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Microsoft Excel
7th Edition
Chapter 9
Fundamentals of Hypothesis
Testing: One-Sample Tests
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-1
Learning Objectives
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-2
What is a Hypothesis?
DCOVA
A hypothesis is a claim
(assertion) about a
population parameter:
population mean
Example: The mean monthly cell phone bill
in this city is μ = $42
population proportion
Example: The proportion of adults in this
city with cell phones is π = 0.68
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-3
The Null Hypothesis, H0
DCOVA
States the claim or assertion to be tested
Example: The mean diameter of a manufactured
bolt is 30mm ( H 0 : μ 30)
H 0 : μ 30 H0 : X 30
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-4
The Null Hypothesis, H0
DCOVA
(continued)
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-5
The Alternative Hypothesis, H1
DCOVA
Is the opposite of the null hypothesis
e.g., The average diameter of a manufactured
bolt is not equal to 30mm ( H1: μ ≠ 30 )
Challenges the status quo
Never contains the “=“, or “≤”, or “≥” sign
May or may not be proven
Is generally the hypothesis that the
researcher is trying to prove
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-6
The Hypothesis Testing
Process
DCOVA
Claim: The population mean age is 50.
H0: μ = 50, H1: μ ≠ 50
Sample the population and find sample mean.
Population
Sample
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-7
The Hypothesis Testing
Process DCOVA
(continued)
Suppose the sample mean age was X = 20.
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-8
The Hypothesis Testing
Process DCOVA
(continued)
Sampling
Distribution of X
X
20 μ = 50
If H0 is true ... then you reject
If it is unlikely that you
the null hypothesis
would get a sample
that μ = 50.
mean of this value ... ... When in fact this were
the population mean…
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-9
The Test Statistic and
Critical Values
DCOVA
If the sample mean is close to the stated
population mean, the null hypothesis is not
rejected.
If the sample mean is far from the stated
population mean, the null hypothesis is rejected.
How far is “far enough” to reject H0?
The critical value of a test statistic creates a “line in
the sand” for decision making -- it answers the
question of how far is far enough.
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-10
The Test Statistic and
Critical Values DCOVA
Sampling Distribution of the test statistic
Region of Region of
Rejection Rejection
Region of
Non-Rejection
Critical Values
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-11
Possible Errors in Hypothesis Test
Decision Making
DCOVA
Type I Error
Reject a true null hypothesis
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-12
Possible Errors in Hypothesis Test
Decision Making DCOVA
(continued)
Actual Situation
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-13
Possible Errors in Hypothesis Test
Decision Making DCOVA
(continued)
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-14
Type I & II Error Relationship
DCOVA
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-15
Factors Affecting Type II Error
DCOVA
All else equal,
β when the difference between
hypothesized parameter and its true value
β when
β when σ
β when n
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-16
Level of Significance
and the Rejection Region
DCOVA
H0: μ = 30 Level of significance =
H1: μ ≠ 30
/2 /2
30
Critical values
Rejection Region
Hypothesis
Tests for
Known Unknown
(Z test) (t test)
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-18
Z Test of Hypothesis for the
Mean (σ Known)
DCOVA
Convert sample statistic ( X ) to a ZSTAT test statistic
Hypothesis
Tests for
σKnown
Known σUnknown
Unknown
(Z test) (t test)
The test statistic is:
X μ
ZSTAT
σ
n
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 9-19
Critical Value
Approach to Testing
DCOVA
For a two-tail test for the mean, σ known:
Convert sample statistic ( X ) to test statistic
(ZSTAT)
Determine the critical Z values for a specified
level of significance from a table or
computer
Decision Rule: If the test statistic falls in the
rejection region, reject H0 ; otherwise do not
reject H0
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-20
Two-Tail Tests
DCOVA
H0: μ = 30
There are two
H1: μ 30
cutoff values
(critical values),
defining the
regions of /2 /2
rejection
30 X
Reject H0 Do not reject H0 Reject H0
-Zα/2 0 +Zα/2 Z
Lower Upper
critical critical
value value
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-21
6 Steps in
Hypothesis Testing
DCOVA
1. State the null hypothesis, H0 and the
alternative hypothesis, H1
2. Choose the level of significance, , and the
sample size, n
3. Determine the appropriate test statistic and
sampling distribution
4. Determine the critical values that divide the
rejection and nonrejection regions
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-22
6 Steps in
Hypothesis Testing DCOVA
(continued)
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-23
Hypothesis Testing Example
DCOVA
Test the claim that the true mean diameter
of a manufactured bolt is 30mm.
