MODULE 3

TEST OF HYPOTHESES:
SINGLE SAMPLE
 OUTLINE

• Hypothesis Testing Methodology

• Tests on the Mean of a Normal Distribution, Variance Known
• Tests on the Mean of a Normal Distribution, Variance Unknown
• Tests on the Variance and Standard Deviation of a Normal Distribution
• Tests on Population Proportion
 INTRODUCTION TO
HYPOTHESIS TESTING
 HYPOTHESIS TESTING
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HYPOTHESIS TESTING

A hypothesis test is a process that uses sample statistics to test a claim about the value
of a population parameter.
If a manufacturer of rechargeable batteries claims that the batteries they produce are good for an
average of at least 1,000 charges, a sample would be taken to test this claim.

A verbal statement, or claim, about a population parameter is called a statistical

hypothesis.
To test the average of 1000 hours, a pair of hypotheses are stated – one that represents the claim and
the other, its complement. When one of these hypotheses is false, the other must be true.
 HYPOTHESIS TESTING
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STARTING A HYPOTHESIS
“H subzero” or “H naught”
A null hypothesis H0 is a statistical hypothesis that contains a statement of equality such
as , =, or .
“H sub-a”

An alternative hypothesis Ha is the complement of the null hypothesis. It is a statement

that must be true if H0 is false and contains a statement of inequality such as >, , or <.

To write the null and alternative hypotheses, translate the claim made about the
population parameter from a verbal statement to a mathematical statement.
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE #1

Write the claim as a mathematical sentence. State the null and alternative hypotheses
and identify which represents the claim.
A manufacturer claims that its rechargeable batteries have an average life of at least
1,000 charges.
  1000
H0:   1000 (Claim) Condition of
equality
Ha:  < 1000
Complement of the
null hypothesis
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE #2

Write the claim as a mathematical sentence. State the null and alternative hypotheses
and identify which represents the claim.
Statesville college claims that 94% of their graduates find employment within six
months of graduation.
p = 0.94
H0: p = 0.94 (Claim) Condition of
equality
Ha: p  0.94
Complement of the
null hypothesis
 HYPOTHESIS TESTING
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KEY POINTS

• The null hypothesis H0 represents the status quo or the current belief in a situation.
• The alternative hypothesis H1 is the opposite of the null hypothesis and represents a research claim or
specific inference you would like to prove.
• If you reject the null hypothesis, you have statistical proof that the alternative hypothesis is correct.
• If you do not reject the null hypothesis, then you have failed to prove the alternative hypothesis. The
failure to prove the alternative hypothesis, however, does not mean that that you have proven the null
hypothesis.
• The null hypothesis H0 always refers to a specified value of the population parameter (such as µ), not a
sample statistic (such as X).
• The statement of the null hypothesis always contains an equal sign regarding the specified value of the
population parameter.
• The statement of the alternative hypothesis never contains an equal sign regarding the specified value of
the population parameter.
 HYPOTHESIS TESTING
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REGIONS OF REJECTION AND NON-REJECTION

The region of rejection consists of the values of the test statistic that are unlikely to occur if
the null hypothesis is true. These values are more likely to occur if the null hypothesis is
false. Therefore, if a value of the test statistic falls into this rejection region, you reject the
null hypothesis because that value is unlikely if the null hypothesis is true.

Critical Value divides the nonrejection region from the rejection region. The size of the
rejection region is directly related to the risks involved in using only a sample evidence to
make decisions about a population parameter.
 HYPOTHESIS TESTING
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TYPES OF ERRORS

No matter which hypothesis represents the claim, always begin the hypothesis
test assuming that the null hypothesis is true.

At the end of the test, one of two decisions will be made:

1. reject the null hypothesis, or
2. fail to reject the null hypothesis.
A TYPE I ERROR occurs if the null hypothesis is rejected when it is true and should not be
rejected. The probability of a type I error occurring is α.

