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Lecture 6: Hypothesis Testing About Population Proportion: S. Nakale University of Namibia

This document provides information about hypothesis testing for population proportions. It discusses using both the critical value approach and p-value approach to test hypotheses about population proportions. It provides examples of performing hypothesis tests on population proportions using both approaches and interpreting the results. It also provides exercises for students to practice conducting and interpreting hypothesis tests on population proportion data.

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Panduh Shvely Amukambo
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26 views8 pages

Lecture 6: Hypothesis Testing About Population Proportion: S. Nakale University of Namibia

This document provides information about hypothesis testing for population proportions. It discusses using both the critical value approach and p-value approach to test hypotheses about population proportions. It provides examples of performing hypothesis tests on population proportions using both approaches and interpreting the results. It also provides exercises for students to practice conducting and interpreting hypothesis tests on population proportion data.

Uploaded by

Panduh Shvely Amukambo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Lecture 6: Hypothesis Testing about

population proportion

S. Nakale
University of Namibia
(School of Accounting)

Summer Term 2021


Learning outcome
At the end of this lecture, you must be able to:

 Perform hypothesis tests for population proportion.


 Interpret the results of a hypothesis test and translate them
into practical conclusions to guide decision making.

Summer Term 2021


Hypothesis Testing about Population Proportion
Critical value approach
𝑝−𝑝0
• Test statistic: 𝑧 = has a standard normal probability
𝑝0 (1−𝑝0 )
𝑛
distribution.
• For a lower tail test: the standard normal probability distribution table
can be used to find the critical value −𝑧𝛼 , a z –value with an area of 𝛼
in the lower tail.
• For an upper tail test: the standard normal probability distribution
table can be used to find the critical value 𝑧𝛼 , a z –value with an area
of 𝛼 in the upper tail.
• For a two tailed test: the standard normal probability distribution table
can be used to find the critical values −𝑧𝛼/2 𝑎𝑛𝑑𝑧𝛼/2 , z –values with an
area of 𝛼/2 in the lower tail and upper tail, respectively.
• Rejection rule:
Lower tail: Reject 𝐻0 𝑖𝑓 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ − 𝑧𝛼

Upper tail: Reject 𝐻0 𝑖𝑓 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥ 𝑧𝛼

Two-tailed: Reject 𝐻0 𝑖𝑓 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≤ − 𝑧𝛼/2 or 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 ≥ 𝑧𝛼/2

Summer Term 2021


Hypothesis Testing about Population Proportion
p-value approach
𝑝−𝑝0
• Test statistic: 𝑧 = has a standard normal probability
𝑝0 (1−𝑝0 )
𝑛
distribution.
• For a lower tail test: 𝑝 − 𝑣𝑎𝑙𝑢𝑒 = 𝑃(𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 < 𝑧)
• For an upper tail test: 𝑝 − 𝑣𝑎𝑙𝑢𝑒 = 𝑃(𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 > 𝑧)
• For a two tailed test: 𝑝 − 𝑣𝑎𝑙𝑢𝑒 = 2(𝑃 𝑧 𝑡𝑒𝑠𝑡 𝑠𝑡𝑎𝑡𝑖𝑠𝑡𝑖𝑐 > 𝑧 )

• Rejection rule:
Lower tail: Reject 𝐻0 𝑖𝑓 𝑝 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼

Upper tail: Reject 𝐻0 𝑖𝑓 𝑝 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼

Two-tailed: Reject 𝐻0 𝑖𝑓 𝑝 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼

Summer Term 2021


Exercise 19
A local mobile phone service provider, XYZ Mobile, claims that it has at
least 25% of the mobile phone market. A competitor conducted a
survey recently and argues that XYZ Mobile is overestimating their
market share.

A random sample of 200 mobile users is selected and it if found that 48


users subscribe to XYZ Mobile as a service provider.

Required:

a) What can be concluded about XYZ Mobile’s share of the mobile


phone market? Conduct the hypothesis test at a 2.5% level of
significance and use the critical value approach.
b) Repeat the hypothesis in a) using the p-value approach.

Summer Term 2021


Exercise 20 (Past Exam)

Students who bought iPod devices complained about having received


defective iPods. The industry standard for such devices has been two
percent defective devices, at most. In a sample of 120 units sold, 6 units
were defective.

Required:

a) At 95% confidence, use the p-value approach to test if the


percentage of defective systems produced by X-Game has
exceeded the industry standard.
b) Repeat the hypothesis in a) using the critical value approach.

Summer Term 2021


Exercise 21
(Adopted from: Steyn et al. (1999). Modern statistics in practice.)

An advertising company claims that the television commercial they


have created to inform the public about a three-point plan for
preventing AIDS is so effective that 75% of the viewers who have seen
the commercial still remember the three points after 24 hour. To test the
company’s claim, a random sample of 300 persons is selected, of
whom 236 can remember the three point plan after 24 hours.

Required:

a) Does this claim substantiate with the advertising company’s claim? Test
the hypothesis at a 5% level of significance, using the p-value
approach.
b) Repeat the hypothesis in a) using the critical value approach.

Summer Term 2021


Reference
 Anderson D.R, Sweeney D.J and Williams T.A, 2011.
Statistics for Business and Economics, eleventh edition.

 Wegner T, 2016. Applied Business Statistics: Methods


and Excel-Based Applications, fourth edition.

Summer Term 2021

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