COMPARISON OF THE TRADITIONAL (CRITICAL VALUE) AND P-VALUE METHOD

TRADITIONAL (CRITICAL VALUE) P-VALUE METHOD

METHOD
1. Parameter value of interest Parameter value of interest

2. Hypotheses Hypotheses

3. Assumptions (CLT, normality Assumptions (CLT, normality

randomness) randomness)

4. level (two-tailed; one-tailed) level (two-tailed; one-tailed)

5. Test statistic (z, t, etc) Test statistic (z, t, etc)

Computation of the test-statistic Computation of the test-statistic
Computation of the p-value

6. Decision Rule Decision Rule

Reject 0 if the computed test statistic Reject 0 if the computed probability
positive critical value or if the computed value .
test statistic is < the negative critical value.

Do not reject 0 if the computed test Do not reject 0 if the computed

statistic is < positive value and/or if the probability value >
computed test statistic is > the negative
critical value.

7. Comparison between the computed Comparison between p-value and

statistic and critical value(s)

Decision Decision
Interpretation Interpretation

From Statistics and Probability book published by Rex bookstore