CH 4 - Estimation & Hypothesis One Sample

Chapter 5a
Inferences Based on a Single Sample:

Estimation with Confidence Intervals
Thinking Challenge
Suppose youre interested
in the average amount of
money that students in
this class (the population)
have on them. How
would you find out?
Introduction
to Estimation
Statistical Methods
Statistical
Methods
Estimation
Hypothesis
Testing
Inferential
Statistics
Descriptive
Statistics
Estimation Process
Mean, , is
unknown
Population

Sample

Mean
X = 50
Random Sample

I am 95%
confident that
is between 40 &
60.

Unknown Population Parameters Are
Estimated
Estimate Population
Parameter...
with Sample
Statistic
Differences

1
-
2
x
1
- x
2
Variance
o
2
s
2
^
Proportion p p
Mean
x
Estimation Methods
Estimation
Interval
Estimation
Point
Estimation
Point Estimation
Estimation Methods
Estimation
Interval
Estimation
Point
Estimation
Point Estimation
1. Provides a single value
Based on observations from one sample
2. Gives no information about how close the value is
to the unknown population parameter
3. Example: Sample mean x = 3 is point
estimate of unknown population mean
Interval Estimation
Estimation Methods
Estimation
Interval
Estimation
Point
Estimation
Interval Estimation
1. Provides a range of values
Based on observations from one sample
2. Gives information about closeness to unknown population
parameter
Stated in terms of probability
Knowing exact closeness requires knowing unknown
population parameter
3. Example: Unknown population mean lies between 50 and 70
with 95% confidence
Key Elements of
Interval Estimation
Sample statistic
(point estimate)
Confidence interval
Confidence limit
(lower)
Confidence limit
(upper)
A probability that the population parameter falls
somewhere within the interval.
Confidence Limits
for Population Mean
x
x
x x
Z X
Z Error
Error X
Z
X X Error
Error X
o
o
o o

=
=
=
=
+ =
=
) 5 (
(4)
(3)
or (2)
) 1 (
Parameter =
Statistic Error
Many Samples Have Same Interval
o
x
_
X

X = Zo
x
90% Samples

+1.65o
x
-1.65o
x
95% Samples
+1.96o
x
-1.96o
x
99% Samples
-2.58o
x
+2.58o
x
Confidence Level
1. Probability that the unknown population
parameter falls within interval
2. Denoted (1 o)
o is probability that parameter is not
within
interval
3. Typical values are 99%, 95%, 90%
Intervals & Confidence Level

x
=

1 -
o
o
/2
o
/2
X
_
o
x
_
Sampling Distribution of Sample Mean
Large number of intervals
(1 )% of
intervals
contain
% do not
Intervals
extend from
X Z
X
to
X + Z
X
Factors Affecting
Interval Width
1. Data dispersion
Measured by o
Intervals extend from
X Zo
X
toX + Zo
X

1984-1994 T/Maker Co.
3. Level of confidence
(1 o)
Affects Z
2. Sample size

X
n
o
o =
Confidence Interval Estimates
Confidence
Intervals
Mean Proportion
Known

Unknown
Confidence Interval Estimate
Mean (o Known)
Confidence
Intervals
Mean Proportion
Known

Unknown
Confidence Interval
Mean (o Known)
1. Assumptions
Population standard deviation is known
Population is normally distributed
If not normal, can be approximated by normal
distribution (n > 30)
n
Z X
n
Z X
o
o
o o
+ s s
2 / 2 /
2. Confidence interval estimate
Estimation Example
Mean (o Known)
The mean of a random sample of n = 36 isX =
50. Set up a 95% confidence interval estimate for
if o = 10.

