Introduction to Hypothesis Testing

Sessions 11-12

Margin of Error and the Interval Estimate

A
A point
point estimator
estimator cannot
cannot be
be expected
expected to
to provide
provide the
the
exact
exact value
value of
of the
the population
population parameter.
parameter.
An
An interval
interval estimate
estimate can
can be
be computed
computed by
by adding
adding and
and
subtracting
subtracting aa margin
margin of
of error
error to
to the
the point
point estimate.
estimate.
Point Estimate +/ Margin of Error
The
The purpose
purpose of
of an
an interval
interval estimate
estimate is
is to
to provide
provide
information
information about
about how
how close
close the
the point
point estimate
estimate is
is to
to
the
the value
value of
of the
the parameter.
parameter.

Margin of Error and the Interval Estimate

The
The general
general form
form of
of an
an interval
interval estimate
estimate of
of aa
population
population mean
mean is
is

x Margin of Error

Interval Estimate of a Population Mean:

Known

In order to develop an interval estimate of a

population mean, the margin of error must be
computed using either:
the population standard deviation , or
the sample standard deviation s

is rarely known exactly, but often a good

estimate can be obtained based on historical
data or other information.
We refer to such cases as the known case.

Interval Estimate of a Population Mean:

Known
There is a 1 probability that the value of a
/2 x
sample mean will provide a margin of error zof
or less.

Sampling
distribution
of x

/2

1 - of all
x values

z /2 x

/2

x
z /2 x

Interval Estimate of a Population Mean:

Known
Sampling
distribution
of x

/2
interval
does not
include

1 - of all
x values

z /2 x

x
z /2 x

x -------------------------]

interval
includes

x -------------------------]
[------------------------- x -------------------------]

[------------------------[-------------------------

/2

Interval Estimate of a Population Mean:

Known

Interval Estimate of
x z /2

where: x
is the sample mean
1 - is the confidence coefficient
z/2 is the z value providing an area of
/2 in the upper tail of the standard
normal probability distribution
is the population standard deviation
n is the sample size

Interval Estimate of a Population Mean:

Known

Values of z/2 for the Most Commonly

Used Confidence Levels
Confidence
Level
z/2
90%
1.645
95%
1.960
99%
2.576

.10
.05
.01

/2
.05
.025
.005

Table
Look-up Area
.9500
.9750
.9950

Meaning of Confidence
Because
Because 90%
90% of
of all
all the
the intervals
intervals constructed
constructed using
using
x 1.645 x will
will contain
contain the
the population
population mean,
mean,
we
we say
say we
we are
are 90%
90% confident
confident that
that the
the interval
interval
x 1.645 x includes
includes the
the population
population mean
mean ..
We
We say
say that
that this
this interval
interval has
has been
been established
established at
at the
the
90%
90% confidence
confidence level.
level.
The
The value
value .90
.90 is
is referred
referred to
to as
as the
the confidence
confidence
coefficient.
coefficient.

Interval Estimate of a Population Mean:

Known

Adequate Sample Size

In
In most
most applications,
applications, aa sample
sample size
size of
of n
n=
= 30
30 is
is
adequate.
adequate.
If
If the
the population
population distribution
distribution is
is highly
highly skewed
skewed or
or
contains
contains outliers,
outliers, aa sample
sample size
size of
of 50
50 or
or more
more is
is
recommended.
recommended.

Interval Estimate of a Population Mean:

Known

Adequate Sample Size (continued)

If
If the
the population
population is
is not
not normally
normally distributed
distributed but
but is
is
roughly
roughly symmetric,
symmetric, aa sample
sample size
size as
as small
small as
as 15
15
will
will suffice.
suffice.

If
If the
the population
population is
is believed
believed to
to be
be at
at least
least
approximately
approximately normal,
normal, aa sample
sample size
size of
of less
less than
than 15
15
can
can be
be used.
used.

Hypothesis Testing

Hypothesis testing can be used to determine whether

a statement about the value of a population parameter
should or should not be rejected.
The null hypothesis, denoted by H0 , is a tentative
assumption about a population parameter.
The alternative hypothesis, denoted by Ha, is the
opposite of what is stated in the null hypothesis.
The hypothesis testing procedure uses data from a
sample to test the two competing statements
indicated by H0 and Ha.

Developing Null and Alternative

Hypotheses

It is not always obvious how the null and alternative

hypotheses should be formulated.

