Module 10

Hypothesis Testing and

Statistical Tools

Objectives:

At the end of the lesson the students are expected to:

1. formulate a null and alternative hypothesis;

2. identify the steps in testing the hypothesis;
3. identify the test of statistics to be used in testing the significance of difference between
means;
4. perform simple test of hypothesis using z or t-test; and
5. interpret the results and make an accurate decision in dealing with the formulated
hypothesis.
HYPOTHESIS

A wise or intelligent guess that is formulated and temporarily adopted to explain the
observed facts covered by a study. The hypothesis can also be described as the researcher’s
tentative inference on what he believes the outcome would be.

Types of Hypothesis

1. Null Hypothesis (𝐻0 )

It is the hypothesis that negates the significant difference, effect or relationship
between variables.
2. Alternative Hypothesis (𝐻𝑎 𝑜𝑟 𝐻1 )
It is the hypothesis that is the opposite of the null hypothesis. It states that there is a
significant difference, effect or relationship between variables.

Types of Test

1. One-tailed test or Directional Test

a. The alternative hypothesis is one-sided
b. Test whether the test statistic falls in critical region on only one side of the
distribution
2. Two-tailed test or Non-Directional Test
a. The alternative hypothesis is formulated to test for difference in either
direction
b. Test statistics is tested for occurrence in either of the two critical regions on
the extremes of the distribution

Types of Error

1. Type I Error (Alpha Error: 𝛼)

This occurs when the null hypothesis is rejected when it is true.
2. Type II Error (Beta Error: 𝛽)
This occurs when the null hypothesis is accepted when it is false.

Significance Level

• This is the probability that the value of the variable falling in the critical level
Level of Significance
Types of Test
0.05 0.01
One-tailed 1.645 or -1.645 2.326 or -2.326
Two-tailed 1.96 and -1.96 2.576 and -2.576

Critical Level

• The set of values chosen before the experiment to define the conditions under which
the null hypothesis will be rejected.

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Test Statistics

• z-test (𝑛 ≥ 30)
• t-test (𝑛 < 30)
• F-test (for multiple comparison)
• Chi-square (nominal type)
• Pearson r and Spearman rho (test of relationship)

Steps in Hypothesis Testing

a. Formulate hypotheses.
b. Choose the level of significance (usually given).
c. Determine the type of test and tabular of critical value.
d. Select and apply the test statistic.
e. Compare the computed value of the statistic to the critical or tabular value obtained
for the chosen 𝛼.
(Note: If the absolute value of the computed value is LESS THAN the absolute value
of the tabular value, then accept the null hypothesis. If the absolute value of the
computed value is greater than or equal to the absolute value of the tabular value,
reject the null hypothesis)
f. Conclude and interpret your findings.

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Spearman rho (𝝆) Rank Correlation

Recall that the Spearman rho (𝜌) is used in determining the correlation coefficient. This
is used to find out if there is a significant relationship between two variables of ordinal type. The
formula of Spearman rho is as follows:

6 ∑ 𝐷2
𝜌=1−
𝑛(𝑛2 − 1)

where: D is the difference between ranks

Example:

Let’s test a hypothesis, using the previous given example in determining the relationship
between the capital and profit of cinnamon rolls of a certain store at 0.05 level of
significance using Spearman rho.

Capital (X) Profit (Y)

20,000 5,000
50,000 15,000
10,000 3,000
100,000 30,000
18,000 4,000
25,000 9,000
11,000 6,000
150,000 70,000
5,000 3,000
40,000 15,000

Solution:

a. 𝐻0 = There is no significant relationship between the capital and profit of cinnamon

rolls.
𝐻𝑎 = There is a significant relationship between the capital and profit of cinnamon rolls.
b. 𝛼 = 0.05
c. Two-tailed, df = n = 10, 𝑡𝑣 = 0.648

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 d.

Capital (X) Profit (Y) 𝑅𝑥 𝑅𝑦 D 𝐷2

20,000 5,000 6 7 -1 1
50,000 15,000 3 3.5 -0.5 0.25
10,000 3,000 9 9.5 -0.5 0.25
100,000 30,000 2 2 0 0
18,000 4,000 7 8 -1 1
25,000 9,000 5 5 0 0
11,000 6,000 8 6 2 4
150,000 70,000 1 1 0 0
5,000 3,000 10 9.5 0.5 0.25
40,000 15,000 4 3.5 0.5 0.25
7

The R signifies the ranking of X and Y.

6(7)
𝜌=1−
10(102 − 1)

42
𝜌=1−
10(100 − 1)

42
𝜌=1−
990

𝜌 = 0.958

e. Since |0.958|>|0.648|, reject the 𝐻0 .

f. There is a significant relationship between capital and profit of cinnamon rolls.

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Name: ____________________________________________ Date: ____________________

Section: ___________ Professor: ___________________________ Score: _____________

Activity 1

1. Using Spearman rho, determine the relationship between weight and height of puppies
who were breastfed by their mother at 0.05 level of significance.