27 . 53 73 . 46
36
10
96 . 1 50
36
10
96 . 1 50
2 / 2 /
s s
+ s s
+ s s
o
o o
n
Z X
n
Z X
Thinking Challenge
Youre a Q/C inspector for
Gallo. The o for 2-liter bottles
is .05 liters. A random sample
of 100 bottles showed x = 1.99
liters. What is the 90%
confidence interval estimate of
the true mean amount in 2-
liter bottles?
2 liter
1984-1994 T/Maker Co.
2 liter
Confidence Interval
Solution*
998 . 1 982 . 1
100
05 .
645 . 1 99 . 1
100
05 .
645 . 1 99 . 1
2 / 2 /
s s
+ s s
+ s s
o
o o
n
Z X
n
Z X
Confidence Interval Estimate
Mean (o Unknown)
Confidence
Intervals
Mean Proportion
Known

Unknown
Confidence Interval
Mean (o Unknown)
1. Assumptions
Population standard deviation is unknown
Population must be normally distributed
2. Use Students tdistribution
Z
t
Students t Distribution
0
t (df = 5)
Standard
Normal
t (df = 13)
Bell-Shaped
Symmetric
Fatter Tails
Degrees of Freedom (df)
1. Number of observations that are free to vary after
sample statistic has been calculated
2. Example
Sum of 3 numbers is 6
X
1
= 1 (or any number)
X
2
= 2 (or any number)
X
3
= 3 (cannot vary)
Sum = 6
degrees of freedom
= n - 1
= 3 - 1
= 2
v t
.10
t
.05
t
.025
1 3.078 6.314 12.706
2 1.886 2.920 4.303
3 1.638 2.353 3.182
Students t Table
t values
Assume:
n = 3
df = n - 1 = 2
o = .10
o/2 =.05
t
0
o / 2
o / 2
t 2.920
Confidence Interval
Mean (o Unknown)
/ 2 / 2
1
S S
X t X t
n n
df n
o o
s s +
=
Estimation Example
Mean (o Unknown)
/ 2 / 2
8 8
50 2.064 50 2.064
25 25
46.69 53.30
S S
X t X t
n n
o o
s s +
s s +
s s
A random sample of n = 25 has x = 50 and s = 8.
Set up a 95% confidence interval estimate for .
Thinking Challenge
Youre a time study analyst in
manufacturing. Youve
recorded the following task
times (min.):
3.6, 4.2, 4.0, 3.5, 3.8, 3.1.
What is the 90% confidence
interval estimate of the
population mean task time?
Confidence Interval Solution*
x = 3.7
s = 0.38987
n = 6, df = n - 1 = 6 - 1 = 5
t
.05
= 2.015
0.38987 0.38987
3.7 - 2.015 ------------ 3.7 + 2.015 -------------
6 6
3.3793 4.0207
Confidence Interval Estimate of
Proportion
Confidence
Intervals
Mean Proportion
Known

Unknown
Confidence Interval
Proportion
1. Assumptions
Random sample selected
Normal approximation can be used if

2 2

pq pq
p z p p z
n n
o o
s s +
2. Confidence interval estimate

15 and 15 np nq > >
Estimation Example
Proportion
A random sample of 400 graduates showed 32 went
to graduate school. Set up a 95% confidence
interval estimate for p.
/ 2 / 2

.08 .92 .08 .92
.08 1.96 .08 1.96
400 400
.053 .107
pq pq
p Z p p Z
n n
p
p
o o
s s +

s s +
s s
Thinking Challenge
Youre a production manager
for a newspaper. You want to
find the % defective. Of 200
newspapers, 35 had defects.
What is the 90% confidence
interval estimate of the
population proportion
defective?
Confidence Interval
Solution*
/ 2 / 2

.175 (.825) .175 (.825)
.175 1.645 .175 1.645
200 200
.1308 .2192
p q p q
p z p p z
n n
p
p
o o

s s +

s s +
s s
Finding Sample Sizes
for Estimating
2 2
2 2
2
2
(1)
(2)
( )
(3)
( )
x x
x
X SE
Z
SE Z Z
n
Z
n
SE
o o
o
o o
o
o
o
= =
= =
=
SE = Sampling Error
I dont want to
sample too much
or too little!
Sample Size Example
What sample size is needed to be 90% confident the
mean is within 5? A pilot study suggested that the
standard deviation is 45.
( ) ( )
( )
2 2
2 2
2
2 2
( ) 1.645 45
219.2 220
( )
5
Z
n
SE
o
o
= = = ~
for Estimating p