Care must be taken to structure the hypotheses

appropriately so that the test conclusion provides
the information the researcher wants.

The context of the situation is very important in

determining how the hypotheses should be stated.

In some cases it is easier to identify the alternative

hypothesis first. In other cases the null is easier.

Correct hypothesis formulation will take practice.

Developing Null and Alternative Hypotheses

Alternative Hypothesis as a Research

Hypothesis
Many applications of hypothesis testing involve
an attempt to gather evidence in support of a
research hypothesis.

In such cases, it is often best to begin with the

alternative hypothesis and make it the conclusion
that the researcher hopes to support.

The conclusion that the research hypothesis is true

is made if the sample data provide sufficient
evidence to show that the null hypothesis can be
rejected.

Developing Null and Alternative Hypotheses

Alternative Hypothesis as a Research Hypothesis

Example:
A new teaching method is developed that is
believed to be better than the current method.

Alternative Hypothesis:
The new teaching method is better.

Null Hypothesis:
The new method is no better than the old method.

Developing Null and Alternative

Hypotheses

Alternative Hypothesis as a Research Hypothesis

Example:
A new sales force bonus plan is developed in an
attempt to increase sales.

Alternative Hypothesis:
The new bonus plan increase sales.
Null Hypothesis:
The new bonus plan does not increase sales.

Developing Null and Alternative

Hypotheses

Example:
A new drug is developed with the goal of lowering
blood pressure more than the existing drug.

Alternative Hypothesis as a Research Hypothesis

Alternative Hypothesis:
The new drug lowers blood pressure more than
the existing drug.
Null Hypothesis:
The new drug does not lower blood pressure more
than the existing drug.

Developing Null and Alternative

Hypotheses
Null Hypothesis as an Assumption to be Challenged

We might begin with a belief or assumption that

a statement about the value of a population
parameter is true.

We then using a hypothesis test to challenge the

assumption and determine if there is statistical
evidence to conclude that the assumption is
incorrect.

In these situations, it is helpful to develop the null

hypothesis first.

Developing Null and Alternative

Hypotheses

Null Hypothesis as an Assumption to be

Challenged
Example:
The label on a soft drink bottle states that it
contains 67.6 fluid ounces.

Null Hypothesis:
The label is correct. > 67.6 ounces.

Alternative Hypothesis:
The label is incorrect. < 67.6 ounces.

Summary of Forms for Null and

Alternative Hypotheses about a
Population Mean

The equality part of the hypotheses always appears

in the null hypothesis.

In general, a hypothesis test about the value of a

population mean must take one of the following
three forms (where 0 is the hypothesized value of
the population mean).

H 0: 0
H a: 0

H 0: 0
H a: 0

H 0: 0
H a: 0

One-tailed One-tailed
(lower-tail) (upper-tail)

Two-tailed

Null and Alternative Hypotheses

Example: Metro EMS
A major west coast city provides one of
the most
comprehensive emergency medical services
in the
world. Operating in a multiple hospital
system
with approximately 20 mobile medical units,
the The director of medical services wants to
service
goal
is to respond
to that
medical
formulate
a hypothesis
test
could use a
emergencies
sample
with
a mean time
of 12 minutes
less.
of emergency
response
times to or
determine
whether
or not the service goal of 12 minutes or less
is being
achieved.

Null and Alternative Hypotheses

H0: The emergency service is meeting
the response goal; no follow-up
action is necessary.
Ha:

The emergency service is not

meeting the response goal;
appropriate follow-up action is
necessary.

where: = mean response time for the population

of medical emergency requests

Type I Error
Because hypothesis tests are based on sample data,
we must allow for the possibility of errors.

A Type I error is rejecting H0 when it is true.

The probability of making a Type I error when the

null hypothesis is true as an equality is called the
level of significance.
Applications of hypothesis testing that only control
the Type I error are often called significance tests.

Type II Error

A Type II error is accepting H0 when it is false.

It is difficult to control for the probability of making

a Type II error.
Statisticians avoid the risk of making a Type II
error by using do not reject H0 and not accept H0.

Type I and Type II Errors

Population Condition

Conclusion

H0 True
( < 12)

H0 False
( > 12)

Accept H0
Correct
(Conclude < 12)Decision

Type II Error

Reject H0
Type I Error
(Conclude > 12)

Correct
Decision