Puppy Weight(X) Height(Y)

1 27 0.70
2 25 0.64
3 28 0.77
4 23 0.62
5 21 0.60
6 20 0.62
7 29 0.77
8 24 0.64

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TEST OF SIGNIFICANT DIFFERENCE BETWEEN MEANS

z-test

It is any statistical test for which the distribution of the test statistic on the null hypothesis
can be accurately measured by a normal distribution.

• One Sample Mean

The formula for the z-test having one sample mean is as follows:
(𝑥̅ − 𝜇)√𝑛
𝑧=
𝜎
where:
𝑥̅ = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑚𝑒𝑎𝑛
𝜇 = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑎𝑛
𝑛 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑠𝑖𝑧𝑒
𝜎 = 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛

Example:

Full-time employees receive an average salary of P12,800. The manager believes

that the employees earn more than this. The manager surveys 46 randomly selected
employees and finds that their average salary is P13,445 with a standard deviation
of P1800. Use alpha = 0.05
Given:
𝑥̅ = 13445
𝜇 = 12800
𝑛 = 46
𝜎 = 1800
Solution:
a. 𝐻0 = The average salary of the employees is less than P12,800.
𝐻𝑎 = The average salary of the employees is more than P12,800.
b. 𝛼 = 0.05
c. Two-tailed, 𝑡𝑣 = 1.96
d. z-test, one sample mean

(13445 − 12800)√46
𝑧=
1800

645(√46)
𝑧=
1800

𝑧 = 2.43 (computed value)

e. |2.43| > | ± 1.96|, then reject the 𝐻0

f. The average salary of the employees is more than P12,800.

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Name: _________________________________________ Date: _________________

Section: ___________ Professor: _____________________ Score: _____________

Activity 2

1. A marketing company declared that secretaries file contracts at an average of 524

petitions per year. 37 messengers were randomly selected and the mean number of
the petitions they filed per year was 534.8 with a standard deviation of 45.9. Do the
messengers file more petitions per year than secretaries? Test with alpha = 0.01

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t-test

• Two Sample Mean

Given the population standard deviation:

𝑥̅1 − 𝑥̅2
𝑧=
1 1
𝜎√ −
𝑛1 𝑛2

Where:

𝑥̅1 = 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑡ℎ𝑒 𝑓𝑖𝑟𝑠𝑡 𝑠𝑎𝑚𝑝𝑙𝑒

𝑥̅2 = 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑡ℎ𝑒 𝑠𝑒𝑐𝑜𝑛𝑑 𝑠𝑎𝑚𝑝𝑙𝑒
𝜎 = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛
𝑛1 = 𝑠𝑖𝑧𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑓𝑖𝑟𝑠𝑡 𝑠𝑎𝑚𝑝𝑙𝑒
𝑛2 = 𝑠𝑖𝑧𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑠𝑒𝑐𝑜𝑛𝑑 𝑠𝑎𝑚𝑝𝑙𝑒

Given the sample standard deviation:

𝑥̅1 − 𝑥̅2
𝑧=
𝑠 2 𝑠 2
√ 1 − 2
𝑛1 𝑛2

where:

𝑥̅1 = 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑡ℎ𝑒 𝑓𝑖𝑟𝑠𝑡 𝑠𝑎𝑚𝑝𝑙𝑒

𝑥̅2 = 𝑚𝑒𝑎𝑛 𝑜𝑓 𝑡ℎ𝑒 𝑠𝑒𝑐𝑜𝑛𝑑 𝑠𝑎𝑚𝑝𝑙𝑒
𝑠1 = 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑡ℎ𝑒 𝑓𝑖𝑟𝑠𝑡 𝑠𝑎𝑚𝑝𝑙𝑒
𝑠2 = 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑡ℎ𝑒 𝑠𝑒𝑐𝑜𝑛𝑑 𝑠𝑎𝑚𝑝𝑙𝑒
𝑛1 = 𝑠𝑖𝑧𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑓𝑖𝑟𝑠𝑡 𝑠𝑎𝑚𝑝𝑙𝑒
𝑛2 = 𝑠𝑖𝑧𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑠𝑒𝑐𝑜𝑛𝑑 𝑠𝑎𝑚𝑝𝑙𝑒
Example:
A cheerleading coach wanted to know which method is better to use in teaching
business mathematics. He took a random sample of 40 students handled by only one
teacher and the mean of their grades is 83 with a standard deviation of 7. 50
students which are handled by two different teachers were randomly taken and it
was found that they have a mean grade of 87 with a standard deviation of 10. Does
this indicate that a two-teacher setup is better than one-teacher setup? Test at 𝛼 =
0.01

Solution:

a. 𝐻0 = There is no significant difference between a two-teacher and a one-teacher

setup in teaching business mathematics.
𝐻𝑎 = There is a significant difference between a two-teacher and a one-teacher
setup in teaching business mathematics.