2 2
2
2
2
(1)
(2)
( )
(3)
( )
p p
p
p p SE
Z
pq
SE Z Z
n
Z pq
n
SE
o o
o
o o
o
= =
= =
=
SE = Sampling Error
If no estimate of p is
available, use p = q = .5
Sample Size Example
What sample size is needed to estimate p with 90% confidence
and a width of .03?

(1.645) (0.5 0.5)
N = ----------------------- = 3006.69 3007
(0.015)
.03
.015
2 2
width
SE = = =
Thinking Challenge
You work in Human Resources at
Merrill Lynch. You plan to survey
employees to find their average
medical expenses. You want to be
95% confident that the sample
mean is within $50.
A pilot study showed that o was
about $400. What sample size do
you use?
Sample Size Solution*
( ) ( )
( )
2 2
2
2
2 2
2
( )
( )
1.96 400
50
245.86 246
Z
n
SE
o
o
=
=
= ~
Hypothesis Testing Concepts
Hypothesis Testing
Population

I believe the
population mean
age is 50
(hypothesis).
Mean
X = 20
Random
sample

Reject
hypothesis!
Not close.
Whats a Hypothesis?
A belief about a population
parameter
Parameter is
population mean,
proportion, variance
Must be stated
before analysis
I believe the mean GPA of
this class is 3.5!
1984-1994 T/Maker Co.
Null Hypothesis
1. What is tested
2. Has serious outcome if incorrect decision made
3. Always has equality sign: =, s, or >
4. Designated H
0
(pronounced H-oh)
5. Specified as H
0
: = some numeric value
Specified with = sign even if s or >
Example, H
0
: = 3
Alternative Hypothesis
1. Opposite of null hypothesis
2. Always has inequality sign: =, <, or >
3. Designated H
a

4. Specified H
a
: =, <, or > some value
Example, H
a
: < 3
Identifying Hypotheses
Steps
Example problem: Test that the population mean is
not 3
Steps:
State the question statistically ( = 3)
State the opposite statistically ( = 3)
Must be mutually exclusive & exhaustive
Select the alternative hypothesis ( = 3)
Has the =, <, or > sign
State the null hypothesis ( = 3)
What Are the Hypotheses?
State the question statistically: = 12
State the opposite statistically: = 12
Select the alternative hypothesis: H
a
: = 12
State the null hypothesis: H
0
: = 12

Is the population average amount of TV
viewing 12 hours?
State the question statistically: = 12
State the opposite statistically: = 12
a
: = 12
0
: = 12

Is the population average amount of TV
viewing different from 12 hours?
State the question statistically: s 20
State the opposite statistically: > 20
a
: > 20
0
: = 20

Is the average cost per hat less than or equal
to $20?
State the question statistically: > 25
State the opposite statistically: s 25
a
: > 25
0
: = 25

