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POPULATION

PARAMETER

Mean | Variance | Proportion

Hypothesis testingrefers to the formal procedures used

by statisticians to accept or reject statistical hypotheses.

The best way to determine whether a statistical

hypothesis is true would be to examine the entire

population. Since that is often impractical, researchers

typically examine a random sample from the population.

If sample data are not consistent with the statistical

hypothesis, the hypothesis is rejected.

Null hypothesis. The null hypothesis, denoted by H 0, is

usually the hypothesis that sample observations result

purely

from

chance.

denoted by H1or Ha, is the hypothesis that sample

observations are influenced by some non-random cause.

Hypothesis Tests

A formal process to determine whether to reject a null hypothesis, based

on sample data. This process, calledhypothesis testing, consists of

four steps.

State the hypotheses. This involves stating the null and alternative

hypotheses. The hypotheses are stated in such a way that they are

mutually exclusive. That is, if one is true, the other must be false.

Formulate an analysis plan. The analysis plan describes how to use

sample data to evaluate the null hypothesis. The evaluation often

focuses around a single test statistic.

Analyze sample data. Find the value of the test statistic (mean score,

proportion, t-score, z-score, etc.) described in the analysis plan.

Interpret results. Apply the decision rule described in the analysis

plan. If the value of the test statistic is unlikely, based on the null

hypothesis, reject the null hypothesis.

Significance level. Often, researchers choose

significant levelsequal to 0.01, 0.05, or 0.10; but

any value between 0 and 1 can be used.

Test method. Typically, the test method involves a

test statistic and a sampling distribution. Computed

from sample data, the test statistic might be a mean

score, proportion, difference between means,

difference between proportions, z-score, t-score, chisquare, etc. Given a test statistic and its sampling

distribution, a researcher can assess probabilities

associated with the test statistic. If the test statistic

probability is less than the significance level, the null

hypothesis is rejected.

Test statistic. When the null hypothesis involves a mean or proportion, use

either of the following equations to compute the test statistic.

Test statistic = (Statistic - Parameter) / (Standard deviation of statistic)

Test statistic = (Statistic - Parameter) / (Standard error of statistic)

whereParameteris the value appearing in the null hypothesis, andStatisticis

the point estimateofParameter. As part of the analysis, you may need to

compute the standard deviation or standard error of the statistic. Previously,

we presented common formulas for the standard deviation and standard error.

When the parameter in the null hypothesis involves categorical data, you may

use a chi-square statistic as the test statistic. Instructions for computing a chisquare test statistic are presented in the lesson on the chi-square goodness of

fit test.

extreme as the test statistic, assuming the null hypotheis is true.

Decision Errors

Type I error. A Type I error occurs when the researcher

rejects a null hypothesis when it is true. The probability

of committing a Type I error is called thesignificance

level. This probability is also calledalpha, and is often

denoted by .

Type II error. A Type II error occurs when the researcher

fails to reject a null hypothesis that is false. The

probability of committing a Type II error is calledBeta,

and is often denoted by . The probability

ofnotcommitting a Type II error is called thePowerof

the test.

Decision Rules

P-value. The strength of evidence in support of a null

hypothesis is measured by theP-value.

Region of acceptance. Theregion of acceptanceis a

range of values. If the test statistic falls within the region

of acceptance, the null hypothesis is not rejected. The

region of acceptance is defined so that the chance of

making a Type I error is equal to the significance level.

The set of values outside the region of acceptance is called

theregion of rejection. If the test statistic falls within the

region of rejection, the null hypothesis is rejected. In such

cases, we say that the hypothesis has been rejected at the

level of significance.

A test of a statistical hypothesis, where the region of

rejection is on only one side of the sampling

distribution, is called aone-tailed test.

rejection is on both sides of the sampling distribution, is

called atwo-tailed test.

The probability ofnotcommitting a Type II erroris called

thepowerof a hypothesis test.

Effect Size

To compute the power of the test, one offers an

alternative view about the "true" value of the population

parameter, assuming that the null hypothesis is false.

Theeffect sizeis the difference between the true value

and the value specified in the null hypothesis.

Effect size = True value - Hypothesized value

Sample size (n). Other things being equal, the greater the

sample size, the greater the power of the test.

Significance level (). The higher the significance level, the

higher the power of the test. If you increase the significance

level, you reduce the region of acceptance. As a result, you are

more likely to reject the null hypothesis. This means you are less

likely to accept the null hypothesis when it is false; i.e., less likely

to make a Type II error. Hence, the power of the test is increased.

The "true" value of the parameter being tested. The greater

the difference between the "true" value of a parameter and the

value specified in the null hypothesis, the greater the power of

the test. That is, the greater the effect size, the greater the power

of the test.

Testing Procedure

Proportions

Difference between proportions

Regression slope

Means

Difference between means

Difference between matched pairs

Goodness of fit

Homogeneity

Independence

How to conduct a hypothesis test of a proportion, when the following

conditions are met:

The sampling method is simple random sampling.

