Testing Hypotheses

Two-Sample Procedures
Testing Hypotheses
and Making Decisions
TWO RELATIVELY LARGE INDEPENDENT
SAMPLES (n1 , n2 > 30)

Difference between means

 H0 :   
 H1 :  ≠ 
 Compare Z  x1  x2 with Z/
 x x  12  22
1 2
 x1  x 2  
and  known: n1 n2

and  unknown: s12 s2 2

 x1  x 2  
n1 n2

where s1 and s2 are computed using STDEV

TWO RELATIVELY LARGE INDEPENDENT
SAMPLES (n1 , n2 > 30)

Difference between means (cont’d)

 Example:
In a manufacturing firm, the productivity of two units is
measured. Is the productivity of unit A significantly higher
than the productivity of unit B?
EXAMPLE (cont’d)
Unit A Unit B
Sample Size 50 60
Average Productivity 124 116
Sample standard dev. 10 12
2 2
s1 s2 100 144
ˆ x1  x2      2  2.4  2.1
n1 n2 50 60
x1  x2 124  116
z   3.81
 x1 x2 2.1
 We reject the null hypothesis and conclude that the productivity
difference between the two units is statistically significant.
TWO RELATIVELY LARGE INDEPENDENT
SAMPLES (n1 , n2 > 30)

Difference between two percentages

 H0 :  
 H0 :  ≠ 

p1  p2
 Compare z with Z/
ˆ p1  p2

where  p1 (100  p1 ) p2 (100  p2 )

p1  p2  
n1  1 n2  1
INDEPENDENT SAMPLES
(at least one of n1 or n2  30)

Difference between means

 The two samples originate from populations assumed to
be normally distributed and the unknown standard
deviations for these two populations are equal
 H0 :  
x1  x2
 Compare z with t(n1+n2 -2 ,/2)
ˆ x1  x2
s12 (n1  1)  s2 2 (n2  1) 1 1
where  x1  x 2   
n1  n2  2 n1 n2
and s1 and s2 are computed using STDEV
INDEPENDENT SAMPLES
(at least one of n1 or n2  30)

Women Men
Sample Size 15 22
Mean Salary $24,467 $33,095
Sample Standard Dev. $2,806 $4,189

 Example: In the U.S., a company is taken to court on the basis

of discrimination in its salary policy. Is the allegation of sex-
based salary discrimination statistically likely?
EXAMPLE (cont’d)

 Can the difference of $8,628 $ be the result of chance?

 To be able to use the test, note that although the variability in
men salaries is slightly higher than that of women, the variability
is not substantially different between the groups
 The standard error of the difference between means is:
2806 2 (15  1)  4189 2 (22  1) 1 1
 x  x     1238
1 2
15  22  2 15 22
 With  = .001, the critical ratio 8,628 / 1,238 = 6.97 must be
compared with t(n1+n2 -2 ,/2)= t (35, .0005) = 3.591. This leads to the
rejection of the null hypothesis assuming that the two mean
salaries are equal