Contemporary

Business
Statistics
4e Slides by

John
Loucks
St. Edwards
University

2012 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide 1
Williams|Sweeney|
or duplicated, or posted to a publicly accessible website, in whole or in part.
 Chapter 10, Part B
Statistical Inference About Means and
Proportions With Two Populations
Inferences About the Difference Between
Two Population Means: Matched Samples
Inferences About the Difference Between
Two Population Proportions

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 Inferences About the Difference Between
Two Population Means: Matched Samples
With a matched-sample design each sampled item
provides a pair of data values.
This design often leads to a smaller sampling
error
than the independent-sample design
because
variation between sampled items is
eliminated as a
source of sampling error.

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 Inferences About the Difference Between
Two Population Means: Matched Samples
Example: Express Deliveries
A Chicago-based firm has documents that
must
be quickly distributed to district offices
throughout
the U.S. The firm must decide between two
delivery
services, UPX (United Parcel Express) and
INTEX
(International Express), to transport its
documents.

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 Inferences About the Difference Between
Two Population Means: Matched Samples
Example: Express Deliveries
In testing the delivery times of the two
services,
the firm sent two reports to a random sample
of its
district offices with one report carried by UPX
and
the other report carried by INTEX. Do the
data on
the next slide indicate a difference in mean
delivery
times for the two services? Use a .05 level of
2012 significance.
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5
or duplicated, or posted to a publicly accessible website, in whole or in part.
 Inferences About the Difference Between
Two Population Means: Matched Samples

Delivery Time (Hours)

District Office UPX INTEX Difference
Seattle 32 25 7
Los Angeles 30 24 6
Boston 19 15 4
Cleveland 16 15 1
New York 15 13 2
Houston 18 15 3
Atlanta 14 15 -1
St. Louis 10 8 2
Milwaukee 7 9 -2
Denver 16 11 5
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 Inferences About the Difference Between
Two Population Means: Matched Samples
p Value and Critical Value Approaches

1. Develop the hypotheses.

H0: d = 0
Ha: d
Let d = the mean of the difference values for the
two delivery services for the population
of district offices

2012 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide 7
or duplicated, or posted to a publicly accessible website, in whole or in part.
 Inferences About the Difference Between
Two Population Means: Matched Samples
p Value and Critical Value Approaches

2. Specify the level of significance. = .05

3. Compute the value of the test statistic.

di ( 7 6... 5)
d 2. 7
n 10
( di d ) 2 76.1
sd 2. 9
n 1 9
d d 2.7 0
t 2.94
sd n 2.9 10
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 Inferences About the Difference Between
Two Population Means: Matched Samples
p Value Approach
4. Compute the p value.

For t = 2.94 and d.f. = 9, the pvalue is

between
.02 and .01. (This is a two-tailed test, so we
double the upper-tail areas of .01 and .005.)
5. Determine whether to reject H0.
Because pvalue < = .05, we reject H0.
We are at least 95% confident that
there is a difference in mean delivery
times for the two services?
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 Inferences About the Difference Between
Two Population Means: Matched Samples
Critical Value Approach

4. Determine the critical value and rejection rule.

For = .05 and d.f. = 9, t.025 = 2.262.

Reject H0 if t > 2.262

5. Determine whether to reject H0.

Because t = 2.94 > 2.262, we reject H0.
We are at least 95% confident that there
is a difference in mean delivery times for
the two services?

2012 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide 10
or duplicated, or posted to a publicly accessible website, in whole or in part.
 Excels t-Test: Paired Two Sample
for Means Tool
Step 1 Click the Data tab on the Ribbon
Step 2 In the Analysis group, click Data Analysis
Step 3 Choose t-Test: Paired Two Sample for Means
from the list of Analysis Tools
Step 4 When the t-Test: Paired Two Sample for Means
dialog box appears:
(see details on next slide)

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 Excels t-Test: Paired Two Sample
for Means Tool
Excel Dialog Box

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or duplicated, or posted to a publicly accessible website, in whole or in part.
 Excels t-Test: Paired Two Sample
for Means Tool
Excel Value Worksheet

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or duplicated, or posted to a publicly accessible website, in whole or in part.
 Inferences About the Difference Between
Two Population Proportions
Interval Estimation of p1 - p2
Hypothesis Tests About p1 - p2

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or duplicated, or posted to a publicly accessible website, in whole or in part.
 Sampling Distribution of p1 p2

Expected Value
E ( p1 p2 ) p1 p2

Standard Deviation (Standard Error)

p1 (1 p1 ) p2 (1 p2 )
p1 p2
n1 n2

where: n1 = size of sample taken from population 1

n2 = size of sample taken from population 2

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 Sampling Distribution of p1 p2

If the sample sizes are large, the sampling distribution

of p1 pcan
2 be approximated by a normal probability
distribution.