A TYPE II ERROR occurs if the null hypothesis is not rejected when it is false and should be
rejected. The probability of a type II error occurring is β .
 HYPOTHESIS TESTING
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TYPES OF ERRORS

Level of Significance (α). It is the maximum allowable probability of committing a Type I error.
Confidence Coefficient (1 – α). It is the complement of the probability of a Type I error. When multiplied by 100%, the
confidence coefficient yields the confidence level that was studied when constructing confidence intervals.
Power of a Test (1 – β). It is the complement of the probability of a Type II error. It is the probability that you will reject
the null hypothesis when in fact it is false and should be rejected.
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE
Statesville college claims that 94% of their graduates find employment within six months of
graduation. What will a type I or type II error be?
H0: p = 0.94 (Claim)
Ha: p  0.94
A type I error is rejecting the null when it is true.
The population proportion is actually 0.94, but is rejected. (We
believe it is not 0.94.)
A type II error is failing to reject the null when it is false.
The population proportion is not 0.94, but is not rejected. (We believe it is
0.94.)
 HYPOTHESIS TESTING
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STATISTICAL TESTS
After stating the null and alternative hypotheses and specifying the level of
significance, a random sample is taken from the population and sample statistics are
calculated.
The statistic that is compared with the parameter in the null hypothesis is called the
test statistic.
Population Test Standardized test
parameter statistic statistic
μ x z (n  30)
t (n < 30)
p p̂ z
2 s2 X2
 HYPOTHESIS TESTING
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P-VALUES

If the null hypothesis is true, a P-value (or probability value) of a hypothesis test
is the probability of obtaining a sample statistic with a value as extreme or more
extreme than the one determined from the sample data.

The P-value of a hypothesis test depends on the nature of the test.

There are three types of hypothesis tests – a left-, right-, or two-tailed test. The
type of test depends on the region of the sampling distribution that favors a
rejection of H0. This region is indicated by the alternative hypothesis.
 HYPOTHESIS TESTING
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TYPES OF HYPOTHESIS TESTS

1. If the alternative hypothesis contains the less-than inequality symbol (<), the
hypothesis test is a left-tailed test.

H0: μ  k
Ha: μ < k

P is the area to
the left of the
test statistic.

z
-3 -2 -1 0 1 2 3
Test
statistic
 HYPOTHESIS TESTING
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TYPES OF HYPOTHESIS TESTS

2. If the alternative hypothesis contains the greater-than symbol (>), the hypothesis
test is a right-tailed test.

H0: μ  k
Ha: μ > k

P is the area to
the right of the
test statistic.

z
-3 -2 -1 0 1 2 3
Test
statistic
 HYPOTHESIS TESTING
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TYPES OF HYPOTHESIS TESTS

3. If the alternative hypothesis contains the not-equal-to symbol (), the hypothesis test
is a two-tailed test. In a two-tailed test, each tail has an area of P.

H0 : μ = k
Ha: μ  k
P is twice the
P is twice the area to the right
area to the left of the positive
of the negative test statistic.
test statistic.

z
-3 -2 -1 0 1 2 3
Test Test
statistic statistic
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE

For each claim, state H0 and Ha. Then determine whether the hypothesis test is a left-
tailed, right-tailed, or two-tailed test.

a.) A cigarette manufacturer claims that less than one-eighth of the US adult
population smokes cigarettes.
H0: p  0.125
Ha: p < 0.125 (Claim) Left-tailed test
b.) A local telephone company claims that the average length of a phone call is 8
minutes.
H0: μ = 8 (Claim)
Ha: μ  8 Two-tailed test
 HYPOTHESIS TESTING
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MAKING DECISION
Decision Rule Based on P-value
To use a P-value to make a conclusion in a hypothesis test, compare the
P-value with .
1. If P  , then reject H0.
2. If P > , then fail to reject H0.