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 b. 𝛼 = 0.01
c. One-tailed, 𝑡𝑣 = 2.33
d. t-test, two sample mean given sample standard deviation

87 − 83
𝑧=
2 2
√10 − 7
50 40

4
𝑧=
√0.775

𝑧 = 4.54

e. |4.54| > | ± 2.33|, then reject the 𝐻0

f. There is a significant difference between a two-teacher and a one-teacher setup
in teaching business mathematics.

Name: _________________________________________ Date: _________________

Section: ___________ Professor: _____________________ Score: _____________

Activity 3

1. The principal wants to find out if there is a significant difference between the
weekly allowances of morning and afternoon shift of students in his school. He
took a sample of 100 students in the morning and 120 students in the afternoon.
He found out that the mean weekly allowance of 148 and 145 respectively. The
total population of his school has a standard deviation of 40. Test at 0.05 level of
significance.

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ANALYSIS OF VARIANCE (ANOVA)

F-test

An F-test is used to compare two variances 𝑠12 and 𝑠22 by dividing them. Variances are
always positive. The formula for comparing the two variances in an F-test is:

𝑠12
𝐹=
𝑠22

Things to consider before calculating:

• The larger variance should always go in the numerator

• If it is a two-tailed test, divide the alpha by 2 before looking for the critical value
• If the given is standard deviation, square them to get the variances
• If the degrees of freedom is not listed in the F-table, use the larger critical value. (See
F-table in Appendix 1)
• The degrees of freedom is the sample size -1

Steps in calculating the F-test:

Step 1 (if you are given the standard deviation): Square both standard deviations to get the
variances.

Step 2: Take the largest variance and divide it by the smaller variance to get the F-value.

Step 3: Find the degrees of freedom.

Step 4: Look for the F-value you calculated in the F-table (Appendix 2)

Step 5: Compare the calculated value with the F-value in Step 4. If the F-value is smaller
than the calculated value, then we reject the null hypothesis.

Example:

A gaming company offers premium account and pay-per-view subscription for those
subscribed in a certain gamer. The CEO of the company wonders if the premium
account and pay-per-view subscription are more variable when compared to one
another. He finds the following data:

Premium Pay-per-view
Variance P200 P50
Sample size 11 51

Conduct a two-tailed F-test with a 0.10 significance value

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Solution:

a. 𝐻0 = Premium is not variable to Pay-per-view

𝐻𝛼 = Premium is variable to Pay-per-view
0.10
b. 𝛼 = = 0.05
2
c. Two-tailed; 𝑑𝑓1 = 11 − 1 = 10; 𝑑𝑓2 = 51 − 1 = 50
d. F-test, analysis of variance

200
𝐹 − 𝑣𝑎𝑙𝑢𝑒 = =4
50
𝐹 − 𝑣𝑎𝑙𝑢𝑒 𝑓𝑟𝑜𝑚 𝐹 − 𝑡𝑎𝑏𝑙𝑒 = 2.026

e. Since 4 > 2.026, then we reject the null hypothesis

f. The premium account is variable to pay-per-view subscribers.

Name: _________________________________________ Date: _________________

Section: ___________ Professor: _____________________ Score: _____________

Activity 4

A bank has their Main Branch in Manila and a branch in Cebu City. The main branch
accommodates customers at a longer time, compared to their branch. The CEO of the bank
wonders if the customers at one branch are more variable than the number of customers at
another branch.

The variance of Manila branch customers is 31, and on Cebu City the variance is 20. The
sample size for the Manila and Cebu City branch is 11 and 21 respectively. Solve the
following using two tailed F-test with a level of significance of 10%

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Name: ______________________________________________ Date: __________________

Section: ______________ Professor: ________________________ Score: _____________

Activity 5

Solve for the following.

A. z-test

In a certain university, the average attendance of audience in basketball games has been
2,925. Due to the pandemic, the attendance for the first 8 games has averaged only 2,715
with a standard deviation of 685. The athletic director claims that the number of attendees
is the same as the previous year. What is the test value needed to evaluate the claim?

B. t-test

In a certain barangay, the mean household water usage in a month is claimed to be 45 cubic
meters. The following year, a countrywide water conservation campaign was conducted. 50
randomly selected homes were chosen and their mean consumption is 47 cubic meters with
a standard deviation of 2.5 cubic meters. Is there enough evidence to accept the claim? Test
at 0.01 level of significance

C. F-test

The variability in the amount of impurities present in a batch of chemicals used for a
particular process depends on the length of time that the process is in operation.

Suppose a sample of size 25 is drawn from the normal process which is to be compared to a
sample of a new process that has been developed to reduce the variability of impurities.

Sample 1 Sample 2

n 25 25

s2 1.04 0.51

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REFERENCES

Sirug, W. S. (2018), Elementary Statistics

Blay, B. E. (2013), Elementary Statistics

https://www.MathTutorDVD.com

https://www.excel-easy.com

http://statisticslectures.com/tables/ftable/

https://www.wallstreetmojo.com/f-test-formula/

https://sites.psu.edu/stat200psbsp2013/2013/03/19/one-sample-z-test-problems-
with-solutions/

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