HAND-OUT FOR ADVANCED STATISTICS

Sept. 14, 2024 (Mrs. A. L. Reginaldo)

STATISTICAL INFERENCE
The theory of statistical inference consists of methods by which one makes inferences
or generalizations about a population. Generally, there are two major areas of statistical
inference. These are the estimation of parameters and the tests of hypothesis.

POINT ESTIMATE AND INTERVAL ESTIMATE

Often, we need to estimate the characteristics of a population on the basis of
information about a sample. The estimation of population values from sample data by
investigators of all kinds is a common occurrence in contemporary society. Common sense
suggests that to estimate values of a population, random sampling may be employed.
Methods of estimation are sometimes said to yield unbiased, consistent, efficient and
sufficient estimates. These are the desirable characteristics for estimates and serve as the
criteria in choosing one method of estimation over another.
A method of estimation provides an unbiased estimate when the mean of a large
number of sample values, obtained by repeated sampling, approaches the population value in
the limit as the number of samples increases. It means that a statistic is unbiased when it
displays no systematic tendency to be either greater than or less than the population
parameter. In other words, it is not subject to constant error.
A method of estimation is said to yield a consistent estimate if the estimate approaches
the population parameter more closely as the sample size increases. The arithmetic mean is
a consistent estimate in that it tends to draw closer to the population parameter with an
increase in sample size.
A point estimate is a statistic taken from a sample and is used to estimate a
population parameter. However, it is only as good as the representativeness of the
population.

WHAT IS A HYPOTHESIS?
A hypothesis is a statement or tentative theory which aims to explain facts about the
real world. Most hypothesis have their origin in a question to some practical problem. In
search for an answer, an “educated guess” and pertinent evidences are brought out which
later on are turned into propositions or “hypotheses”.
These hypotheses are then subjected to testing. If they are found to be statistically
true, they are accepted; if they are found to be false, they are rejected.
The hypothesis that we hope to reject or accept is called the null hypothesis and is
denoted by H0. Being the starting point of the testing process, it serves as our working
hypothesis. A null hypothesis must always express the idea of nonsignificance of difference.
The rejection of H0 implies our acceptance of an alternative hypothesis, which we
denote as Ha. The alternative hypothesis generally represents the hypothetical statement that
the researcher wants to prove. To summarize:
- Rejection of H0 implies acceptance of Ha
- Acceptance of H0 implies rejection of Ha

TYPE I AND TYPE II ERRORS

When making a decision about a proposed hypothesis based on sample data, we run
the risk of making an error.
Type I error ( or α error) – when we reject the null hypothesis when in fact the null
hypothesis or H0 is true and therefore the alternative hypothesis or H a is false.
Type II error (or β error) – when we accept the null hypothesis when in fact the null
hypothesis is false and therefore the alternative hypothesis is true.
On the other hand, if we reject the null hypothesis and it turns out that it is really false
and therefore the alternative hypothesis is true, we make the correct decision. If we accept
the null hypothesis and it turns out that the null hypothesis is really true and the alternative
hypothesis is false, we also make the correct decision.

LEVEL OF SIGNIFICANCE
The probability of making a type I or alpha error in a test is called the significance
level of a test. The significance level of a test is the maximum value of the probability of
rejecting the null hypothesis when in fact it is true. For tests involving statistical decision, it is
customary to use a level of significance of 5% or 1%. A 5% significance level means that we
can accept about 5 chances in 100 that we would reject the null hypothesis when it should be
accepted. A 5% significance level implies that we are 95% sure or confident of making the
right decision.

ONE-TAILED AND TWO-TAILED TESTS

When the rejection region is located at only one extreme of the range of values for the
test statistics, the test is one-tailed.
If the null hypothesis is a statement of non-equality, the hypothesis is non-directional
and we have a two-tailed test.

STEPS IN HYPOTHESIS TESTING

1. Formulate the null hypothesis that there is no significant difference between the
items being compared. State the alternative hypothesis which is used in case the
null hypothesis is rejected.

2. Set the level of significance.

3. Determine the test to be used. Use the z-test if population standard deviation is
given and the t-test if the standard deviation is given from the samples.

4. Determine the tabular value for the test. For a z-test, use the table of critical values
of z based on the area of the normal curve. For a t-test, one must first compute for
the degrees of freedom, then look for the tabular value from the table of t-
distribution. For a single sample, df = n – 1. For two samples, df = n1 + n2 – 2

5. Compute for the z or t value as needed:

6. Compare the computed value with its corresponding tabular value, then state your
conclusion based on the following guidelines:
a. Reject the null hypothesis if the absolute computed value is equal to or
greater than the absolute tabular value.
b. Accept the null hypothesis if the absolute computed value is less than the
absolute tabular value.

SAMPLE PROBLEMS:

1. Data from a school census showed that the mean weight of college students was 45
kilos, with a standard deviation of 3 kilos. A sample of 100 college students were found
to have a mean weight of 47 kilos. Are the 100 college students really heavier than the
rest using 0.05 level of significance?

2. A researcher wishes to find out whether or not there is significant difference between
the monthly allowances of morning and afternoon students in his school. By random
sampling, he took a sample of 239 students in the morning session. These students
were found to have a mean monthly allowance of P142.00 The researcher also took a
sample of 209 students in the afternoon session. They were found to have a mean
monthly allowance of P148.00 The total population of that school has a standard
 deviation of P40.00. Is there a significant difference between the two samples at 0.01
level of significance?

3. A sample survey of a television program in Metro Manila shows that 80 of 200 men
dislike the same program. We want to decide whether the difference between the two
sample proportions, 80/200 = 0.40 and 75/250 = 0.30, is significant or not at 0.05 level
of significance?

4. A researcher knows that the average height of Filipino women is 1.525 meters. A
random sample of 26 women was taken and was found to have a mean height of 1.56
meters, with standard deviation of 0.10 meters. Is there reason to believe that the 26
women are significantly taller than the others at 0.05 level of significance?

5. A teacher wishes to test whether or not the Case Method of teaching is more effective
than the Traditional Method. She picks two classes of approximately equal intelligence
(verified through an administered IQ test). She gathers a sample of 18 students to
whom she uses the Case Method and another sample of 14 students to whom she uses
the Traditional Method. After the experiment, an objective test revealed that the first
sample got a mean score of 28.6 with a standard deviation of 5.9 while the second
group got a mean score of 21.7 with a standard deviation of 4.6 Based on the result,
can we say that the Case Method is more effective than the Traditional Method?

EXERCISE/ACTIVITY:

1. Beta Company is manufacturing steel wire with an average tensile and strength of 50
kilos. The laboratory tests 16 pieces and finds that the mean is 47 kilos and the
standard deviation is 15 kilos. Are the results in accordance with the hypothesis that
the population mean is 50 kilos?
2. Two types of rice varieties are being considered for yield and a comparison is needed.
Thirty hectares were planted with the rice varieties exposed to fairly uniform growing
conditions. The results are obtained as follows:
Variety A Variety B
Average Yield 80 sacks/hectare 35
sacks/hectare
Sample variance 5.9 12.1
At 0.05 significance level, can we conclude that variety A is the better type?
3. Two methods of teaching statistics are being tried by a professor. A class of 40
students is taught by Method A and a class of 36 is taught by Method B. The two
classes are given the same final examination. The scores are: mean of class for Method
A 78 while the mean of the class for Method B is 74. Using a 0.01 significance level, can
we conclude that the average final examination grade/scores produced by the two
methods are different if the population standard deviation is 5?