Is the average amount spent in the bookstore
greater than $25?
Basic Idea
Sample Means
= 50
H
0
Sampling Distribution
It is unlikely
that we would
get a sample
mean of this
value ...
20
... if in fact this were
the population mean
... therefore, we
reject the
hypothesis that
= 50.
Level of Significance
1. Probability
2. Defines unlikely values of sample statistic if null
hypothesis is true
Called rejection region of sampling
distribution
3. Designated o (alpha)
Typical values are .01, .05, .10
4. Selected by researcher at start
Rejection Region
(One-Tail Test)
H
o
Value
Critical
Value
o
Sample Statistic
Rejection
Region
Nonrejection
Region
1 o
Level of Confidence
Observed sample statistic
Rejection Region
(One-Tail Test)
Level of Confidence
H
o
Value
Critical
Value
o
Sample Statistic
Rejection
Region
Nonrejection
Region
1 o
Level of Confidence
Rejection Regions
(Two-Tailed Test)
H
o
Value
Critical
Value
Critical
Value
1/2
o
1/2
o
Sample Statistic
Rejection
Region
Rejection
Region
Nonrejection
Region
1 o
Level of Confidence
H
o
Value
Critical
Value
Critical
Value
1/2
o
1/2
o
Sample Statistic
Rejection
Region
Rejection
Region
Nonrejection
Region
1 o
Level of Confidence
Rejection Regions
(Two-Tailed Test)
Level of Confidence
H
o
Value
Critical
Value
Critical
Value
1/2
o
1/2
o
Sample Statistic
Rejection
Region
Rejection
Region
Nonrejection
Region
1 o
Level of Confidence
Rejection Regions
(Two-Tailed Test)
Level of Confidence
Decision Making Risks
Errors in
Making Decision
1. Type I Error
Reject true null hypothesis
Has serious consequences
Probability of Type I Error is o (alpha)
Called level of significance
2. Type II Error
Do not reject false null hypothesis
Probability of Type II Error is | (beta)
Decision Results
H
0
: Innocent
Jury Trial
Actual Situation
Verdict Innocent Guilty
Innocent Correct Error
Guilty Error Correct
H
0
Test
Actual Situation
Decision H
0
True H
0
False
Accept
H
0
1 o
Type II
Error
(|)
Reject
H
0
Type I
Error (o)
Power
(1 |)
o & | Have an
Inverse Relationship
You cant reduce both
errors simultaneously!
Factors Affecting
1. True value of population parameter
Increases when difference with hypothesized
parameter decreases
2. Significance level, o
Increases when o decreases
3. Population standard deviation, o

Increases when o

increases
4. Sample size, n
Increases when n decreases
Hypothesis Testing Steps
H
0
Testing Steps
State H
0

State H
a

Choose o
Choose n
Choose test
Set up critical values
Collect data
Compute test statistic
Make statistical decision
Express decision
One Population Tests
One
Population
Z Test
(1 & 2
tail)
t Test
(1 & 2
tail)
Z Test
(1 & 2
tail)
Mean Proportion Variance
_
2
Test
(1 & 2
tail)
Two-Tailed Z Test
of Mean (o Known)
One
Population
Z Test
(1 & 2
tail)
t Test
(1 & 2
tail)
Z Test
(1 & 2
tail)
_
2
Test
(1 & 2
tail)
Two-Tailed Z Test
for Mean (o Known)
1. Assumptions
If not normal, can be approximated by
normal distribution (n > 30)
2. Alternative hypothesis has = sign
x
x
X X
Z
n

o
o

= =
3. Z-Test Statistic
Two-Tailed Z Test
for Mean Hypotheses
H
0
: = 0 H
a
: 0
Z
0
Reject H
0
o / 2 o / 2
Reject H
.500
- .025
.475

Z 0
o
= 1
Two-Tailed Z Test
Finding Critical Z
What is Z given o = .05?
o / 2 = .025

Z .05 .07
1.6 .4505 .4515 .4525
1.7 .4599 .4608 .4616
1.8 .4678 .4686 .4693
.4744 .4756
.06
1.9 .4750
Standardized Normal
Probability Table (Portion)

1.96 -1.96
Two-Tailed Z Test Example
Does an average box of cereal
contain 368 grams of cereal? A
random sample of 64 boxes
showed x = 372.5. The company
has specified o to be 15 grams.
Test at the .05 level of
significance.
368 gm.
Two-Tailed Z Test Solution
H
0
:
H
a
:
o =
n =
Critical Value(s):

Test Statistic:
X - 372.5 368
Z = --------- = --------------- = 2.4
/ n 15/ 64
Decision:

Conclusion:

