HYPOTHESIS

TESTING FOR ONE

POPULATION
PARAMETER
Mean | Variance | Proportion

What is Hypothesis Testing?

Hypothesis testingrefers to the formal procedures used
by statisticians to accept or reject statistical hypotheses.
The best way to determine whether a statistical
hypothesis is true would be to examine the entire
population. Since that is often impractical, researchers
typically examine a random sample from the population.
If sample data are not consistent with the statistical
hypothesis, the hypothesis is rejected.

Two types of statistical hypotheses

Null hypothesis. The null hypothesis, denoted by H 0, is
usually the hypothesis that sample observations result
purely
from
chance.

Alternative hypothesis. The alternative hypothesis,

denoted by H1or Ha, is the hypothesis that sample
observations are influenced by some non-random cause.

Hypothesis Tests
A formal process to determine whether to reject a null hypothesis, based
on sample data. This process, calledhypothesis testing, consists of
four steps.
State the hypotheses. This involves stating the null and alternative
hypotheses. The hypotheses are stated in such a way that they are
mutually exclusive. That is, if one is true, the other must be false.
Formulate an analysis plan. The analysis plan describes how to use
sample data to evaluate the null hypothesis. The evaluation often
focuses around a single test statistic.
Analyze sample data. Find the value of the test statistic (mean score,
proportion, t-score, z-score, etc.) described in the analysis plan.
Interpret results. Apply the decision rule described in the analysis
plan. If the value of the test statistic is unlikely, based on the null
hypothesis, reject the null hypothesis.

Formulate an analysis plan

Significance level. Often, researchers choose
significant levelsequal to 0.01, 0.05, or 0.10; but
any value between 0 and 1 can be used.
Test method. Typically, the test method involves a
test statistic and a sampling distribution. Computed
from sample data, the test statistic might be a mean
score, proportion, difference between means,
difference between proportions, z-score, t-score, chisquare, etc. Given a test statistic and its sampling
distribution, a researcher can assess probabilities
associated with the test statistic. If the test statistic
probability is less than the significance level, the null
hypothesis is rejected.

Analyze sample data

Test statistic. When the null hypothesis involves a mean or proportion, use
either of the following equations to compute the test statistic.
Test statistic = (Statistic - Parameter) / (Standard deviation of statistic)
Test statistic = (Statistic - Parameter) / (Standard error of statistic)
whereParameteris the value appearing in the null hypothesis, andStatisticis
the point estimateofParameter. As part of the analysis, you may need to
compute the standard deviation or standard error of the statistic. Previously,
we presented common formulas for the standard deviation and standard error.
When the parameter in the null hypothesis involves categorical data, you may
use a chi-square statistic as the test statistic. Instructions for computing a chisquare test statistic are presented in the lesson on the chi-square goodness of
fit test.

P-value. The P-value is the probability of observing a sample statistic as

extreme as the test statistic, assuming the null hypotheis is true.

Decision Errors
Type I error. A Type I error occurs when the researcher
rejects a null hypothesis when it is true. The probability
of committing a Type I error is called thesignificance
level. This probability is also calledalpha, and is often
denoted by .
Type II error. A Type II error occurs when the researcher
fails to reject a null hypothesis that is false. The
probability of committing a Type II error is calledBeta,
and is often denoted by . The probability
ofnotcommitting a Type II error is called thePowerof
the test.

Decision Rules
P-value. The strength of evidence in support of a null
hypothesis is measured by theP-value.
Region of acceptance. Theregion of acceptanceis a
range of values. If the test statistic falls within the region
of acceptance, the null hypothesis is not rejected. The
region of acceptance is defined so that the chance of
making a Type I error is equal to the significance level.
The set of values outside the region of acceptance is called
theregion of rejection. If the test statistic falls within the
region of rejection, the null hypothesis is rejected. In such
cases, we say that the hypothesis has been rejected at the
level of significance.

One-Tailed and Two-Tailed Tests

A test of a statistical hypothesis, where the region of
rejection is on only one side of the sampling
distribution, is called aone-tailed test.

A test of a statistical hypothesis, where the region of

rejection is on both sides of the sampling distribution, is
called atwo-tailed test.

Power of a Hypothesis Test

The probability ofnotcommitting a Type II erroris called
thepowerof a hypothesis test.

Effect Size
To compute the power of the test, one offers an
alternative view about the "true" value of the population
parameter, assuming that the null hypothesis is false.
Theeffect sizeis the difference between the true value
and the value specified in the null hypothesis.
Effect size = True value - Hypothesized value

Factors That Affect Power

Sample size (n). Other things being equal, the greater the
sample size, the greater the power of the test.
Significance level (). The higher the significance level, the
higher the power of the test. If you increase the significance
level, you reduce the region of acceptance. As a result, you are
more likely to reject the null hypothesis. This means you are less
likely to accept the null hypothesis when it is false; i.e., less likely
to make a Type II error. Hence, the power of the test is increased.
The "true" value of the parameter being tested. The greater
the difference between the "true" value of a parameter and the
value specified in the null hypothesis, the greater the power of
the test. That is, the greater the effect size, the greater the power
of the test.

