18-1

Chapter 18
Hypothesis Testing

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Learning Objectives
Understand . . . the nature and logic of hypothesis testing a statistically significant difference six-step hypothesis testing procedure

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Learning Objectives
Understand . . . differences between parametric and nonparametric tests and when to use each factors that influence the selection of an appropriate test of statistical significance how to interpret the various test statistics

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Hypothesis Testing

Inductive Reasoning

Deductive Reasoning

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Statistical Procedures

Inferential Statistics

Descriptive Statistics

Exhibit 18-1 Hypothesis Testing and the Research Process

18-6

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Approaches to Hypothesis Testing

Classical statistics Objective view of probability Established hypothesis is rejected or fails to be rejected Analysis based on sample data Bayesian statistics Extension of classical approach Analysis based on sample data Also considers established subjective probability estimates

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Statistical Significance

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Types of Hypotheses
Null
H0: = 50 mpg H0: < 50 mpg H0: > 50 mpg

Alternate
HA: = 50 mpg HA: > 50 mpg HA: < 50 mpg

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Exhibit 18-2 Two-Tailed Test of Significance

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Exhibit 18-2 One-Tailed Test of Significance

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Decision Rule

Take no corrective action if the analysis shows that one cannot reject the null hypothesis.

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Exhibit 18-3 Statistical Decisions

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Exhibit 18-4 Probability of Making a Type I Error

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Critical Values

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Exhibit 18-4 Probability of Making A Type I Error

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Factors Affecting Probability of Committing a Error

True value of parameter

Alpha level selected

One or two-tailed test used

Sample standard deviation Sample size

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Exhibit 18-5 Probability of Making A Type II Error

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Statistical Testing Procedures

State null hypothesis Interpret the test Choose statistical test

Stages

Obtain critical test value

Compute difference value

Select level of significance

18-20

Tests of Significance

Parametric

Nonparametric

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Assumptions for Using Parametric Tests

Independent observations

Normal distribution

Equal variances

Interval or ratio scales

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Exhibit 18-6

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Exhibit 18-6

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Exhibit 18-6

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Advantages of Nonparametric Tests

Easy to understand and use Usable with nominal data

Appropriate for ordinal data

Appropriate for non-normal population distributions

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How To Select A Test

How many samples are involved?

If two or more samples are involved, are the individual cases independent or related? Is the measurement scale nominal, ordinal, interval, or ratio?

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Exhibit 18-7 Recommended Statistical Techniques

Two-Sample Tests
____________________________________________

k-Sample Tests
____________________________________________

Measurement Scale Nominal

One-Sample Case Binomial x2 one-sample test Kolmogorov-Smirnov one-sample test Runs test

Related Samples McNemar

Independent Samples Fisher exact test x2 two-samples test Median test Mann-Whitney U KolmogorovSmirnov Wald-Wolfowitz t-test

Related Samples Cochran Q

Independent Samples x2 for k samples

Ordinal

Sign test Wilcoxon matched-pairs test t-test for paired samples

Friedman twoway ANOVA

Median extension Kruskal-Wallis one-way ANOVA

Interval and Ratio

t-test

Repeatedmeasures ANOVA

Z test

Z test

One-way ANOVA n-way ANOVA

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Questions Answered by One-Sample Tests Is there a difference between observed frequencies and the frequencies we would expect? Is there a difference between observed and expected proportions? Is there a significant difference between some measures of central tendency and the population parameter?

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Parametric Tests

Z-test

t-test

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One-Sample t-Test Example

Null Statistical test Significance level Calculated value Critical test value Ho: = 50 mpg t-test .05, n=100 1.786 1.66 (from Appendix C, Exhibit C-2)

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One Sample Chi-Square Test Example

Expected Frequencies (percent x 60) 27

Living Arrangement

Intend to Join

Number Interviewed

Percent (no. interviewed/200)

Dorm/fraternity
Apartment/rooming house, nearby Apartment/rooming house, distant Live at home

16

90

45

13

40

20

12

16 15
_____

40 30
_____

20 15
_____

12 9
_____

Total

60

200

100

60

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One-Sample Chi-Square Example

Null Statistical test Significance level Calculated value Critical test value Ho: 0 = E One-sample chi-square .05 9.89 7.82 (from Appendix C, Exhibit C-3)

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Two-Sample Parametric Tests

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Two-Sample t-Test Example

A Group

B Group

Average hourly sales Standard deviation

X1 = $1,500 s1 = 225

X2 = $1,300 s2 = 251

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Two-Sample t-Test Example

Null Statistical test Significance level Calculated value Critical test value Ho: A sales = B sales t-test .05 (one-tailed) 1.97, d.f. = 20 1.725 (from Appendix C, Exhibit C-2)

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Two-Sample Nonparametric Tests: Chi-Square

On-the-Job-Accident Cell Designation Count Expected Values Smoker Heavy Smoker

Yes 1,1 12, 8.24 2,1 9 7.73 3,1 13 18.03 34

No 1,2 4 7.75 2,2 6 7.27 3,2 22 16.97 32

Row Total 16

Moderate

15

Nonsmoker

35

Column Total

66

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Two-Sample Chi-Square Example

Null There is no difference in distribution channel for age categories. Statistical test Chi-square Significance level .05 Calculated value 6.86, d.f. = 2 Critical test value 5.99 (from Appendix C, Exhibit C-3)

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Exhibit 18-8 SPSS CrossTab Procedure

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Two-Related-Samples Tests

Parametric

Nonparametric

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Exhibit 18-9 Sales Data for Paired-Samples t-Test