The sample sizes are sufficiently large if all of these

conditions are met:
n1p1 > 5 n1(1 - p1) > 5

n2p2 > 5 n2(1 - p2) > 5

2012 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide 16
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 Sampling Distribution of p1 p2

p1 (1 p1 ) p2 (1 p2 )
p1 p2
n1 n2

p1 p2
p1 p2

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 Interval Estimation of p1 - p2

Interval Estimate

p1 (1 p1 ) p2 (1 p2 )
p1 p2 z / 2
n1 n2

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 Interval Estimation of p1 - p2

Example: Market Research Associates

Market Research Associates is conducting
research to evaluate the effectiveness of a
clients
new advertising campaign. Before the new
campaign began, a telephone survey of 150
households in the test market area showed 60
households aware of the clients product.
The new campaign has been initiated
with TV
and newspaper advertisements running for
three weeks.

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 Interval Estimation of p1 - p2

Example: Market Research Associates

A survey conducted immediately after the
new
campaign showed 120 of 250 households
aware
Does
of the the data
clients support the position that
product.
the
advertising campaign has provided an
increased
awareness of the clients product?

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 Point Estimator of the Difference Between
Two Population Proportions
p1 = proportion of the population of households
aware of the product after the new campaign
p2 = proportion of the population of households
aware of the product before the new campaign
p=1 sample proportion of households aware of the
product after the new campaign
p=2 sample proportion of households aware of the
product before the new campaign

120 60
p1 p2 .48 .40 .08
250 150

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 Interval Estimation of p1 - p2

For = .05, z.025 = 1.96:

.48(.52) .40(.60)
.48 .40 1.96
250 150
.08 +
1.96(.0510)
.08 + .10
Hence, the 95% confidence interval for the difference
in before and after awareness of the product is
-.02 to +.18.

2012 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide 22
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 Interval Estimation of p1 - p2

Excel Formula Worksheet

A B C D E
1 Sur2 Sur1 Survey 2 (from Popul.1) Survey 1 (from Popul.2)
2 No Yes Sample Size 250 150
3 Yes No No. of "Yes" =COUNTIF(A2:A251,"Yes") =COUNTIF(B2:B151,"Yes")
4 Yes Yes Samp. Propor. =D3/D2 =E3/E2
5 No Yes
6 Yes No Confid. Coeff. 0.95
7 No No Lev. Of Signif. =1-D6
8 No Yes z Value =NORM.S.INV(1-D7/2,TRUE)
9 Yes No
10 No No Std. Error =SQRT(D4*(1-D4)/D2+E4*(1-E4)/E2)
11 Yes Yes Marg. of Error =D8*D10
12 Yes No
13 Yes Yes Pt. Est. of Diff. =D4-E4
14 No Yes Lower Limit =D13-D11
15 Yes Yes Upper Limit =D13+D11
Note: Rows 16-251 are not shown.
2012 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide 23
or duplicated, or posted to a publicly accessible website, in whole or in part.
 Using Excel to Develop
an Interval Estimate of p1 p2
Excel Value
Worksheet
A B C D E
1 Sur2 Sur1 Survey 2 (from Popul.1) Survey 1 (from Popul.2)
2 No Yes Sample Size 250 150
3 Yes No No. of "Yes" 120 60
4 Yes Yes Samp. Propor. 0.48 0.40
5 No Yes
6 Yes No Confid. Coeff. 0.95
7 No No Lev. Of Signif. 0.05
8 No Yes z Value 1.960
9 Yes No
10 No No Std. Error 0.0510
11 Yes Yes Marg. of Error 0.0999
12 Yes No
13 Yes Yes Pt. Est. of Diff. 0.080
14 No Yes Lower Limit -0.020
15 Yes Yes Upper Limit 0.180
Note: Rows 16-251 are not shown.
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 Hypothesis Tests about p1 - p2

Hypotheses
We focus on tests involving no difference
between
the two population proportions (i.e. p1 = p2)
H : p p 0 HH
0 1 2 0: :pp
1 -p
p2 <00 H : p p 0
0 1 2 0 1 2
H a: p1 p2 0 HH
a: :pp - p > 0 H : p p 0
a 11 p22 0 a 1 2

Left-tailed Right-tailed Two-tailed

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 Hypothesis Tests about p1 - p2

Pooled Estimate of Standard Error ofp1 p2

1 1
p1 p2 p (1 p )
n1 n2

where:
n1p1 n2p2
p
n1 n2

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 Hypothesis Tests about p1 - p2

Test Statistic

(p1 p2 )
z
1 1
p(1 p)
n1 n2

2012 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide 27
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 Hypothesis Tests about p1 - p2

Example: Market Research Associates

Can we conclude, using a .05 level of
significance,
that the proportion of households aware of the
clients product increased after the new
advertising
campaign?

