Hypothesis Testing

1
 Learning Objective

1. Solve Hypothesis Testing Problems

 Mean

2
 Statistical Methods

Statistical
Methods

Descriptive Inferential
Statistics Statistics

Hypothesis
Estimation
Testing

3
 Hypothesis Testing
Process
I Believe the
Population
Mean Age is 50.
(Hypothesis) Population
The Sample
IsX = 20 ≅ Mean Is 20
µ X = 50? No!

REJECT

Hypothesis Sample

4
 Hypothesis Testing
Steps
1. State H0 6. Set Up Critical Values

2. State H1 7. Collect Data

3. Choose α 8. Compute Test Statistic

4. Choose n 9. Make Statistical

Decision
5. Choose
Test 10. Express Decision

5
 One Population Tests
Numerical Data
One
Population

Random-
Mean Median Variance
σx σx ness
Known Unknown

Signed
Runs
Z Test t Test Ranks χ Test
2

Test Test

6
 t Test
for Mean (σX Unknown)
1. Assumptions
 Population Is Normally Distributed
 If Not Normal, Only Slightly Skewed &

Large Sample (n ≥ 30) Taken

2. Parametric Test Procedure
3. t Test Statistic
X − µx
t=
S
n 7
 Two-Tailed t Test
Example

Does an average box of

cereal contain 368
grams of cereal? A
random sample of 36
boxes had a mean of
372.5 & a standard
deviation of 12 grams.
Test at the .05 level. 368 gm.

8
 Two-Tailed t Test
Solution
H0: µX = 368 Test Statistic:
H1: µX ≠ 368 X − µ x 372.5 − 368
t= = = +2.25
α = .05 S 12
df = 36 - 1 = 35 n 36
Critical Value(s): Decision:
Reject H0 Reject H0
Reject at α = .05
.025 .025
Conclusion:
There is Evidence Pop.
-2.0301 0 2.0301 t Average Is Not 368
9
 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 64
containers. You calculate the
sample average to be 3.238
lb. with a standard deviation of
.117 lb. At the .01 level, is the 3.25 lb.
manufacturer correct?
10
 Solution Template

H0: Test Statistic:

H1:
α=
df =
Critical Value(s):
Decision:

Conclusion:
0 t
11
 Two-Tailed t Test
Solution*
H0: µX = 3.25 Test Statistic:
H1: µX ≠ 3.25 X − µ x 3.238 − 3.25
t= = = −.82
α = .01 S .117
df = 64 - 1 = 63 n 64
Critical Value(s): Decision:
Reject H0 Reject H0
Do Not Reject at α = .01
.005 .005
Conclusion:
There is No Evidence
-2.6561 0 2.6561 t Average Is Not 3.25
12
 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 &
a standard deviation of
2.66. Assume a normal
distribution. Test at the
.05 level.

13
 One-Tailed t Test
Solution
H0: µX ≥ 140 Test Statistic:
H1: µX < 140 X − µ x 138.47 − 140
t= = = −2.57
α = .05 S 2.66
df = 20 - 1 = 19 n 20
Critical Value(s): Decision:
Reject Reject at α = .05
.05
Conclusion:
There Is Evidence Pop.
-1.7291 0 t Average Is Less than 140
14
 One-Tailed t Test
Thinking Challenge
You’re 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, is there
evidence that the average
bear sales per store is more
than 5 ($ 00)?
15
 Solution Template

H0: Test Statistic:

H1:
α=
df =
Critical Value(s):
Decision:

Conclusion:
0 t
16
 One-Tailed t Test
Solution*
H0: µX ≤ 5 Test Statistic:
H1: µX > 5 X − µ x 6.4 − 5
t= = = +131
.
α = .05 S 3.373
df = 10 - 1 = 9 n 10
Critical Value(s): Decision:
Reject Do Not Reject at α = .05
.05
Conclusion:
There Is No Evidence
0 1.8331 t Average Is More than 5
17