Each sample point can result in just two possible outcomes. We call

one of these outcomes a success and the other, a failure.

The sample includes at least 10 successes and 10 failures.

The population size is at least 20 times as big as the sample size.

This approach consists of four steps: (1) state the hypotheses, (2)

formulate an analysis plan, (3) analyze sample data, and (4)

interpret results.

Every hypothesis test requires the analyst to state anull

hypothesisand analternative hypothesis. The hypotheses

are stated in such a way that they are mutually exclusive.

That is, if one is true, the other must be false; and vice

versa.

Formulate an Analysis Plan

The analysis plan describes how to use sample data to

accept or reject the null hypothesis. It should specify the

following elements.

Significance level. Often, researchers choosesignificance

levelsequal to 0.01, 0.05, or 0.10; but any value between 0 and 1

can

be

used.

Test method. Use theone-sample z-testto determine whether the

hypothesized population proportion differs significantly from the

observed sample proportion.

Using sample data, find the test statistic and its associated P-Value.

Standard deviation. Compute thestandard deviation() of the sampling

distribution.

= sqrt[ P * ( 1 - P ) / n ]

where P is the hypothesized value of population proportion in the null hypothesis,

and n is the sample size.

Test statistic. The test statistic is a z-score (z) defined by the following equation.

z = (p - P) /

where P is the hypothesized value of population proportion in the null hypothesis, p

is the sample proportion, and is the standard deviation of the sampling

distribution.

the test statistic. Since the test statistic is a z-score, use theNormal Distribution

Calculatorto assess the probability associated with the z-score. (See sample

problems at the end of this lesson for examples of how this is done.)

Interpret Results

If the sample findings are unlikely, given the null hypothesis, the researcher rejects

the null hypothesis. Typically, this involves comparing the P-value to thesignificance

level, and rejecting the null hypothesis when the P-value is less than the significance

level.

How to conduct a hypothesis test of a mean, when the following conditions are

met:

The sampling method is simple random sampling.

The sampling distribution is normal or nearly normal.

Generally, the sampling distribution will be approximately normally distributed if

any of the following conditions apply.

The population distribution is normal.

The population distribution is symmetric, unimodal, without outliers, and the

sample size is 15 or less.

The population distribution is moderately skewed, unimodal, without outliers, and

the sample size is between 16 and 40.

The sample size is greater than 40, without outliers.

This approach consists of four steps: (1) state the hypotheses, (2) formulate an

analysis plan, (3) analyze sample data, and (4) interpret results.

Every hypothesis test requires the analyst to state a null hypothesis and an

alternative hypothesis. The hypotheses are stated in such a way that they are

mutually exclusive. That is, if one is true, the other must be false; and vice versa.

The table below shows three sets of hypotheses. Each makes a statement about how

the population mean is related to a specified value M. (In the table, the symbol

means " not equal to ".)

Set

Null hypothesis Alternative hypothesis

1 = M M2

2 > M < M1

3 < M > M1

Number of tails

extreme value on either side of the sampling distribution would cause a researcher to

reject the null hypothesis. The other two sets of hypotheses (Sets 2 and 3) are onetailed tests, since an extreme value on only one side of the sampling distribution

would cause a researcher to reject the null hypothesis.

The analysis plan describes how to use sample data to

accept or reject the null hypothesis. It should specify the

following elements.

Significance level. Often, researchers choose

significance levels equal to 0.01, 0.05, or 0.10; but any

value between 0 and 1 can be used.

Test method. Use the one-sample t-test to determine

whether the hypothesized mean differs significantly

from the observed sample mean.

Using sample data, conduct a one-sample t-test. This involves finding the standard error,

degrees of freedom, test statistic, and the P-value associated with the test statistic.

Standard error. Compute the standard error (SE) of the sampling distribution.

SE = s * sqrt{ ( 1/n ) * [ ( N - n ) / ( N - 1 ) ] }

wheresis the standard deviation of the sample, N is the population size, andnis the

sample size. When the population size is much larger (at least 20 times larger) than the

sample size, the standard error can be approximated by:SE = s / sqrt( n )

Degrees of freedom. The degrees of freedom (DF) is equal to the sample size (n) minus one.

Thus,

DF

=

n

1.

Test statistic. The test statistic is a t-score (t) defined by the following equation.

t = (x- ) / SE

wherexis the sample mean, is the hypothesized population mean in the null hypothesis,

and SE is the standard error.

P-value. The P-value is the probability of observing a sample statistic as extreme as the test

statistic. Since the test statistic is a t-score, use the t Distribution Calculatorto assess the

probability associated with the t-score, given the degrees of freedom computed above.

Interpret Results

If the sample findings are unlikely, given the null

hypothesis, the researcher rejects the null hypothesis.

Typically, this involves comparing the P-value to the

significance level, and rejecting the null hypothesis when

the P-value is less than the significance level.

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