Claim
Decision Claim is H0
There is enough evidence to
Reject H0 reject the claim.
There is not enough evidence
Do not reject H0 to reject the claim.
Claim is Ha
There is enough evidence to
support the claim.
There is not enough evidence
to support the claim.
 HYPOTHESIS TESTING
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STEPS FOR HYPOTHESIS TESTING

1. State the claim mathematically and verbally. Identify the null and alternative hypotheses.
2. Specify the level of significance, type of test and sample size.
3. Select the appropriate test statistic and identify the critical value.
4. Determine the rejection region. Create a sketch of the distribution model.
5. Calculate the standardized test statistic. Add it to your sketch.
6. State the statistical decision.
7. State the managerial conclusion.
TESTS ON THE MEAN OF A
NORMAL DISTRIBUTION
VARIANCE IS KNOWN
 HYPOTHESIS TESTING
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Z-TEST FOR THE MEAN

The z-test for the mean is a statistical test for a population mean. The z-test can be
used when the population is normal and variance is known, or for any population when
the sample size n is at least 30.
ഥ and the standardized test statistic is z.
The sample statistic is the sample mean 𝑿

𝑋ത − 𝜇 𝜎
𝑍=𝜎 𝜎𝑋ത =
ൗ 𝑛 𝑛
 HYPOTHESIS TESTING
MODULE 3

ILLUSTRATIVE EXAMPLE

A manufacturer claims that its rechargeable batteries are good

for an average of more than 1,000 charges. A random sample of
100 batteries has a mean life of 1002 charges and a standard
deviation of 14. Is there enough evidence to support this claim at
0.01 level of significance?
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE
STEP 1: State the null and alternative hypotheses.
H0:  ≤ 1000 charges
(The rechargeable batteries have a mean life of at most 1000 charges.)
Ha:  > 1000 charges
(The rechargeable batteries have a mean life of more than 1000 charges.)

STEP 2: Choose the level of significance, type of test, and sample size.
Level of significance, α = 0.01 ; Right-Tailed Test
STEP 3: Identify the critical value of the test statistic.
Test Statistic, 𝑍𝛼 = +2.33
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE
STEP 4: Determine the rejection region.

The rejection region is to the right of the

Test Statistic, Z.
P-value = 1 – 0.923641 = 0.0764
z
0 Z = 1.43

STEP 5: Calculate the standardized test statistic.

𝑋ത = 1002 𝑐ℎ𝑎𝑟𝑔𝑒𝑠 ത
𝑋−𝜇 1002−1000
𝜎 = 14 𝑍𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒𝑑 = 𝜎 = 14 = 1.4286
𝑛 = 100 𝑏𝑎𝑡𝑡𝑒𝑟𝑖𝑒𝑠 ൗ 𝑛 ൗ 100
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE
STEP 6: State the Decision Rule.

Using the standardized and critical values of the test statistic.

|𝑍𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒𝑑 | ≥ |𝑍𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 | : Reject H0
|𝑍𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒𝑑 | < |𝑍𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 | : Do not reject H0
|𝑍𝑐 = 1.43| < |𝑍𝑡 = 2.33| : Do not reject H0

Using the P-value.

𝑃 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼 : Reject H0
𝑃 − 𝑣𝑎𝑙𝑢𝑒 > 𝛼 : Do not reject H0
𝑃 = 0.0764 > 𝛼 = 0.01 : Do not reject H0
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE

STEP 7: State the managerial decision.

At the 1% level of significance, there is no enough evidence to support the claim that the
rechargeable battery has an average life of at least 1000 charges.
TESTS ON THE MEAN OF A
NORMAL DISTRIBUTION
VARIANCE IS UNKNOWN
 HYPOTHESIS TESTING
MODULE 3

t-TEST FOR THE MEAN

The t-test for the mean is a statistical test for a population mean. The t-test can be
used when the population is normal and variance is unknown, or for any population
when the sample size n is less than 30.
ഥ and the standardized test statistic is t.
The sample statistic is the sample mean 𝑿

𝑋ത − 𝜇
𝑡= 𝑠
ൗ 𝑛
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE

A local telephone company claims that the average length of a

phone call is 8 minutes. In a random sample of 18 phone calls,
the sample mean was 7.8 minutes and the standard
deviation was 0.5 minutes. Is there enough
evidence to support this claim at α = 0.05?
 HYPOTHESIS TESTING
MODULE 3

ILLUSTRATIVE EXAMPLE
STEP 1: State the null and alternative hypotheses.
H0:  = 8 minutes
(The mean length of a phone call is 8 minutes.)
Ha:   8 minutes
(The mean length of a phone call is not 8 minutes.)