(Assume σ = 0.8)
1. State the appropriate null and alternative
hypotheses
H0: μ = 30 H1: μ ≠ 30 (This is a two-tail test)
2. Specify the desired level of significance and the
sample size
Suppose that = 0.05 and n = 100 are chosen
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-24
Hypothesis Testing Example
DCOVA
(continued)
= 0.05/2 = 0.05/2
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-28
p-Value Approach to Testing:
Interpreting the p-value
DCOVA
Compare the p-value with
If p-value < , reject H0
If p-value , do not reject H0
Remember
If the p-value is low then H0 must go
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-29
The 5 Step p-value approach to
Hypothesis Testing
DCOVA
1. State the null hypothesis, H0 and the alternative
hypothesis, H1
2. Choose the level of significance, , and the sample size, n
4. Collect data and compute the value of the test statistic and
the p-value
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-31
p-value Hypothesis Testing
Example DCOVA
(continued)
X μ 29.84 30 0.16
Z STAT 2.0
σ 0.8 0.08
n 100
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-32
p-Value Hypothesis Testing Example:
Calculating the p-value
DCOVA
4. (continued) Calculate the p-value.
How likely is it to get a ZSTAT of -2 (or something further from the
mean (0), in either direction) if H0 is true?
0 Z
-2.0 2.0
p-value = 0.0228 + 0.0228 = 0.0456
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-33
p-value Hypothesis Testing
Example DCOVA
(continued)
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-34
Connection Between Two Tail Tests
and Confidence Intervals
DCOVA
For X = 29.84, σ = 0.8 and n = 100, the 95%
confidence interval is:
0.8 0.8
29.84 - (1.96) to 29.84 (1.96)
100 100
29.6832 ≤ μ ≤ 29.9968
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Do You Ever Truly Know σ?
DCOVA
Probably not!
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-36
Hypothesis Testing:
σ Unknown
DCOVA
If the population standard deviation is unknown, you
instead use the sample standard deviation S.
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-37
t Test of Hypothesis for the Mean
(σ Unknown)
DCOVA
Convert sample statistic ( X ) to a tSTAT test statistic
Hypothesis
Tests for
σKnown
Known σUnknown
Unknown
(Z test) (t test)
The test statistic is:
X μ
t STAT
S
n
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 9-38
Example: Two-Tail Test
( Unknown)
DCOVA
The average cost of a hotel
room in New York is said to
be $168 per night. To
determine if this is true, a
random sample of 25 hotels
is taken and resulted in an X
of $172.50 and an S of H0: μ = 168
$15.40. Test the appropriate H1: μ 168
hypotheses at = 0.05.
(Assume the population distribution is normal)
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-39
Example Solution:
Two-Tail t Test
DCOVA
Data
Null Hypothesis µ= $ 168.00
Level of Significance 0.05
Sample Size 25
Sample Mean $ 172.50
Sample Standard Deviation $ 15.40
Intermediate Calculations
Standard Error of the Mean $ 3.08 =B8/SQRT(B6)
Degrees of Freedom 24 =B6-1
t test statistic 1.46 =(B7-B4)/B11
Two-Tail Test
p-value > α Lower Critical Value
Upper Critical Value
-2.0639 =-TINV(B5,B12)
2.0639 =TINV(B5,B12)
So do not reject H0 p-value 0.157 =TDIST(ABS(B13),B12,2)
Do Not Reject Null Hypothesis =IF(B18<B5, "Reject null hypothesis",
"Do not reject null hypothesis")
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-41
Connection of Two Tail Tests to
Confidence Intervals DCOVA
For X = 172.5, S = 15.40 and n = 25, the 95%
confidence interval for µ is:
166.14 ≤ μ ≤ 178.86
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
One-Tail Tests
DCOVA
In many cases, the alternative hypothesis
focuses on a particular direction
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-43
Lower-Tail Tests
DCOVA
H0: μ ≥ 3
There is only one H1: μ < 3
critical value, since
the rejection area is
in only one tail
μ X
Critical value
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-44
Upper-Tail Tests
DCOVA
H0: μ ≤ 3
There is only one
critical value, since H1: μ > 3
the rejection area is
in only one tail
Critical value
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-45
Example: Upper-Tail t Test
for Mean ( unknown)
DCOVA
A phone industry manager thinks that
customer monthly cell phone bills have
increased, and now average over $52 per
month. The company wishes to test this
claim. (Assume a normal population)
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-46
Example: Find Rejection Region
DCOVA
(continued)
Suppose that = 0.10 is chosen for this test and
n = 25.