2012 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide 28
or duplicated, or posted to a publicly accessible website, in whole or in part.
 Hypothesis Tests about p1 - p2

p -Value and Critical Value Approaches

1. Develop the hypotheses.H0: p1 - p2 < 0

Ha: p1 - p2 > 0
p1 = proportion of the population of households
aware of the product after the new campaign
p2 = proportion of the population of households
aware of the product before the new campaign

2012 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide 29
or duplicated, or posted to a publicly accessible website, in whole or in part.
 Hypothesis Tests about p1 - p2

p -Value and Critical Value Approaches

2. Specify the level of significance. = .05

3. Compute the value of the test statistic.

250(. 48) 150(. 40) 180
p . 45
250 150 400

s p1 p2 . 45(. 55)( 1 1 ) . 0514

250 150
(.48 .40) 0 .08
z 1.56
.0514 .0514

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 Hypothesis Tests about p1 - p2

p Value Approach
4. Compute the p value.

For z = 1.56, the pvalue = .0594

5. Determine whether to reject H0.

Because pvalue > = .05, we cannot reject H0.
We cannot conclude that the proportion of
households
aware of the clients product increased after the
new
campaign.
2012 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide 31
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 Hypothesis Tests about p1 - p2

Critical Value Approach

4. Determine the critical value and rejection rule.

For = .05, z.05 = 1.645

Reject H0 if z > 1.645

5. Determine whether to reject H0.

Because 1.56 < 1.645, we cannot reject H0.
We cannot conclude that the proportion of
households
aware of the clients product increased after the
new
2012 Cengage Learning. All Rights Reserved. May not be scanned, copied Slide
campaign.
or duplicated, or posted to a publicly accessible website, in whole or in part.
32
 Hypothesis Tests about p1 - p2

Excel Formula
AWorksheet
B C D E
1 Sur2 Sur1 Survey 2 (from Popul.1) Survey 1 (from Popul.2)
2 No Yes Sample Size =COUNTA(A2:A251) =COUNTA(B2:B151)
3 Yes No Resp. of Interest Yes Yes
4 Yes Yes Count for Resp. =COUNTIF(A2:A251,D3) =COUNTIF(B2:B151,E3)
5 No Yes Sample Propor. =D4/D2 =E4/E2
6 Yes No
7 No No Hypoth. Value 0 Note:
8 No Yes Point Est. of Diff. =D5-E5 Rows 17-251
9 Yes No are not shown.
10 No No Pooled Est. of p =(D2*D5+E2*E5)/(D2+E2)
11 Yes Yes Standard Error =SQRT(D10*(1-D10)*(1/D2+1/E2))
12 Yes No Test Statistic =(D8-D7)/D11
13 Yes Yes
14 No Yes p-Value (lower tail) =NORM.S.DIST(D12,TRUE)
15 Yes Yes p-Value (upper tail) =1-NORM.S.DIST(D12,TRUE)
16 Yes No p-Value (two tail) =2*MIN(D14,D15)

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 Hypothesis Tests about p1 - p2

Excel Value Worksheet

A B C D E
1 Sur2 Sur1 Survey 2 (from Popul.1) Survey 1 (from Popul.2)
2 No Yes Sample Size 250 150
3 Yes No Resp. of Interest Yes Yes
4 Yes Yes Count for Resp. 120 60
5 No Yes Sample Propor. 0.48 0.40
6 Yes No
7 No No Hypoth. Value 0 Note:
8 No Yes Point Est. of Diff. 0.08 Rows 17-251
9 Yes No are not shown.
10 No No Pooled Est. of p 0.450
11 Yes Yes Standard Error 0.0514
12 Yes No Test Statistic 1.557
13 Yes Yes
14 No Yes p-Value (lower tail) 0.940
15 Yes Yes p-Value (upper tail) 0.060
16 Yes No p-Value (two tail) 0.120

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 End of Chapter 10, Part B

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