Applications of the General Hypothesis

Testing Procedure
Proportions
Difference between proportions
Regression slope
Means
Difference between means
Difference between matched pairs
Goodness of fit
Homogeneity
Independence

Hypothesis Test for a Proportion

How to conduct a hypothesis test of a proportion, when the following
conditions are met:
The sampling method is simple random sampling.
Each sample point can result in just two possible outcomes. We call
one of these outcomes a success and the other, a failure.
The sample includes at least 10 successes and 10 failures.
The population size is at least 20 times as big as the sample size.
This approach consists of four steps: (1) state the hypotheses, (2)
formulate an analysis plan, (3) analyze sample data, and (4)
interpret results.

State the Hypotheses

Every hypothesis test requires the analyst to state anull
hypothesisand analternative hypothesis. The hypotheses
are stated in such a way that they are mutually exclusive.
That is, if one is true, the other must be false; and vice
versa.
Formulate an Analysis Plan
The analysis plan describes how to use sample data to
accept or reject the null hypothesis. It should specify the
following elements.
Significance level. Often, researchers choosesignificance
levelsequal to 0.01, 0.05, or 0.10; but any value between 0 and 1
can
be
used.
Test method. Use theone-sample z-testto determine whether the
hypothesized population proportion differs significantly from the
observed sample proportion.

Analyze Sample Data

Using sample data, find the test statistic and its associated P-Value.
Standard deviation. Compute thestandard deviation() of the sampling
distribution.
= sqrt[ P * ( 1 - P ) / n ]
where P is the hypothesized value of population proportion in the null hypothesis,
and n is the sample size.
Test statistic. The test statistic is a z-score (z) defined by the following equation.
z = (p - P) /
where P is the hypothesized value of population proportion in the null hypothesis, p
is the sample proportion, and is the standard deviation of the sampling
distribution.

P-value. The P-value is the probability of observing a sample statistic as extreme as

the test statistic. Since the test statistic is a z-score, use theNormal Distribution
Calculatorto assess the probability associated with the z-score. (See sample
problems at the end of this lesson for examples of how this is done.)
Interpret Results
If the sample findings are unlikely, given the null hypothesis, the researcher rejects
the null hypothesis. Typically, this involves comparing the P-value to thesignificance
level, and rejecting the null hypothesis when the P-value is less than the significance
level.

Hypothesis Test for a Mean

How to conduct a hypothesis test of a mean, when the following conditions are
met:
The sampling method is simple random sampling.
The sampling distribution is normal or nearly normal.
Generally, the sampling distribution will be approximately normally distributed if
any of the following conditions apply.
The population distribution is normal.
The population distribution is symmetric, unimodal, without outliers, and the
sample size is 15 or less.
The population distribution is moderately skewed, unimodal, without outliers, and
the sample size is between 16 and 40.
The sample size is greater than 40, without outliers.
This approach consists of four steps: (1) state the hypotheses, (2) formulate an
analysis plan, (3) analyze sample data, and (4) interpret results.

State the Hypotheses

Every hypothesis test requires the analyst to state a null hypothesis and an
alternative hypothesis. The hypotheses are stated in such a way that they are
mutually exclusive. That is, if one is true, the other must be false; and vice versa.
The table below shows three sets of hypotheses. Each makes a statement about how
the population mean is related to a specified value M. (In the table, the symbol
means " not equal to ".)
Set
Null hypothesis Alternative hypothesis
1 = M M2
2 > M < M1
3 < M > M1

Number of tails

The first set of hypotheses (Set 1) is an example of a two-tailed test, since an

extreme value on either side of the sampling distribution would cause a researcher to
reject the null hypothesis. The other two sets of hypotheses (Sets 2 and 3) are onetailed tests, since an extreme value on only one side of the sampling distribution
would cause a researcher to reject the null hypothesis.

Formulate an Analysis Plan

The analysis plan describes how to use sample data to
accept or reject the null hypothesis. It should specify the
following elements.
Significance level. Often, researchers choose
significance levels equal to 0.01, 0.05, or 0.10; but any
value between 0 and 1 can be used.
Test method. Use the one-sample t-test to determine
whether the hypothesized mean differs significantly
from the observed sample mean.

Analyze Sample Data

Using sample data, conduct a one-sample t-test. This involves finding the standard error,
degrees of freedom, test statistic, and the P-value associated with the test statistic.
Standard error. Compute the standard error (SE) of the sampling distribution.
SE = s * sqrt{ ( 1/n ) * [ ( N - n ) / ( N - 1 ) ] }
wheresis the standard deviation of the sample, N is the population size, andnis the
sample size. When the population size is much larger (at least 20 times larger) than the
sample size, the standard error can be approximated by:SE = s / sqrt( n )
Degrees of freedom. The degrees of freedom (DF) is equal to the sample size (n) minus one.
Thus,
DF
=
n
1.

Test statistic. The test statistic is a t-score (t) defined by the following equation.
t = (x- ) / SE
wherexis the sample mean, is the hypothesized population mean in the null hypothesis,
and SE is the standard error.
P-value. The P-value is the probability of observing a sample statistic as extreme as the test
statistic. Since the test statistic is a t-score, use the t Distribution Calculatorto assess the
probability associated with the t-score, given the degrees of freedom computed above.

Interpret Results
If the sample findings are unlikely, given the null
hypothesis, the researcher rejects the null hypothesis.
Typically, this involves comparing the P-value to the
significance level, and rejecting the null hypothesis when
the P-value is less than the significance level.