AXX-212 Business Statistics - II

 The Standart Normal Distribution

 Applications of the Normal Distribution
 Central Limit Theorem
 Confidence Intervals and the Sample Size
 Hypothesis Testing
 Steps in Hypothesis Testing
 Large Sample Mean Test
 Small Sample Mean Test
 Proportion Test
 Varince and Standart Deviation Test
 Testing the Difference among Means, Variances , and Proportions
 Correlation and Regression, The Multiple Regression
 Chi – Square
 The F – test and Analysis of Variance
 Nonparametric Statistics
 Finding the Chi-Square Critical Value (s)
9-6 Variance or Standart Deviation Test

The chi-square distribution was used to construct a confidence interval

for a single variance or standard deviation. This distribition is also used to
test a claim about a single variance or standart deviation.

In order to find the area under the chi-square distribition, use Table-G in
There are three cases consider:

1. Finding the chi-square critical value for a specific when the

hypothesis test is right-tailed.

2. Finding the chi-square critical value for a specific when the hypothesis
test is left-tailed

3. Finding the chi-square critical values for a specific ,when the

hypothesis test is two-tailed
 Finding the Chi-Square Critical Value (s)
Example 9-19: Find the critical chi-square value for 15 degrees of freedom
when and the test is right-tailed
Solution
Figure 9-26
Find the value at the top of Chi-square distribution
Table G and find the For example 9-19
corresponding degrees of
freedom in the left column. The
critical value is located where
the two columns meet in this
case, 24.996. See figure 9-27
α
Degrees of
freedom 0.995 0.99 0.975 0.95 0.90 0.10 0.05 0.025 0.01 0.005
1
2
3
.
.
15 24.996
16
.
 Finding the Chi-Square Critical Value (s)

Example 9-20 Find the critical chi-square value for 10 degrees of freedom when
and the test is left-tailed.

Solution
This distribution is shown in Figure 9-28.

Figure 9-28
Chi-square Distribution
For Example 9-20
 Finding the Chi-Square Critical Value (s)
When the test is one-tailed left, the value must be subtracted from 1:
. The left side of the table is used, becouse the
chi-square statistic cannot be negative. The table is set up so that it
gives The values for the area to the right of the critical value. In this
case, %95 of the area will be to the right of the value.
For 0.95 and 10 degrees of freedom, the critical value is 3.940. As we
can See in the figure

α
Degrees
of
freedom 0.995 0.99 0.975 0.95 0.90 0.10 0.05 0.025 0.01 0.005

10 3.940

.
 Finding the Chi-Square Critical Value (s)
Example 9-21 Find the critical chi-square values for 22 degrees of
freedom when and a two-tailed test is conducted.
Solution

When a two-tailed test is conducted, the area must be split, as shown in

Figure . Note that the area to the right of the larger value is 0.025 (0.05/2), and
the area to the right of the smaller value is 0.975 (1.00 – 0.05/2).
Remember that chi-square values cannot be negative. Hence, one must use
values in the table of 0.025 and 0.975. with 22 degrees of freedom, the
critical values are 36,781 and 10,982, respectively.

After the degrees of freedom reach 30, table G gives values

only for multiples of 10 (40, 50, 60, etc.). When the exact
degrees of freedom one is seeking are not specified in the
table, the closest smaller value should be used. For example,
if the given degrees of freedom are 36, use the table value 30
degrees of freedom. This guideline keeps the type I error equal
to or below the value
 Finding the Chi-Square Critical Value (s)
When one is testing a claim about a single variance, there are three possible
test situations: right-tailed test, left-tailed test and two-tailed test.
If a researcher belives the variance of a population to be greater than some specific
Value, say 225, then the researcher states the hypotheses as

and conducts a right-tailed test.

If the researcher belives the variance of a population to be less than 225, then
The researcher states the hypotheses as

and conducts a left-tailed test.

Finally, if a researcher does not wish to specify a direction, he or she states the
Hypotheses as

and conducts a two-tailed test.

Finding the Chi-Square Critical Value (s)

Formula for the Chi-Square Test for a Single Variance

With degrees of freedom equal to n - 1 and where

n = sample size

= sample variance

= population variance
 Finding the Chi-Square Critical Value (s)

One might ask, “Why is it important to test variances?” there are

several reasons. First, in any situation where consistency is required,
such as in manufacturing, one would like to have the smallest
variation possible in the products.

For example, when bolts are manufactured, the variation in diameters

due to the process must be kept to a minimum, or the nuts will not fit
them properly. In education, consistency is required on a test. That
is, if the same students take the same test several times, they sould
get approximately the same grades, and the variance of each of the
students’ grades should be small.

On the other hand, if the test is to be used to judge learning, the

overall standart deviation of all of the grades should be large so that
one can differentiate those who have learned the subject from those
who have not learned it.
Finding the Chi-Square Critical Value (s)

Three assumption are made for the chi-square test, as outlined next.

