Hypothesis Testing 1

Copyright by Winston S. Sirug, Ph.D.

Hypothesis Testing

➢ It is a statistical method that is used in

making statistical decisions using
experimental data.

➢ It is basically an assumption that we make

about the population parameter.
Hypothesis Testing

Hypothesis testing was introduced by

➢ Sir Ronald Fisher,
➢ Jerzy Newman

➢ Karl Pearson

➢ Egon Pearson (Karl Pearson’s son)

Hypothesis Testing

3 Methods to Test the Hypothesis

➢ traditional method
➢ p-value

➢ confidence interval
Two Types of Statistical Hypothesis

Null Hypotheses, symbolized by H0, is a

statistical hypothesis testing that assumes
that the observation is due to a chance
factor.

Alternative hypothesis, symbolized by H1 it

states that there is a difference between
two population means (or parameters)
Level of Significance

The level of significance refers to the degree

of significance in which we accept or reject
the null hypothesis.

Level of significance is the maximum

probability of committing a Type I error.

That is, P(Type I error) = α.

Level of Significance

The critical or rejection value is the range of

the values of the test value that indicates that
there is significant difference and that the null
hypothesis (H0) should be rejected.

noncritical or nonrejection region is the range

of the values of the test value that indicates
that the difference was probably due to
chance and that the null hypothesis (H0)
should not be rejected.
One Tailed versus Two Tailed

A one-tailed test shows that the H0 be

rejected when test value is in the critical
region on one side of the mean.

A two-tailed test, the H0 should be rejected

when the test value is in either of the two
critical regions.
Hypothesis and the Tails of the Test

Two-tailed Left-tailed Right-tailed

test test test
Signs in H0: μ = k H0: μ = k or H0: μ = k or
the H0 H0: μ  k H0: μ  k
Signs in H1: μ ≠ k H1: μ  k H1: μ  k
the H1
Rejection In both In the left In the right
Region tails tail tail
Critical Value Approach to Hypothesis Testing

Rejection
0.9500 Region
α = 0.05
Critical Values for
α = 0.05
0.5000 0.4500
(Right-tailed test)
0 z  Critical value
Nonrejection Region

0.9500
Critical Values for Rejection
α = 0.05 Region
(Left-tailed test) α = 0.05
0.4500 0.5000

Critical value → z 0
Nonrejection Region
Critical Value Approach to Hypothesis Testing

Testing the Hypothesis about the Mean (σ Known)

at 0.05 Significance Level
2.5% 95% 2.5%

–1.96 0 +1.96 z
Rejection Region Nonrejection Region Rejection Region

Critical X Critical X
value value
Possible Outcome of a Hypothesis Test

Statistical H0 True H0 False

Decision
Do not Correct decision Type II error
reject H0 Confidence = 1 – α P(Type II error) = β
Reject H0 Type I error Correct decision
P(Type I error) = α Power = 1 – β
Steps in Conducting Hypothesis Testing

 State the null hypothesis (H0) and the alternative

hypothesis (H1).

 Choose the level of significance, α, and the sample

size.
 Determine the test statistic & sampling distribution.

 Determine the critical values that divide the

rejection and nonrejection regions.

 Collect the data and compute the value of the test

statistic.
 Make a statistical decision.

 State the conclusion.

One Sample z Test

The one sample z test is a statistical test for the

mean of a population. It is used when n  30, or
when the population is normally distributed and
population standard deviation is known.

observed value − exp ected value

Test value =
s tan dard error

when  is known When  is unknown

X − X −
z= z=
/ n s/ n
Assumptions in One Sample z test

 Subjects are randomly selected.

 Population distribution is normal.

 The population should be known.

 Cases of the samples should be

independent.

 Sample size should be greater than or equal

to 30.
Procedure for One Sample z test

 Procedure for One Sample z test .

H0: μ = specified value
H1: μ , ,  specified value

 Calculate the sample mean for one sample z test .

 Calculate the value of the one sample z test

 Statistical decision for hypothesis testing

If zcomputed  zcritical, do not reject H0.

If zcomputed  zcritical, reject H0.
Example 1: One Sample z Test

A researcher reports that the average salary

of College Deans is more than ₧63,000. A
sample of 35 College Deans has a mean
salary of ₧65,700. At α = 0.01, test the claim
that the College Deans earn more than
₧63,000 a month. The standard deviation of
the population is ₧5,250.
Solution 1:

Given: X = 65,700, μ = 63,000,

σ = 5,250, n = 35

Step 1: State the hypotheses and identify the claim.

