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Chapter 11

Statistical Inference:
Hypothesis Testing for
Two Populations

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Learning Objectives

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Upon completion of this chapter, you will be able to:

 Test the hypothesis for the difference between two population

means using the z statistic
 Test the hypothesis for the difference between two population
means using the t statistic
 Understand the concept of statistical inference of the difference
between the means of two related populations (matched
samples)
 Test hypothesis for the difference in two population proportions
 Test hypothesis about two population variances (F distribution)

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Hypothesis Testing for the Difference Between

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Two Population Means Using the Z Statistic

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Hypothesis Testing for the Difference Between

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Two Population Means Using the Z Statistic

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Example 11.1 Two consumer durables companies market
two brands of electric irons A and B, respectively. A
researcher has taken a random sample of size 35 from the
first company and size 40 from the second company and
computed the average life of both the brands in months
(average life is shown in Table 11.1(a) and 11.1(b)). Is
there a significant difference between the average life of
the two brands A and B? Take 95% as the confidence
level.

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Example 11.1 (Contd.)

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Solution: (Example 11.1)

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Using MS Excel for Hypothesis Testing with the z

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Statistic for the Difference in Means of Two
Populations

Solved Examples\Excel\Ex 11.1.xls

Confidence interval to estimate the difference in two population

means

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Hypotheseis Testing for the Difference Between Two
Population Means Using the t Statistic (Case of a Small Random

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Sample, n1, n2 < 30, When Population Standard Deviation Is
Unknown)

When sample size is small (n1, n2 < 30) and samples are independent
(not related) and the population standard deviation is unknown, the t
statistic can be used to test the hypothesis for difference between two
population means.

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Hypotheseis Testing for the Difference Between Two
Population Means Using the t Statistic (Case of a Small Random

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Sample, n1, n2 < 30, When Population Standard Deviation Is
Unknown)

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 Copyright© Dorling Kindersley India Pvt Ltd
Example 11.2: Anmol Constructions is a leading company in the
construction sector in India. It wants to construct flats in Raipur and
Dehradun, the capitals of the newly formed states of Chattisgarh and
Uttarakhand, respectively. The company wants to estimate the amount
that customers are willing to spend on purchasing a fl at in the two cities.
It randomly selected 25 potential customers from Raipur and 27
customers from Dehradun and posed the question, “how much are you
willing to spend on a flat?” The data collected from the two cities is shown
in Table 11.2(a) and Table 11.2(b). The company assumes that the
intention to purchase of the customers is normally distributed with equal
variance in the two cities taken for the study. On the basis of the samples
taken for the study, estimate the difference in population means taking
95% as the confidence level.

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Example 11.2 (Contd.)

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Solution (Example 11.2)

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Solved Examples\Excel\Ex 11.2.xls
Solved Examples\Minitab\Ex 11. 2.MPJ
Solved Examples\SPSS\Ex 11.2.sav
Solved Examples\SPSS\Output Ex 11.2.spo

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Statistical Inference About the Difference Between the
Means of Two Related Populations (Matched Samples)

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 For dependent samples or related samples, it is important that
the two samples taken in the study are of the same size.
 t Formula to test the difference between the means of two
related populations (matched samples)

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Example 11.3: An electronic goods
company arranged a special training
programme for one segment of its
employees. The company wants to
measure the change in the attitude of its
employees after the training. For this
purpose, it has used a well-designed
questionnaire, which consists of 10
questions on a 1 to 5 rating scale (1 is
strongly disagree and 5 is strongly
agree). The company selected a random
sample of 10 employees. The scores
obtained by these employees are given Use α = 0.10 to determine whether there
in Table 11.3. is a significant change in the attitude of
employees after the training programme.

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Solution (Example 11.3)

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Solved Examples\Excel\Ex 11.3.xls
Solved Examples\Minitab\Ex 11.3.MPJ
Solved Examples\SPSS\Ex 11.3.sav
Solved Examples\SPSS\Output Ex 11.3.spo

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Hypothesis Testing for the Difference in Two

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Population Proportions

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Hypothesis Testing for the Difference in Two

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Population Proportions

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Example 11.4: There has been a fundamental shift in Indian economy after 1991. All
business sectors including the banking sector have been affected by the liberalization and
privatization measures of the government. Due to heavy competition, Indian public sector
banks have also adopted consumer-friendly policies such as extending service time for
their customers. On one hand, changes introduced by the banks enhance the quality of
services; however, on the other hand, they are also responsible for generating stress
among employees. A researcher wants to assess the stress levels of bank employees. The
researcher has selected two banks, A & B for this purpose. The working hours of bank A
are from 10 a.m to 3.30 p.m and the working hours of bank B are from 8.00 a.m to 8.00
p.m. The researcher has randomly selected 40 employees from bank A and 10 of them
have indicated high stress levels. The researcher has also randomly selected 50
employees from bank B and 22 of them have indicated high stress levels. Does this
indicate that the stress levels of employees of bank B are significantly higher. Test the
hypothesis by taking 99% as the confidence level.

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Example 11.4 (Solution)

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Solved Examples\Minitab\Ex 11.4.MPJ

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Hypothesis Testing About Two Population

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Variances (F Distribution)

Figure 11.25 : Acceptance and rejection regions for a two-tailed F test

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F test for the difference in two population

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variances

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F Distribution

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 In the F distribution, degrees of freedom are attached to the
numerator and denominator, which decide the shape of the F
distribution. F distribution is based on the assumption that the
populations from which samples are drawn are normally distributed.
 The F distribution is neither symmetric nor does it have a zero
mean value. So, the simple procedure of obtaining the upper-tail
value and merely placing a minus sign besides to the upper-tail
value for obtaining the lower tail value is not applicable here.
 The F value is always positive because it is a ratio of two
variances (two squared quantities). The lower-tail value is obtained
by using the reciprocal property of the F distribution.

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F Distribution (Contd.)
The reciprocal property can be stated as:

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Example 11.5: A plant has installed two machines producing polythene bags. During
the installation, the manufacturer of the machine has stated that the capacity of the
machine is to produce 20 bags in a day. Owing to various factors such as different
operators working on these machines, raw material, etc. there is a variation in the
number of bags produced at the end of the day. The company researcher has taken a
random sample of bags produced in 10 days for machine 1 and 13 days for machine 2,
respectively. The following data gives the number of units of an item produced on a
sampled day by the two machines:

How can the researcher determine whether the variance is from the same
population (population variances are equal) or it comes from different populations
(population variances are not equal)? Take α = 0.05 as the confidence level.

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Solution (Example 11.5)

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Using MS Excel for Hypothesis Testing about

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Two Population Variances (F distribution)

 Solved Examples\Excel\Ex 11.5.xls

 Solved Examples\Minitab\Ex 11.5.MPJ

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