11

p t er
C ha

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference:
Hypothesis Testing for
Two Populations

Statistical Inference: Hypothesis Testing for Two Populations 1

 Learning Objectives

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

Copyright© Dorling Kindersley India Pvt. Ltd

 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)

Statistical Inference: Hypothesis Testing for Two Populations 2

Hypothesis Testing for the Difference Between
Two Population Means
Using the Z Statistic

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference: Hypothesis Testing for Two Populations 3
Hypothesis Testing for the Difference Between
Two Population Means
Using the Z Statistic

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference: Hypothesis Testing for Two Populations 4
 Example 11.1

Copyright© Dorling Kindersley India Pvt. Ltd

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.

Statistical Inference: Hypothesis Testing for Two Populations 5

 Example 11.1 (Contd.)

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference: Hypothesis Testing for Two Populations 6
Solution (Example 11.1)

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference: Hypothesis Testing for Two Populations 7
 Using MS Excel for Hypothesis Testing with
the z Statistic for the Difference in Means of
Two Populations

Copyright© Dorling Kindersley India Pvt. Ltd

Solved Examples\Excel\Ex 11.1.xls

Confidence interval to estimate the difference in two population

means

Statistical Inference: Hypothesis Testing for Two Populations 8

 Hypotheseis Testing for the Difference
Between Two Population Means Using the t
Statistic (Case of a Small Random Sample, n1,

Copyright© Dorling Kindersley India Pvt. Ltd

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.

Statistical Inference: Hypothesis Testing for Two Populations 9

 Hypotheseis Testing for the Difference Between Two
Population Means Using the t Statistic (Case of a Small
Random Sample, n1, n2 < 30, When Population
Standard Deviation Is Unknown)

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference: Hypothesis Testing for Two Populations 10
 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

Copyright© Dorling Kindersley India Pvt. Ltd

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.

Statistical Inference: Hypothesis Testing for Two Populations 11

 Example 11.2 (Contd.)

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference: Hypothesis Testing for Two Populations 12
 Solution (Example 11.2)

Copyright© Dorling Kindersley India Pvt. Ltd

Solved Examples\Excel\Ex 11.2.xls
Solved Examples\Minitab\Ex 11. 2.MPJ
Ch 11 Solved Examples\SPSS\Ex 11.2.sav
Ch 11 Solved Examples\SPSS\Output Ex 11.2.spv
Statistical Inference: Hypothesis Testing for Two Populations 13
 Statistical Inference About the Difference
Between the Means of Two Related Populations
(Matched Samples)

Copyright© Dorling Kindersley India Pvt. Ltd

 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)

Statistical Inference: Hypothesis Testing for Two Populations 14

 Example 11.3

An electronic goods company

arranged a special training

Copyright© Dorling Kindersley India Pvt. Ltd

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 Use α = 0.10 to determine whether there is a
significant change in the attitude of
employees. The scores obtained by
employees after the training programme.
these employees are given in Table
11.3.

Statistical Inference: Hypothesis Testing for Two Populations 15

 Solution (Example 11.3)

Copyright© Dorling Kindersley India Pvt. Ltd

 Solved Examples\Excel\Ex 11.3.xls
 Solved Examples\Minitab\Ex 11.3.MPJ
 Ch 11 Solved Examples\SPSS\Ex 11.3.sav
 Ch 11 Solved Examples\SPSS\Output Ex 11.3.spv
Statistical Inference: Hypothesis Testing for Two Populations 16
Hypothesis Testing for the Difference in Two
Population Proportions

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference: Hypothesis Testing for Two Populations 17
Hypothesis Testing for the Difference in Two
Population Proportions

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference: Hypothesis Testing for Two Populations 18
 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

Copyright© Dorling Kindersley India Pvt. Ltd

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 am to 3.30 pm and the working
hours of bank B are from 8.00 am to 8.00 psm. 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.

Statistical Inference: Hypothesis Testing for Two Populations 19

Solution (Example 11.4)

Copyright© Dorling Kindersley India Pvt. Ltd

Solved Examples\Minitab\Ex 11.4.MPJ
Statistical Inference: Hypothesis Testing for Two Populations 20
Hypothesis Testing About Two Population
Variances (F Distribution)

Copyright© Dorling Kindersley India Pvt. Ltd

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

Statistical Inference: Hypothesis Testing for Two Populations 21

F test for the difference in two population
variances

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference: Hypothesis Testing for Two Populations 22
 F Distribution
 In the F distribution, degrees of freedom are attached to the
numerator and denominator, which decide the shape of the F

Copyright© Dorling Kindersley India Pvt. Ltd

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.

Statistical Inference: Hypothesis Testing for Two Populations 23

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

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference: Hypothesis Testing for Two Populations 24
 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

Copyright© Dorling Kindersley India Pvt. Ltd

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.

Statistical Inference: Hypothesis Testing for Two Populations 25

Solution (Example 11.5)

Copyright© Dorling Kindersley India Pvt. Ltd

Statistical Inference: Hypothesis Testing for Two Populations 26
Using MS Excel for Hypothesis Testing about
Two Population Variances
(F distribution)

Copyright© Dorling Kindersley India Pvt. Ltd

 Solved Examples\Excel\Ex 11.5.xls
 Solved Examples\Minitab\Ex 11.5.MPJ

Statistical Inference: Hypothesis Testing for Two Populations 27