An automobile manufacturer would like to know what proportion of its customers are

dissatisfied with the service received from their local dealer. The customer relations
department will survey a random sample of customers and compute a 95% confidence
interval for the proportion that are dissatisfied. From past studies, they believe that
this proportion will be about 0.25. Find the sample size needed if the error of the
confidence interval is to be no more than 0.02.
Hypothesis Testing
In statistics, a hypothesis is a claim
or statement about a property of a
population.

A hypothesis test (or test of

significance) is a standard
procedure for testing a claim about
a property of a population.
 Rare Event Rule for
Inferential Statistics

If, under a given assumption, the probability

of a particular observed event is exceptionally
small, we conclude that the assumption is
probably not correct.
Example: ProCare Industries, Ltd., once provided a
product called “Gender Choice,” which, according to
advertising claims, allowed couples to “increase your
chances of having a boy up to 85%, a girl up to 80%.”
Gender Choice was available in blue packages for couples
wanting a baby boy and (you guessed it) pink packages for
couples wanting a baby girl. Suppose we conduct an
experiment with 100 couples who want to have baby girls,
and they all follow the Gender Choice “easy-to-use in-home
system” described in the pink package. For the purpose of
testing the claim of an increased likelihood for girls, we will
assume that Gender Choice has no effect. Using common
sense and no formal statistical methods, what should we
conclude about the assumption of no effect from Gender
Choice if 100 couples using Gender Choice have 100 babies
consisting of
a) 52 girls?; b) 97 girls?
 Example: ProCare Industries, Ltd.: Part a)

a) We normally expect around 50 girls in 100 births. The result

of 52 girls is close to 50, so we should not conclude that the
Gender Choice product is effective. If the 100 couples used no
special method of gender selection, the result of 52 girls could
easily occur by chance. The assumption of no effect from Gender
Choice appears to be correct. There isn’t sufficient evidence to
say that Gender Choice is effective.
Example: ProCare Industries, Ltd.: Part b)

b) The result of 97 girls in 100 births is extremely

unlikely to occur by chance. We could explain the
occurrence of 97 girls in one of two ways: Either an
extremely rare event has occurred by chance, or
Gender Choice is effective. The extremely low
probability of getting 97 girls is strong evidence
against the assumption that Gender Choice has no
effect. It does appear to be effective.
 Key Concept
This section presents individual components of a hypothesis test, and
the following sections use those components in comprehensive
procedures.
The role of the following should be understood:
 null hypothesis
 alternative hypothesis
 test statistic
 critical region
 significance level
 critical value
 P-value
 Type I and II error
 Objectives
 Given a claim, identify the null hypothesis and the
alternative hypothesis, and express them both in
symbolic form.
 Given a claim and sample data, calculate the value
of the test statistic.
 Given a significance level, identify the critical
value(s).
 Given a value of the test statistic, identify the P-
value.
 State the conclusion of a hypothesis test in simple,
non-technical terms.
Example: Let’s again refer to the Gender Choice
product that was once distributed by ProCare
Industries. ProCare Industries claimed that couples
using the pink packages of Gender Choice would have
girls at a rate that is greater than 50% or 0.5. Let’s
again consider an experiment whereby 100 couples
use Gender Choice in an attempt to have a baby girl;
let’s assume that the 100 babies include exactly 52
girls, and let’s formalize some of the analysis.

Under normal circumstances the proportion of girls is

0.5, so a claim that Gender Choice is effective can be
expressed as p > 0.5.

Using a normal distribution as an approximation to the

binomial distribution, we find P(52 or more girls in 100
births) = 0.3821
Example: Let’s again refer to the Gender Choice product
that was once distributed by ProCare Industries. ProCare
Industries claimed that couples using the pink packages of
Gender Choice would have girls at a rate that is greater than
50% or 0.5. Let’s again consider an experiment whereby 100
couples
use Gender Choice in an attempt to have a baby girl; let’s
assume that the 100 babies include exactly 52 girls, and let’s
formalize some of the analysis.

Figure 8-1, following, shows that with a probability of 0.5, the

outcome of 52 girls in 100 births is not unusual.
We do not reject random chance as a reasonable explanation. We
conclude that the proportion of girls born to couples using Gender Choice is
not significantly greater than the number that we would expect by random
chance.
 Null Hypothesis:
H0
 The null hypothesis (denoted by H0) is
a statement that the value of a
population parameter (such as
proportion, mean, or standard
deviation) is equal to some claimed
value.
 We test the null hypothesis directly.