= 368
= 368
.05
64
Z 0 1.96 -1.96
.025
Reject H
0
Reject H
0
.025
Reject at o = .05
No evidence average
is 368
Two-Tailed Z Test Thinking
Challenge
Youre a Q/C inspector. You want to find out
if a new machine is making electrical cords to
customer specification: average breaking
strength of 70 lb. with o = 3.5 lb. You take a
sample of 36 cords & compute a sample
mean of 69.7 lb. At the .05 level of
significance, is there evidence that the
machine is not meeting the average breaking
strength?
Two-Tailed Z Test Solution*
H
0
:
H
a
:
o =
n =
Critical Value(s):

Test Statistic:
Decision:

Conclusion:

= 70
= 70
.05
36
Z 0 1.96 -1.96
.025
Reject H
0
Reject H
0
.025
69.7 70
.51
3.5
36
X
Z
n
o

= = =
Do not reject at o = .05
No evidence average
is not 70
One-Tailed Z Test
of Mean (o Known)
One-Tailed Z Test
for Mean (o Known)
1. Assumptions
If not normal, can be approximated by
normal distribution (n > 30)
2. Alternative hypothesis has < or > sign
3. Z-test Statistic
x
x
X X
Z
n

o
o

= =
One-Tailed Z Test
for Mean Hypotheses
H
0
: = 0 H
a
: < 0
Z
0
Reject H
0
o
Must be significantly
below
Z
0
o
Reject H
0
H
0
: = 0 H
a
: > 0
Small values satisfy H
0
.
Dont reject!
.500
- .025
.475

Z 0
o
= 1
One-Tailed Z Test
Finding Critical Z
What Is Z given o = .025?
o = .025

1.96
Z .05 .07
1.6 .4505 .4515 .4525
1.7 .4599 .4608 .4616
1.8 .4678 .4686 .4693
.4744 .4756
.06
1.9 .4750
Standardized Normal
Probability Table (Portion)

One-Tailed Z Test
Example
contain more than 368 grams of
cereal? A random sample of 64
boxes showed x = 372.5. The
company has specified o to be 15
grams. Test at the .05 level of
significance.
368 gm.
One-Tailed Z Test Solution
H0:
Ha:
o =
n =
Critical Value(s):

Test Statistic:
X - 372.5 368
Z = --------- = ---------------
/ n 15/ 64
= 2.4
Decision:

Conclusion:

= 368
> 368
.05
64
Z 0 1.645
.05
Reject
Reject at o = .05
No evidence average is 368
One-Tailed Z Test Thinking
Challenge
Youre an analyst for Ford. You want to
find out if the average miles per gallon
of Escorts is at least 32 mpg. Similar
models have a standard deviation of 3.8
mpg. You take a sample of 60 Escorts &
compute a sample mean of 30.7 mpg. At
the .01 level of significance, is there
evidence that the miles per gallon is at
least 32?
One-Tailed Z Test Solution*
H0:
Ha:
o =
n =
Critical Value(s):

Test Statistic:
Decision:

Conclusion:

= 32
< 32
.01
60
Z 0 -2.33
.01
Reject
30.7 32
2.65
3.8
60
X
Z
n
o

= = =
Reject at o = .01
There is evidence average
is less than 32
Two-Tailed t Test
of Mean (o Unknown)
One
Population
Z Test
(1 & 2
tail)
t Test
(1 & 2
tail)
Z Test
(1 & 2
tail)
_
2
Test
(1 & 2
tail)
t Test for Mean
(o Unknown)
1. Assumptions
If not normal, only slightly skewed & large
sample (n > 30) taken
2. Parametric test procedure
3. t test statistic
X
t
S
n

=
t
0
Two-Tailed t Test
Finding Critical t Values
Given: n = 3; o = .10
o /2 = .05
o /2 = .05

df = n - 1 = 2
v t
.10
t
.05
t
.025
1 3.078 6.314
12.706
2 1.886 2.920 4.303
3 1.638 2.353 3.182
Critical Values of t Table
(Portion)