Find the rejection region: Reject H0
= 0.10
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-47
Example: Test Statistic
DCOVA
(continued)
Xμ 53.1 52
t STAT 0.55
S 10
n 25
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-48
Example: Decision DCOVA
(continued)
Reach a decision and interpret the result:
Reject H0
= 0.10
Reject H0
= .10
0
Do not reject Reject
H0 1.318 H0
tSTAT = .55
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-50
Excel Spreadsheet Calculating The
p-value for An Upper Tail t Test
DCOVA
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-51
Hypothesis Tests for Proportions
DCOVA
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-52
Proportions DCOVA
(continued)
Sample proportion in the category of interest is
denoted by p
The sampling
distribution of p is Hypothesis
approximately Tests for p
normal, so the test
statistic is a ZSTAT
value: nπ 5 nπ < 5
pπ and or
ZSTAT n(1-π) 5 n(1-π) < 5
π (1 π )
Not discussed
n in this chapter
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-54
Z Test for Proportion in Terms of
Number in Category of Interest
DCOVA
An equivalent form
to the last slide, Hypothesis
but in terms of the Tests for X
number in the
category of
interest, X: X5 X<5
and or
n-X 5 n-X < 5
X n
ZSTAT
n (1 )
Not discussed
in this chapter
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-55
Example: Z Test for Proportion
DCOVA
A marketing company
claims that it receives
8% responses from its
mailing. To test this
claim, a random sample
of 500 were surveyed
Check:
with 25 responses. Test
at the = 0.05 n π = (500)(.08) = 40
significance level. n(1-π) = (500)(.92) = 460
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-56
Z Test for Proportion: Solution
DCOVA
H0: π = 0.08 Test Statistic:
H1: π 0.08 p π .05 .08
ZSTAT 2.47
π (1 π ) .08(1 .08)
= 0.05
n 500
n = 500, p = 0.05
Critical Values: ± 1.96 Decision:
Reject Reject Reject H0 at = 0.05
Conclusion:
.025 .025
There is sufficient
-1.96 0 1.96 z evidence to reject the
-2.47 company’s claim of 8%
response rate.
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc. Chap 9-57
p-Value Solution
DCOVA
(continued)
Calculate the p-value and compare to
(For a two-tail test the p-value is always two-tail)
Do not reject H0
Reject H0 Reject H0 p-value = 0.0136:
/2 = .025 /2 = .025
P(Z 2.47) P(Z 2.47)
0.0068 0.0068
2(0.0068) 0.0136
-1.96 0 1.96
Z = -2.47 Z = 2.47
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-60
Reporting Findings & Ethical
Issues
Should document & report both good & bad results
Should not only report statistically significant results
Reports should distinguish between poor research
methodology and unethical behavior
Ethical issues can arise in:
The use of human subjects
The data collection method
The type of test being used
The level of significance being used
The cleansing and discarding of data
The failure to report pertinent findings
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-61
The Power Of A Test Is An
Important Part Of Planning
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Chap 9-64
Statistics for Managers Using
Microsoft Excel
7th Edition
Online Topic
Power of a Test
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Power Of A HT-1
The Power of a Test
DCOVA
The power of the test is the probability of
correctly rejecting a false H0
Power
= 1-β
50 52
Reject Do not reject
H0: μ 52 H0 : μ 52
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Power Of A HT - 2
Type II Error
DCOVA
Suppose we do not reject H0: 52 when in fact
the true mean is = 50
This is the range of X where
This is the true H0 is not rejected
distribution of X if = 50
Prob. of type II
error = β
50 52
Reject Do not reject
H0: 52 H0 : 52
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Power Of A HT - 3
Type II Error DCOVA
(continued)
Here, β = P( X cutoff ) if μ = 50
β
50 52
Reject Do not reject
H0: μ 52 H0 : μ 52
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Power Of A HT - 4
Calculating β
DCOVA
Suppose n = 64 , σ = 6 , and = .05
σ 6
cutoff X μ Z 52 1.645 50.766
(for H0 : μ 52) n 64
So β = P( x 50.766 ) if μ = 50
50 50.766 52
Reject Do not reject
H0: μ 52 H0 : μ 52
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Power Of A HT - 5
Calculating β and
Power of the test DCOVA
(continued)
Power Probability of
=1-β type II error:
= 0.8461
β = 0.1539
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Power Of A HT - 7
Online Topic Summary
Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.
Power Of A HT - 8
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Statistics for Managers Using Microsoft Excel® 7e Copyright ©2014 Pearson Education, Inc.