 Either reject H0 or fail to reject H0.

 Alternative Hypothesis:
H1
 The alternative hypothesis (denoted
by H1 or Ha or HA) is the statement that
the parameter has a value that
somehow differs from the null
hypothesis.
 The symbolic form of the alternative
hypothesis must use one of these
symbols: , <, >.
Example: Identify the Null and Alternative
Hypothesis. use the given claims to express the
corresponding null and alternative hypotheses in
symbolic form.

a) The proportion of drivers who admit to running red lights is

greater than 0.5.

b) The mean height of professional basketball players is at most

7 ft.

c) The standard deviation of IQ scores of actors is equal to 15.

1. The average miniature horse is less than 34 inches at the shoulder. Tiny Equines claims
that their miniature horses are an average of 3 inches less than the breed average.
2. Speedy Solutions is a delivery company that claims all deliveries average less than 72
hours.
3. Terrific Textiles claims that 45% to 55% of t-shirts sold in CO are red.
4. Gas Hater Car Sales claims that 70% or more of the cars on the lot average more than
40 mpg.
5. The 2011 average service time for Fast Fatz Burgers was 56 seconds. The store
manager claims that the 2012 average is more than 5 seconds faster.
6. Colourful Cavity Causers sells multi-colored candies by the bag. Each bag is claimed to
average between 5.5 and 6.5 oz.
7. Aaron works for an electronics company, quality-testing batteries. The company claims
a minimum of 5 hrs battery life.
 Critical Region

The critical region (or rejection region) is the set of

all values of the test statistic that cause us to reject
the null hypothesis.
 Significance Level

The significance level (denoted by ) is the probability

that the test statistic will fall in the critical region
when the null hypothesis is actually true.
Common choices for  are 0.05, 0.01, and 0.10.
Critical Region, Critical Value, Test Statistic
 Two-tailed, Right-tailed,
Left-tailed Tests

• The tails in a distribution are the extreme

regions bounded by critical values.
 Two-tailed Test
H0: =  is divided equally between
the two tails of the critical
H1:  region

Means less than or greater than

Right-tailed Test
H0 : =
H1 : >
Points Right
 Left-tailed Test
H0: =
H1: <
Points Left
 Hypothesis Testing for Differences
Hypothesis Tests

Parametric Tests Non-parametric

(Metric) Tests (Nonmetric)

One Two or More

Sample Samples
* t test
* Z test Independent
Samples
* Two-Group t test * Paired t test
* Z test
 Developing Null and Alternative Hypotheses

 Null Hypothesis as an Assumption to be Challenged

• Example:
The label on a soft drink bottle states that it
contains 67.6 fluid ounces.
• Null Hypothesis:
The label is correct. m > 67.6 ounces.
• Alternative Hypothesis:
The label is incorrect. m < 67.6 ounces.
 Summary of Forms for Null and Alternative
Hypotheses about a Population Mean

 The equality part of the hypotheses always appears

in the null hypothesis.
 In general, a hypothesis test about the value of a
population mean µ must take one of the following
three forms (where µ0 is the hypothesized value of
the population mean).

H 0 :   0 H 0 :   0 H 0 :   0
H a :   0 H a :   0 H a :   0

One-tailed One-tailed Two-tailed

(lower-tail) (upper-tail)
 Example

When a robot welder is in adjustment, its mean time to perform its

task is 1.3250 minutes. Past experience has found the standard
deviation of the cycle time to be 0.0396 minutes. An incorrect
mean operating time can disrupt the efficiency of other activities
along the production line. For a recent random sample of 80 jobs,
the mean cycle time for the welder was 1.3229 minutes. Does the
machine appear to be in need of adjustment?
 Building Hypotheses

What decision is to be made?

– The robot welder is in adjustment.
– The robot welder is not in adjustment.
How will we decide?
– “In adjustment” means µ = 1.3250 minutes.
– “Not in adjustment” means µ ≠1.3250 minutes.
Which requires a change from business as usual?
What triggers new action?
– Not in adjustment - H1: µ ≠ 1.3250 minutes
– In adjustment - H0: µ = 1.3250 minutes
Let  = the average height of current NCSU students. From a sample of 100 students
we obtain a point estimate X =5’9”. Assume the average height of 5 years ago is
5’8”.
Q: Has the average height of NCSU students increased? That is,  =5’8” or  >
5’8”?