old theory is still
true, the old standard is correct, and the system is in control. The
alternative hypothesis, on the other hand, states that the new
theory is true, there are new standards, the system is out of
control, and/or something is happening.
6 Null Hypothesis

 The hypothesis to be tested is called the null hypothesis.

 It states that there is no difference between a parameter and a
specific value or that there is no difference between two
parameters.
 In reality, the null hypothesis may or may not be true. A
decision is made to accept or reject it on the basis of the data
obtained from a sample.
 It is denoted by H0.
 Alternative Hypothesis
7

 An alternative hypothesis is made against a null hypothesis.

 It states that there is a specific difference between a parameter
and a specific value or between two parameters.
 It is denoted by Ha.
 Example 1
8

• A new teaching method is developed that is believed to be

better than the current method.

• Null Hypothesis:
The new method is no better than the old method.

• Alternative Hypothesis:
The new teaching method is better.
 Example 2
9

• A new sales force bonus plan is developed in an attempt to

increase sales.

• Null Hypothesis:
The new bonus plan does not increase sales.

• Alternative Hypothesis:
The new bonus plan increase sales.
 Example 3
10

• A new drug is developed with the goal of lowering blood

pressure more than the existing drug.

• Null Hypothesis:
The new drug does not lower blood pressure more than the
existing drug.

• Alternative Hypothesis:
The new drug lowers blood pressure more than the existing drug.
11 Simple and Composite Hypotheses

 If a hypothesis completely specifies the distribution,

then it is called simple, otherwise it is known as
composite.

 Example: Let X1, X2, …, Xn be a random sample from a

N(, 4) population.
 Simple hypothesis
H: =15
 Composite hypothesis
H: 15
12 Example
Suppose a company has held an 18% share of the market.
However, because of an increased marketing effort, company
officials believe the company’s market share is now greater than
18%, and the officials would like to prove it. The null hypothesis is
that the market share is still 18% or perhaps it has even dropped
below 18%. Converting the 18% to a proportion and using p to
represent the population proportion, results in the following null
hypothesis:
H0 : p≤0.18.

So, the alternative hypothesis is

Ha : p>0.18

Note: The null hypothesis states that the old market share of 18%
is still true.
13 One-tailed and Two-tailed Test

 We test a null hypothesis against some alternative

hypothesis. If the deviation of the values of the parameter
suggested by the alternative hypothesis from those
suggested by the null hypothesis are only positive or
negative, then the test is called one-tailed test.

 When the deviations are both positive and negative then

the test is called two-tailed test.
 Summary of Forms for Null and Alternative
Hypotheses about a Population Mean
14

• The equality part of the hypotheses always appears in the null

hypothesis.
• In general, a hypothesis test about the value of a population
mean  must take one of the following three forms (where 0 is
the hypothesized value of the population mean).

≥ ≤ =
< > ≠

One-tailed One-tailed Two-tailed

(lower-tail) (upper-tail)
 Null and Alternative Hypotheses
15

 Example: Metro EMS

A major west coast city provides one of the most

comprehensive emergency medical services in the world.
Operating in a multiple hospital system with approximately
20 mobile medical units, the service goal is to respond to
medical emergencies with a mean time of 12 minutes or
less.
The director of medical services wants to formulate a
hypothesis test that could use a sample of emergency
response times to determine whether or not the service goal
of 12 minutes or less is being achieved.
 Null and Alternative Hypotheses
16

H0:  < 12 The emergency service is meeting the

response goal; no follow-up action is
necessary.
Ha:  > 12 The emergency service is not meeting the
response goal; appropriate follow-up action
is necessary.
where:  = mean response time for the population
of medical emergency requests
17 Type I Error
 Because hypothesis tests are based on sample
data, we must allow for the possibility of errors.

 An error of type I is committed when a business

researcher rejects a true null hypothesis.

 Let α = Prob (Type I error). Then α is called the

significance level of the test.
18 Type II Error

 En error of type II is committed when a business

researcher fails to reject a false null hypothesis.
 In other words, a false null hypothesis is
accepted.

 Let β = Prob (Type II error). Then (1 – β) is

called the power of a test ≡ probability of
avoiding a Type II error.
1– β = Pr(reject H0 | H0 false)
 Type I and Type II Errors
19

Population Condition

H0 True ( < 12) H0 False ( > 12)

Conclusion

Accept H0
Correct Decision Type II Error
(Conclude  < 12)

Reject H0 Correct Decision

Type I Error
(Conclude  > 12)
 Critical Region
20  The critical region is the region in which if the test statistic
value falls then the null hypothesis will be rejected. It
depends on the α value.
 For α = 0.05, the critical regions are shown for right-tailed,
left-tailed and two-tailed tests.
 Critical Value Approach to One-Tailed Hypothesis
Testing
21

• The test statistic z has a standard normal probability distribution.