H0: μ  63,000 (claim) H1: μ  63,000

Step 2: Level of significance is α = 0.01.

Step 3: The t critical value is 2.326 (one-tailed test)

Step 4: Compute the one sample z test.

Solution 1:

X − 65,700 − 63,000
z= = = 3.043
/ n 5,250 / 35

Step 5: Decision rule.

Reject H0

0 2.326 3.043
Step 6: Conclusion.
We can conclude that there is enough evidence
to support the claim that the monthly salary of
College Deans is more than ₧63,000.
One Sample t Test

One Sample t test is a statistical procedure

that is used to know the mean difference
between the sample and the known value of
the population mean.

X −
t=
s/ n
Assumptions in One Sample t test

 The population must be approximately

normally distributed.
 Samples drawn from the population should
be random.

 Cases of the samples should be independent.

 Sample size should be less than 30.

 The population mean should be known.

Procedure for One Sample t test

 Procedure for One Sample t test .

H0: μ = specified value
H1: μ , ,  specified value

 Calculate the sample mean and standard deviation.

 Calculate the value of the one sample t test

 Calculate the degrees of freedom. df = n – 1

 Statistical decision for hypothesis testing

If tcomputed  tcritical, do not reject H0.
If tcomputed  tcritical, reject H0.
Example 1: One Sample t Test

One of the undersecretary of the

Department of Labor and Employment
(DOLE) claims that the average salary of civil
engineer is ₧18,000. A sample of 19 civil
engineer’s salary has a mean of ₧17,350 and
a standard deviation of ₧1,230. Is there
enough evidence to reject the
undersecretary’s claim at α = 0.01?
Solution 1:

Given: X = 17,350, μ = 18,000,

s = 1,230, n = 19

Step 1: State the hypotheses and identify the claim.

H0: μ = 18,000 (claim) H1: μ  18,000

Step 2: Level of significance is α = 0.01 & df = 19-1 = 18.

Step 3: The t critical value is 2.878 (two-tailed test)

Step 4: Compute the one sample t test.

Solution 1:

X −  17,350 − 18,000
t= = = −2.303
s/ n 1,230 / 19

Step 5: Decision rule.

Do not
Reject H0

-2.878 -2.303 0 +2.878

Step 6: Conclusion.
We can conclude that the starting salary of
civil engineers is ₧18,000 .
Using z Test and t Test

Is σ known?

Yes No

Use: Is n  30?
X −
z=
/ n
Yes No

Use: Use:
X − X −
z= t=
s/ n s/ n
z for Proportion

This test can be considered as a binomial

experiment when there are only two
outcomes and the probability of success
does not change from trial to trial (the
outcomes of each trial are independent).

p̂ − p
z=
pq / n
Assumptions in z Test for Proportion

 Subjects are randomly selected.

 Population distribution is normal.

 Observations are dichotomous.

Procedure for One Sample z test

 Procedure for One Sample z test .

H0: p = specified value
H1: p , ,  specified value
 Calculate the sample proportion.
 Calculate the value of the z test for proportion.

 Statistical decision for hypothesis testing

If zcomputed  zcritical, do not reject H0.

If zcomputed  zcritical, reject H0.
Example 1: z Test for Proportion

A recent survey done by Philippine Housing

Authority found that 35% of the population
owns their homes. In a random sample of
240 heads of households, 78 responded that
they owned their homes. At the 0.01 level of
significance, does that indicate a difference
from the national proportion?
Solution 1:

Given: X = 78, n = 240, p = 35% = 0.35

Step 1: State the hypotheses and identify the claim.

H0: p = 0.35 (claim) H1: p  0.35

Step 2: Level of significance is α = 0.01.

Step 3: The t critical value is 2.576 (two-tailed test)

Step 4: Compute the p̂ .

X 78 p = 0.35
p̂ = = = 0.325
n 240 q = 1 – p = 1 – 0.35 = 0.65
Solution 1:

p̂ − p 0.325 − 0.35
z= = = −0.812
pq / n (0.35)(0.65) / 240

Step 5: Decision rule.

Do not
Reject H0

-2.576 -0.812 0 +2.576

Step 6: Conclusion.
We can conclude that there is not enough
evidence to reject the claim that 35% of the
Filipinos owned their homes.
Do not put your faith in what statistics say until you have
carefully considered what they do not say.
– William W. Watt

Copyright by Winston S. Sirug, Ph.D.