2.920 -2.920

Two-Tailed t Test
Example
Does an average box of
cereal contain 368 grams of
cereal? A random sample
of 25 boxes had a mean of
372.5 and a standard
deviation of 12 grams. Test
at the .05 level of
significance.
368 gm.
Two-Tailed t Test
Solution
H0:
Ha:
o =
df =
Critical Value(s):

Test Statistic:
X 372.5 368
t = ------- = -------------- = 1.875
s/n 12/ 25
Decision:

Conclusion:

= 368
= 368
.05
25 - 1 = 24
t
0 2.064 -2.064
.025
Reject H
0
Reject H
0
.025
There is no evidence
population average is not
368
Two-Tailed t Test
Thinking Challenge
You work for the FTC. A
manufacturer of detergent claims
that the mean weight of detergent is
3.25 lb. You take a random sample of
16 containers. You calculate the
sample average to be 3.238 lb. with a
standard deviation of .117 lb. At the
.01 level of significance, is the
manufacturer correct?
3.25 lb.
Two-Tailed t Test
Solution*
H0:
Ha:
o =
df =
Critical Value(s):

Test Statistic:
X 3.238 3.25
t = -------- = ----------------
s/n 0.117/16
= -0.410
Decision:

Conclusion:

= 3.25
= 3.25
.01
16 - 1 = 15
t
0 2.947 -2.947
.005
Reject H
0
Reject H
0
.005
average is not 3.25
One-Tailed t Test
of Mean (o Unknown)
One-Tailed t Test
Example
Is the average capacity of
batteries at least 140 ampere-
hours? A random sample of 20
batteries had a mean of 138.47
and a standard deviation of
2.66. Assume a normal
distribution. Test at the .05
level of significance.
One-Tailed t Test
Solution
H0:
Ha:
o =
df =
Critical Value(s):

Test Statistic:
Decision:

Conclusion:

= 140
< 140
.05
20 - 1 = 19
t 0 -1.729
.05
Reject H
0
138.47 140
2.57
2.66
20
X
t
S
n

= = =
Reject at o = .05
There is evidence population
average is less than 140
One-Tailed t Test
Thinking Challenge
Youre a marketing analyst for Wal-
Mart. Wal-Mart had teddy bears on
sale last week. The weekly sales ($
00) of bears sold in 10 stores was:
8 11 0 4 7 8 10 5 8 3
At the .05 level of significance, is
there evidence that the average bear
sales per store is more than 5 ($
00)?
One-Tailed t Test
Solution*
H0:
Ha:
o =
df =
Critical Value(s):
Test Statistic:
Decision:

Conclusion:

= 5
> 5
.05
10 - 1 = 9
t
0 1.833
.05
Reject H
0
6.4 5
1.31
3.373
10
X
t
S
n

= = = +
average is more than 5
Observed Significance Levels: p-
Values
p-Value
1. Probability of obtaining a test statistic more extreme
(s or >) than actual sample value, given H
0
is true
2. Called observed level of significance
Smallest value of o for which H
0
can be rejected
3. Used to make rejection decision
If p-value > o, do not reject H
0

If p-value < o, reject H
0
Two-Tailed Z Test
p-Value Example
contain 368 grams of cereal? A
showed x = 372.5. The
company has specified o to be
15 grams. Find the p-Value.
368 gm.
Two-Tailed Z Test
p-Value Solution
Z
0 1.8
Z value of sample
statistic (observed)

X - 372.5 - 368
Z = ---------------- = --------------------- = 1.8
/ n 15/ 36
1/2 p-Value 1/2 p-Value
Two-Tailed Z Test
p-Value Solution
Z value of sample
statistic (observed)

p-value is P(Z s -1.80 or Z > 1.80)
Z
0 1.80 -1.80
From Z table:
lookup 1.50
.4641

.5000
- .4641
.0359

Two-Tailed Z Test
p-Value Solution
1/2 p-Value
.0359
1/2 p-Value
.0359
p-value is P(Z s -1.80 or Z > 1.80) = .0718
Z value of sample
statistic
From Z table:
lookup 1.50
.5000
- .4641
.0359