Assumptions for the Chi-Square Test for a Single Variance

1. The sample must be randomly selected from the
population

2. The population must be normally distributed for the

variable under study

3. The observations must be independent of each other.

 Finding the Chi-Square Critical Value (s)

The hypothesis-testing procedure follows the

same five steps listed for hypothesis test in the
preceding chapters.

Step 1 State the hypotheses and identify the claim

Step 2 Find the critical value(s)

Step 3 Compute the test value.

Step 4 Make the decision

Step 5 Summarize the results.

The next three examples illustrate the hypothesis-testing

procedure for variances.
 Finding the Chi-Square Critical Value (s)
Example An instructor wishes to see whether the variation in scores of the 23
9-22 students in her class is less than the variance of the population.The
variance of the class is 198. Is there enough evidence to support the
claim that the variation of the students is less than the population
variance at Assume that the scores are
normally distributed.
Solution
Step 1 State the hypotheses and identify the claim.
and
Step 2 Find the critical value. Since this test is left-tailed and , use
the value 1 – 0.05 = 0.95. the degrees of freedom are n-1 = 23-1 = 22. hence,
the critical value is 12.338. Note that critical region is on the left, as shown in
figure 9-31.

Figure 9-31
Critical Value for
Example 9-22
 Finding the Chi-Square Critical Value (s)
Step 3 Compute the test value.

Step 4 Make the decision since the test value 19.36 falls on the
noncritical region, as shown in figure 19-32 the decision is not to
reject the null hypothesis

Figure 9-32
Critical and Test Values
for Example 9-22

Step 5
Summarize the results. There is not enough evidence to support the claim
that the variation in the test scores of the instructor’s students is less than the
variation in scores of hte population.
 Finding the Chi-Square Critical Value (s)

Example 9-23 A medical researcher belives that the standart deviation of the
temperatures of newborn infants is greater than . A sample of
15 infants was found to have a standart deviation of . At
does the evidence support the researcher’s belief? Assume that the
variable is normally distributed.
Solution

Step 1 State the hypotheses and identify the claim.

and

Note that since standart deviations are given in the problem,

they must be squared to get variances

Step 2 Find the ciritical value. Since this test is right-tailed with d.f. of
15-1=14 and , the critical value is 21.064
 Finding the Chi-Square Critical Value (s)
Example 9-23 A medical researcher belives that the standart deviation of the
temperatures of newborn infants is greater than . A sample of
15 infants was found to have a standart deviation of . At
does the evidence support the researcher’s belief? Assume that the
variable is normally distributed.
Step 3 Compute the test value.

Step 4 Make the decision. The decision is to reject the null hypothesis
since the test value 24.89 is greater than the critical value
21.064 and falls in the critical region, as shown in Figure 9-33.
Figure 9-33
Critical and Test Values
for Example 9-23
Finding the Chi-Square Critical Value (s)

and
Step 5 Summarize the result. There is enough evidence to
support the claim that the standart deviation of the
temperatures is greater than 0.6°.

Approximate P-values for the chi-square test can ben found using Table G
much the same way as P-values for the t test. In Example 9-23, one would
look across the row with 14 degrees of freedom and find the two values that
24.89 falls between.

They are 23.685 and 26.119. these values correspond to 0.05 and 0.025;
hence 0.025 < p < 0.05. thus, the null hypothesis can be rejected at =
0.05. Since =0.05 is less than =0.10 stated in Example 9-23, the
decision is to reject the null hypothesis
 Finding the Chi-Square Critical Value (s)

Example 9-24 A cigarette manufacturer wishes to test the claim that the variance of
the nicotine content of its cigarettes is 0.644. nicotine content is
measured in milligrams, and assume that it is normally distributed. A
sample of 20 cigarettes has a standard deviation of 1.00 milligram.
At =0.05, is there enough evidence to support the manufacturer’s
claim?
Solution

Step 1 State the hypotheses and identify the claim.

and
 Finding the Chi-Square Critical Value (s)
Step 2 Find the ciritical values. Since this test is a two-tailed test
at The critical values for 0.025 and 0.975 must be
found. The degrees of freedom are 19; hence, the critical
values are 32.852 and 8.907. the critical or rejection regions are
shown in Figure 9-34

Figure 9-34
Critical Values for
Example 9-24

Step 3 Compute the test value.

Since the standard deviation s is given in the

problem, it must be squared for the formula.
 Finding the Chi-Square Critical Value (s)

Step 4 Make the decision. Do not reject the null hypothesis, since
the test value falls between the critical values (8.907 < 29.5
< 32.852) and in the noncritical region, as shown in Figure
9-35.

Figure 9-35
Critical and Test Values
for Example 9-24

Step 5 Summarize the result. There is not enough evidence to

reject the manufacturer’s claim that the variance of the
nicotine content of the cigarettes is equal to 0.644.