Company GM GE Exxon IBM Ford AT&T Mobil DuPont Sears Amoco Total

Sales Year 2
126932 54574 86656 62710 96146 36112 50220 35099 53794 23966

Sales Year 1
123505 49662 78944 59512 92300 35173 48111 32427 49975 20779

Difference D 3427 4912 7712 3192 3846 939 2109 2632 3819 3187 D = 35781

D2 11744329 24127744 59474944 10227204 14971716 881721 4447881 6927424 14584761 10156969 D = 157364693

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Paired-Samples t-Test Example

Null Statistical test Significance level Calculated value Critical test value Year 1 sales = Year 2 sales Paired sample t-test .01 6.28, d.f. = 9 3.25 (from Appendix C, Exhibit C-2)

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Exhibit 18-10 SPSS Output for Paired-Samples t-Test

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Related-Samples Nonparametric Tests: McNemar Test

Before

After Do Not Favor

After Favor

Favor

Do Not Favor

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An Example of the McNemar Test

Before
After Do Not Favor After Favor

Favor

A=10

B=90

Do Not Favor

C=60

D=40

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k-Independent-Samples Tests: ANOVA Tests the null hypothesis that the means of three or more populations are equal One-way: Uses a single-factor, fixedeffects model to compare the effects of a treatment or factor on a continuous dependent variable

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Exhibit 18-12 ANOVA Example

__________________________________________Model Summary_________________________________________ Source Model (airline) Residual (error) Total d.f. 2 57 59 Sum of Squares 11644.033 11724.550 23368.583 Mean Square 5822.017 205.694 F Value 28.304 p Value 0.0001

_______________________Means Table________________________ Count Delta Lufthansa KLM 20 20 20 Mean 38.950 58.900 72.900 Std. Dev. 14.006 15.089 13.902 Std. Error 3.132 3.374 3.108

All data are hypothetical

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ANOVA Example Continued

Null Statistical test Significance level Calculated value Critical test value A1 = A2 = A3 ANOVA and F ratio .05 28.304, d.f. = 2, 57 3.16 (from Appendix C, Exhibit C-9)

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Post Hoc: Scheffes S Multiple Comparison Procedure Crit. Diff. 11.400 11.400 11.400

Verses Delta Lufthansa KLM Lufthansa KLM

Diff 19,950 33.950 14.000

p Value .0002 .0001 .0122

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Exhibit 18-13 Multiple Comparison Procedures

Test Fisher LSD Bonferroni Tukey HSD Tukey-Kramer Games-Howell Tamhane T2 Scheff S Brown-Forsythe Newman-Keuls Duncan Dunnets T3 X X Complex Comparisons X X X X X X X X X X X X X X X X X X X X X X Pairwise Comparisons Equal ns Only Unequal ns X X X X X X Equal Variances Assumed X Unequal Variances Not Assumed

Dunnets C

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Exhibit 18-14 ANOVA Plots

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Exhibit 18-15 Two-Way ANOVA Example

__________________________________________Model Summary_________________________________________ Source Airline Seat selection Airline by seat selection Residual d.f. 2 1 2 54 Sum of Squares 11644.033 3182.817 517.033 8024.700 Mean Square 5822.017 3182.817 258.517 148.606 F Value 39.178 21.418 1.740 p Value 0.0001 0.0001 0.1853

__________Means Table Effect: Airline by Seat Selection___________ Count Delta economy Delta business Lufthansa economy Lufthansa business KLM economy KLM business 10 10 10 10 10 10 Mean 35.600 42.300 48.500 69.300 64.800 81.000 Std. Dev. 12.140 15.550 12.501 9.166 13.037 9.603 Std. Error 3.839 4.917 3.953 2.898 4.123 3.037

All data are hypothetical

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k-Related-Samples Tests More than two levels in grouping factor Observations are matched

Data are interval or ratio

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Exhibit 18-17 RepeatedMeasures ANOVA Example

__________________________________________________________Model Summary_________________________________________________________ Source Airline Subject (group) Ratings d.f. 2 57 1 Sum of Squares 3552735.50 15067.650 625.633 Mean Square 17763.775 264.345 625.633 14.318 0.0004 F Value 67.199 p Value 0.0001

Ratings by air.......
Ratings by subj.....

2
57

2061.717
2490.650

1030.858
43.696

23.592

0.0001

___________________________________Means Table by Airline _________________________________________________________________________ Count Rating 1, Delta Rating 1, Lufthansa Rating 1, KLM Rating 2, Delta Rating 2, Lufthansa Rating 2, KLM 20 20 20 20 20 20 Mean 38.950 58.900 72.900 32.400 72.250 79.800 Std. Dev. 14.006 15.089 13.902 8.268 10.572 11.265 Std. Error 3.132 3.374 3.108 1.849 2.364 2.519

______________________________________Means Table Effect: Ratings_________________________________________________________________ Count Rating 1 Rating 2 60 60 Mean 56.917 61.483 Std. Dev. 19.902 23.208 Std. Error 2.569 2.996

All data are hypothetical.

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Key Terms
a priori contrasts Alternative hypothesis Analysis of variance (ANOVA Bayesian statistics Chi-square test Classical statistics Critical value F ratio Inferential statistics K-independent-samples tests K-related-samples tests Level of significance Mean square Multiple comparison tests (range tests) Nonparametric tests Normal probability plot

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Key Terms
Null hypothesis Observed significance level One-sample tests One-tailed test p value Parametric tests Power of the test Practical significance Region of acceptance Region of rejection Statistical significance t distribution Trials t-test Two-independentsamples tests

18-56

Key Terms
Two-related-samples tests Two-tailed test Type I error Type II error Z distribution Z test