Z
0 1.80 -1.80
One-Tailed Z Test
p-Value Example
contain more than 368
grams of cereal? A random
sample of 36 boxes showed x
= 372.5. The company has
specified o to be 15 grams.
Find the p-Value.
368 gm.
One-Tailed Z Test
p-Value Solution
Z
0 1.80

Z value of sample
statistic
X - 372.5 - 368
Z = ---------------- = --------------------- = 1.8
/ n 15/ 36
One-Tailed Z Test
p-Value Solution
p-Value
.0359
Z value of sample
statistic
From Z table:
lookup 1.80
Use
alternative
hypothesis
to find
direction
.5000
- .4641
.0359

p-Value is P(Z > 1.80) = .0359

Z
0 1.80
.4641
Two-Tailed Z Test
p-Value Solution
0 1.80 -1.80
Z
Reject H
0
Reject H
0
1/2 p-Value = .0359 1/2 p-Value = .0359
1/2 o = .025 1/2 o = .025
(p-Value = .0718) > (o = .05).
Do not reject H
0
.
Test statistic is in Do not reject region
One-Tailed Z Test
p-Value Solution
Use
alternative
hypothesis
to find
direction
p-Value is P(Z > 1.80)
Z value of sample
statistic

p-Value
Z
0 1.80
From Z table:
lookup 1.80
.4641

.5000
- .4641
.0359

o = .05
One-Tailed Z Test
p-Value Solution
0 1.50
Z
p-Value = .0359
(p-Value = .0359) < (o = .05).
Do not Reject H
0
.
Test statistic is in Do not reject region
p-Value
Thinking Challenge
Youre an analyst for Ford. You want
to find out if the average miles per
gallon of Escorts is at least 32 mpg.
Similar models have a standard
deviation of 3.8 mpg. You take a
sample of 60 Escorts & compute a
sample mean of 30.7 mpg. What is the
value of the observed level of
significance (p-Value)?
Use
alternative
hypothesis
to find
direction

p-Value
Solution*
Z
0 -2.65
Z value of sample
statistic

From Z table:
lookup 2.65
.4960

p-Value
.004
.5000
- .4960
.0040

p-Value is P(Z s -2.65) = .004.
p-Value < (o = .01). Reject H
0
.
Z Test of Proportion
Data Types
Data
Quantitative Qualitative
Continuous Discrete
Qualitative Data
1. Qualitative random variables yield responses that
classify
e.g., Gender (male, female)
2. Measurement reflects number in category
3. Nominal or ordinal scale
4. Examples
Do you own savings bonds?
Do you live on-campus or off-campus?
Proportions
1. Involve qualitative variables
2. Fraction or percentage of population in a
category
3. If two qualitative outcomes, binomial
distribution
Possess or dont possess characteristic
4. Sample Proportion (p)
number of successes
sample size
x
p
n
= =
^
of Proportion
1. Approximated by Normal
Distribution

Excludes 0 or n
2. Mean

3. Standard Error

n
p p
p
) 1 (
0 0

= o
P
p =
where p
0
= Population Proportion
.0
.1
.2
.3
.0 .2 .4 .6 .8 1.0
P
^
P(P
^
)
( )
p p n p n

Z
= 0
o
z
= 1
Z
Standardizing Sampling
Distribution of Proportion
Sampling
Distribution
Standardized Normal
Distribution
o
P
^

P
P
^
^
Z
p p p
p p
n
^
p
p
^
^
~

=

o
( ) 1
^
0
0 0
One
Population
Z Test
(1 & 2
tail)
t Test
(1 & 2
tail)
Z Test
(1 & 2
tail)
_
2
Test
(1 & 2
tail)
One-Sample Z Test
for Proportion
1. Assumptions
Random sample selected from a binomial
population
Normal approximation can be used if
0 0