STEP 2: Choose the level of significance, type of test, and sample size.
Level of significance, α = 0.05 ; Two-Tailed Test
STEP 3: Identify the critical value of the test statistic.
Degree of Freedom, df = 18 – 1 = 17; Test Statistic, 𝑡𝛼Τ2 = ± 2.110
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE
STEP 4: Determine the rejection region.

Rejection Region Rejection Region

z
t = -2.110 0 t = +2.110

STEP 5: Calculate the standardized test statistic.

𝑋ത = 7.8 𝑚𝑖𝑛𝑢𝑡𝑒𝑠 ത
𝑋−𝜇 7.8−8
𝑠 = 0.5 𝑚𝑖𝑛𝑢𝑡𝑒𝑠 𝑡𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒𝑑 = 𝑠 = 0.5 = −1.6971
𝑛 = 18 𝑝ℎ𝑜𝑛𝑒 𝑐𝑎𝑙𝑙𝑠 ൗ 𝑛 ൗ 18
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE
STEP 6: State the Decision Rule.

Using the standardized and critical values of the test statistic.

|𝑡𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒𝑑 | ≥ |𝑡𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 | : Reject H0
|𝑡𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒𝑑 | < |𝑡𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 | : Do not reject H0
|𝑡𝑐 = −1.6971| < |𝑡𝑡 = ±2.110| : Do not reject H0

Using the P-value.

𝑃 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼 : Reject H0
𝑃 − 𝑣𝑎𝑙𝑢𝑒 > 𝛼 : Do not reject H0
𝑃 − 𝑣𝑎𝑙𝑢𝑒 > 𝛼 = 0.05 : Do not reject H0
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE

STEP 7: State the managerial decision.

At the 5% level of significance, there is no enough evidence to reject the claim that the
average length of a phone call is 8 minutes.
TESTS ON THE VARIANCE AND STANDARD
DEVIATION OF A NORMAL DISTRIBUTION
 HYPOTHESIS TESTING
MODULE 3

Chi-Squared TEST FOR THE VARIANCE &

STANDARD DEVIATION

The chi-squared test for the variance and standard deviation is a statistical test for a
population variance or standard deviation.

The sample statistic is the sample variance and sample standard deviation,
𝑆 2 𝑎𝑛𝑑 𝑆 and the standardized test statistic is 𝑋 2 .

2
2
(𝑛 − 1)𝑠
𝑋 =
𝜎2
 HYPOTHESIS TESTING
MODULE 3

ILLUSTRATIVE EXAMPLE

An automated filling machine is used to fill bottles with liquid detergent. A

random sample of 20 bottles results in a sample variance of fill volume of
s2 = 0.0153 (fluid ounces)2. If the variance of fill volume exceeds 0.01 (fluid
ounces)2, an unacceptable proportion of bottles will be underfilled or
overfilled. Is there evidence in the sample data to suggest that the
manufacturer has a problem with underfilled or overfilled bottles? Use α =
0.05 and assume that fill volume has a normal distribution.
 HYPOTHESIS TESTING
MODULE 3

ILLUSTRATIVE EXAMPLE
STEP 1: State the null and alternative hypotheses.
H0: 𝝈𝟐 ≤ 0.01
(The variance of fill volume is at most 0.01.)
Ha: 𝝈𝟐 > 0.01
(The variance of fill volume is greater than 0.01.)

STEP 2: Choose the level of significance, type of test, and sample size.
Level of significance, α = 0.05 ; Right-Tailed Test
STEP 3: Identify the critical value of the test statistic.
Degree of Freedom, df = 20 – 1 = 19; Test Statistic, 𝑋 2 𝛼 = 30.14
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE
STEP 4: Determine the rejection region.

Rejection Region

X2
30.14

STEP 5: Calculate the standardized test statistic.

