Chapter 9

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Elements of a Test of Hypothesis • 1. Null Hypothesis • 2. Alternative Hypothesis • 3. Test Statistic • 4. Rejection Region • 5. Assumptions • 6. Sample and Calculate Test Statistic • 7. Conclusion Steps for Selecting the Null and Alternative Hypotheses 1. Select the alternative hypothesis - 3 types: One-tailed, upper tail H a : μ > 2400 One-tailed, lower tail H a : μ < 2400 Two-tailed H a : μ ≠ 2400 2. Select the null hypothesis as the status quo, which will be presumed true unless the sample evidence conclusively establishes the alternative hypothesis: H o : μ = 2400 Large-Sample Test of Hypothesis about a Mean • Use the z-statistic. • Example - A farmer hypothesizes that the mean yield of soybeans per acre is greater than 520 bushels. A sample of 36 1-acre plots results in a sample mean value of 543 with a standard deviation of 124. At a .025 level, can we conclude that the mean yield is above 520? Small-Sample Test of Hypothesis about a Mean • If n is small, we cannot assume that the sample standard deviation will provide a good approximation of the population standard deviation. We must use the t-distribution rather than the z-distribution to make inferences about the population mean. • Test Statistic: t = x − μ 0 s n 4
Example • A tire company guarantees that a particular tire has a mean useful lifetime of 42,000 miles or more. A consumer testing agency, wishing to verify this claim, observed n=10 tires on a test wheel that simulated normal road conditions. The lifetimes (in thousands of miles) were as follows: 42, 36, 46, 43, 41, 35, 43, 45, 40, 39. Use these data to determine whether there is sufficient evidence to contradict the manufacturers claim at the .05 level. P-Values • For all the hypothesis testing examples so far, the value of α and thus the rejection region are selected prior to conducting the test. • A second method is to report the extent to which the statistic disagrees with the null hypothesis and letting the reader decide whether to reject the null hypothesis. This measure of disagreement is called the p-value. Steps for Calculating the p- value • Choose the maximum level of a you are willing to tolerate. • Determine the value of the test statistic z from the sample data. Look up the z-statistic and find the corresponding probability: – One-tailed test - the p-value = tail area beyond z in the same direction as the alternative hypothesis. – Two-tailed test - the p-value= 2 times the tail area beyond the z value in the direction of the sign of z. • Reject the null hypothesis if the observed p-value is less than α. Example • According to a national survey, the price of a new family home averages $115,000. You hypothesize that the average price in your city exceeds the national average. To test your belief, you record the prices of 20 new homes in your city and find the sample mean to equal $120,000 with a sample standard deviation of $30,000. If α =.05, does the data support your belief? What is the p-value? What would be the result if the sample was 100 homes with the same mean and standard deviation above? What is the p-value? 5
Page 1 and 2: Hypothesis Testing Hypothesis Testi
Page 3: Two Types of Errors: Type I Error
Page 7 and 8: The Relationship Between Confidence
Page 9: Paired Difference Method • The te

Chapter 9

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