15 and 15 np nq > >
2. Z-test statistic for proportion
0
0 0
p p
Z
p q
n
~
Hypothesized population
proportion
One-Proportion Z Test
Example
The present packaging system
produces 10% defective cereal
boxes. Using a new system, a
had 11 defects. Does the new
system produce fewer defects?
Test at the .05 level of
significance.
One-Proportion Z Test Solution
H0:
Ha:
o =
n =
Critical Value(s):

Test Statistic:
Decision:

Conclusion:

p = .10
p < .10
.05
200
Z 0 -1.645
.05
Reject H
0
0
0 0
11
.10
200
2.12
.10 .90
200
p p
Z
p q
n
~ = =
Reject at o = .05
There is evidence new
system < 10% defective
One-Proportion Z Test Thinking
Challenge
Youre an accounting manager. A
year-end audit showed 4% of
transactions had errors. You
implement new procedures. A
random sample of 500 transactions
had 25 errors. Has the proportion
of incorrect transactions changed
at the .05 level of significance?
One-Proportion Z Test Solution*
H0:
Ha:
o =
n =
Critical Value(s):

Test Statistic:
Decision:

Conclusion:

p = .04
p = .04
.05
500
Z 0 1.96 -1.96
.025
Reject H
0
Reject H
0
.025
0
0 0
25
.04
500
1.14
.04 .96
500
p p
Z
p q
n
~ = =

There is evidence
proportion is not 4%
Chi-Square (_
2
) Test
of Variance
One
Population
Z Test
(1 & 2
tail)
t Test
(1 & 2
tail)
Z Test
(1 & 2
tail)
_
2
Test
(1 & 2
tail)
Chi-Square (_
2
) Test
for Variance
1. Tests one population variance or standard
deviation
2. Assumes population is approximately normally
distributed
3. Null hypothesis is H
0
: o
2
= o
0
2
4. Test statistic
Hypothesized pop. variance
Sample variance
_
o
2
2
2
1)
=
(n S
0
Chi-Square (_
2
) Distribution
Select simple random
sample, size n.
Compute s
2
Compute
_
2
=

(n-1)s
2
/
o
2
Astronomical number
of
_
2
values
Population
Sampling Distributions
for Different Sample
Sizes

o
_
2
1 2 3 0
What is the critical _
2
value given
H
a
: o
2
> 0.7
n = 3
o =.05?
Finding Critical Value Example
_
2
0
Upper Tail Area
DF .995 .95 .05
1 ... 0.004 3.841
2 0.010 0.103 5.991
_
2
Table
(Portion)
df = n - 1 = 2
5.991
Reject
o = .05
2
value given:
H
a
: o
2
< 0.7
n = 3
o =.05?
What do you do
if the rejection
region is on the
left?

2
value given:
H
a
: o
2
< 0.7
n = 3
o =.05?
.103
_
2
0
Upper Tail Area
DF .995 .95 .05
1 ... 0.004 3.841
2 0.010 0.103 5.991
_
2
Table
(Portion)
Upper Tail Area
for Lower Critical
Value = 1-.05 = .95
o = .05
Reject H
0
df = n - 1 = 2
Chi-Square (_
2
) Test Example
Is the variation in boxes of
cereal, measured by the
variance, equal to 15 grams?
A random sample of 25 boxes
had a standard deviation of
17.7 grams. Test at the .05
level of significance.
Chi-Square (_
2
) Test
Solution
H0:
Ha:
o =
df =
Critical Value(s):

Test Statistic:
Decision:

Conclusion:

o
2
= 15
o
2
= 15
.05
25 - 1 = 24
_
2
0
o /2 = .025
39.364 12.401
= 33.42
2 2
2
2 2
0
( 1) (25 1) 17.7
15
n S
_
o

= =
o
2
is not 15

CH 4 - Estimation & Hypothesis One Sample

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CH 4 - Estimation & Hypothesis One Sample

Uploaded by

Copyright:

Available Formats

Chapter 5a

Inferences Based on a Single Sample:

Do not reject at o = .05

You might also like