• We can use the standard normal probability distribution table to

find the z-value with an area of a in the lower (or upper) tail of the
distribution.

• 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 H0 if z > za
 Critical Value Approach to Two-Tailed Hypothesis
Testing
22

• The critical values will occur in both the lower and upper tails of
the standard normal curve.

• 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.

 p-Value Approach to One-Tailed Hypothesis Testing

• 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.

• 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.

• Reject H0 if the p-value < a .

 p-Value Approach to Two-Tailed Hypothesis Testing
24

• 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.

• The rejection rule: Reject H0 if the p-value < a .

25

Inference about a population mean when

the population standard deviation is known
 Inference About a Population Mean:  Known
26 (Large sample test)

 The z-test is a statistical test for the mean of a population.

 It can be used when n  30, or when the population is
normally distributed and  is known.

 Frame null and alternative hypotheses:

X 
 Test statistic: z= ~ N (0,1)
/ n
 Calculate the z statistic value.
 Apply either critical value or p-value approach to come to
the decision.
 Example: Metro EMS (one tailed test)
27

The response times for a random sample of 40 medical

emergencies were tabulated. The sample mean is 13.25
minutes. The population standard deviation is believed to
be 3.2 minutes.

The EMS director wants to perform a hypothesis test, with a

0.05 level of significance, to determine whether the service
goal of 12 minutes or less is being achieved.
 Example: Metro EMS
28

• p -Value and Critical Value Approaches

1. Develop the hypotheses.

H0:  < 12
Ha:  > 12
2. Specify the level of significance a = 0.05.

3. Compute the value of the test statistic.

̅ .
⁄
= 2.47
. /
 Example: Metro EMS
29

• p –Value Approach

4. Compute the p –value.

For z = 2.47, cumulative probability = 0.9932.

p-value = 1 - 0.9932 = 0.0068

5. Determine whether to reject H0.

Because p-value = 0.0068 < a = 0.05, we reject H0.

There is sufficient statistical evidence

to infer that Metro EMS is not meeting
the response goal of 12 minutes.
 Example: Metro EMS
30

• Critical Value Approach

4. Determine the critical value and rejection rule.

For a = 0.05, z.05 = 1.645
Reject H0 if z > 1.645
5. Determine whether to reject H0.
Because 2.47 > 1.645, we reject H0.

There is sufficient statistical evidence

to infer that Metro EMS is not meeting
the response goal of 12 minutes.
 Example: Metro EMS
31

• p –Value Approach

Sampling
a = 0.05
Distribution of

p-value (p-Value < a,

so reject H0.)
=0.008

z
0 za = z=
1.645 2.47
 Example: Glow Toothpaste (two tailed test)
32

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.

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.
 Example: Glow Toothpaste
33
• p –Value and Critical Value Approaches

1. Determine the hypotheses.

=
≠

2. Specify the level of significance a = 0.03.

3. Compute the value of the test statistic.

̅ .
⁄ /
= 2.74
 Example: Glow Toothpaste
34

• p –Value Approach
4. Compute the p –value.
For z = 2.74, cumulative probability = 0.9969
p-value = 2(1 - 0.9969) = 0.0062

5. Determine whether to reject H0.

Because p-value = 0.0062 < a = 0.03, 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).
 Example: Glow Toothpaste
35

• p-Value Approach

1/2 1/2
p-value p-value
= 0.0031 = 0.0031

a/2 = a/2 =
0.015 0.015

z
z = -2.74 0 z = 2.74
-za/2 = -2.17 za/2 = 2.17
 Example: Glow Toothpaste
36

• Critical Value Approach

4. Determine the critical value and rejection rule.

For a/2 = 0.03/2 = .015, z.015 = 2.17
Reject H0 if z < -2.17 or z > 2.17

5. Determine whether to reject H0.

Because 2.74 > 2.17, 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).
 Example: Glow Toothpaste
37

• Critical Value Approach

Sampling
Distribution of
𝑥̅ − 𝜇
𝑧=
𝜎⁄ 𝑛

Reject H0 Reject H0
a/2 = 0.015 a/2 = 0.015
Do Not Reject H0
z
-2.17 0 2.17