2
𝑠 2 = 0.0153
2
(𝑛 − 1)𝑠 (20 − 1)(0.0153)
𝑛 = 20 𝑏𝑜𝑡𝑡𝑙𝑒𝑠 𝑋 = 2
= = 29.07
𝜎 0.01
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE
STEP 6: State the Decision Rule.

Using the standardized and critical values of the test statistic.

|𝑋 2 𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒𝑑 | ≥ |𝑋 2 𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 | : Reject H0
|𝑋 2 𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒𝑑 | < |𝑋 2 𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 | : Do not reject H0
|𝑋 2 𝑐 = 29.07| < |𝑋 2 𝑡 = 30.14| : Do not reject H0

Using the P-value.

𝑃 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼 : Reject H0
𝑃 − 𝑣𝑎𝑙𝑢𝑒 > 𝛼 : Do not reject H0
𝑃 − 𝑣𝑎𝑙𝑢𝑒 > 𝛼 = 0.05 : Do not reject H0
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE

STEP 7: State the managerial decision.

At 0.05 level of significance, there is no strong evidence that the variance of fill volume
exceeds 0.01 (fluid ounces)2 . So there is no strong evidence of a problem with incorrectly
filled bottles.
TESTS ON POPULATION PROPORTION
 HYPOTHESIS TESTING
MODULE 3

Z-TEST FOR PROPORTION

The z-test for proportion is a statistical test for a population proportion. The z-test can
be used when a binomial distribution is given such that np > 5 and nq > 5, and that n is
at least 30.

The sample statistic is the sample proportion 𝑝Ƹ and the standardized test statistic is z.

𝑝Ƹ − 𝑝 𝑝𝑞
𝑍= 𝜎𝑝ො =
𝜎𝑝ො 𝑛
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE

Statesville college claims that 94% of their graduates find

employment within six months of graduation. In a sample of 500
randomly selected graduates, 485 of them were employed. Is
there enough evidence to support the college’s claim at 10% level
of significance?

Verify that the products np and nq are at least 5.

np = (500)(0.94) = 470 and nq = (500)(0.06) = 30
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE
STEP 1: State the null and alternative hypotheses.
H0: p = 0.94
(The population proportion of the graduates that are employed within six months of
graduation is 94%.)
Ha: p ≠ 0.94
(The population proportion of the graduates that are employed within six months of
graduation is not 94%.)
STEP 2: Choose the level of significance, type of test, and sample size.
Level of significance, α = 0.10 ; Two-Tailed Test
STEP 3: Identify the critical value of the test statistic.
Test Statistic, 𝑍∝Τ2 = +1.65
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE
STEP 4: Determine the rejection region.

Rejection Region Rejection Region

z
Z = -1.65 0 t = +1.65

STEP 5: Calculate the standardized test statistic.

ො
𝑝−𝑝 0.97−0.94
𝑧𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒𝑑 = = = 2.8247
𝜎𝑝
ෝ (0.94)(0.06)ൗ
500
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE
STEP 6: State the Decision Rule.

Using the standardized and critical values of the test statistic.

|𝑍𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒𝑑 | ≥ |𝑍𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 | : Reject H0
|𝑍𝑐𝑎𝑙𝑐𝑢𝑙𝑎𝑡𝑒𝑑 | < |𝑍𝑐𝑟𝑖𝑡𝑖𝑐𝑎𝑙 | : Do not reject H0
|𝑍𝑐 = 2.8247| > |𝑍𝑡 = 1.65| : Reject H0

Using the P-value.

𝑃 − 𝑣𝑎𝑙𝑢𝑒 ≤ 𝛼 : Reject H0
𝑃 − 𝑣𝑎𝑙𝑢𝑒 > 𝛼 : Do not reject H0
𝑃 = 0.0023 < 𝛼 = 0.10 : Reject H0
 HYPOTHESIS TESTING
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ILLUSTRATIVE EXAMPLE

STEP 7: State the managerial decision.

At 0.10 level of significance, there is a strong evidence that the population proportion of
the graduates that are employed within six months of graduation is not equal to 94%.
END OF PRESENTATION