Chapter 9

Hypothesis Testing:
One Sample Tests

David Chow
Oct 2014
1

Learning Objectives
The basic principles of hypothesis testing
Use hypothesis testing to test a mean or

proportion
Underlying assumptions

Potential pitfalls and ethical issues

Basic Concepts

The Hypothesis
A hypothesis is a claim (assumption) about a

population parameter:
Population Mean

Eg: The mean weight for

kindergarten kids is = 20 kg
Population Proportion

Eg: The proportion of retirees with smart phones is = .68

4

The Process
Claim: The population mean age is of security guards is 50.
Draw a sample and find the sample mean.

Population

Sample
5

The Process

Suppose the sample mean age was X = 20

It is different from the assumption of = 50

What can we conclude?

1. Best educated guess, OR

2. Statistical reasoning (hypothesis testing here):

If the hypothesis were true, the probability of getting

such a small X is very small

So the hypothesis is rejected

6

The Process Graphical Illustration

Sampling Dist of X
x

=/n
... then you reject
Ho that = 50

20
it is unlikely that
you would get a
sample mean of this
value ...

= 50
If Ho is true

IF this were the

population mean
7

Terminology: Ho
The starting point of hypothesis testing is a

hypothesis, usually called the null hypothesis

OR: the null, or Ho

Eg: The mean no. of TV sets in US homes is 3

In symbols, it is:

H0 : 3
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Terminology: Ho and H1

How to set up Ho?

1.

Ho usually refers to the status quo

2.

Ho always has a number, and an equality

Must include any one of = , or

Hypothesis testing begins by assuming the null is true

An hypothesis must be stated in pairs, i.e., Ho and H1

H1 is the alternative hypothesis. It is the complement of Ho

Eg: If the null is Ho: = 3, the alternative is H1: ____.

A Quick Recap

Examples

1.

State Ho and H1 on mean body temperature

2.

State Ho and H1 for the mean age example

A hypothesis test can be one- or two- tailed

The test about must take one of the following three forms
(0 is the hypothesized value of ):

H 0 : 0
H a : 0

H 0 : 0
H a : 0

H 0 : 0
H a : 0

One-tailed
(lower-tail)

One-tailed
(upper-tail)

Two-tailed
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Test Statistic & Critical Values

If the sample mean is far from the assumed population

mean, the null is rejected.
How far is far enough to reject Ho?

We need critical value(s) for our decision.

Distribution of the test statistic (e.g., X)

Region of
Rejection

Region of
Rejection

Critical Values define Regions of Rejection

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Level of Significance,
Claim: The population mean age is 50.

H0: = 50
H1: 50
H0: 50
H1: > 50

a/2

a/2
Two-tail test

a
Upper-tail test

H0: 50
H1: < 50

Represents
critical value

Simple Rule:
Rejection
region ____

Lower-tail test a

0
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Errors in Decision Making

Your conclusion to a hypothesis testing is subject to

two potential errors that are different:

Type I error: Wrongly reject a true Ho.
It is equal to a, the probability of drawing an extreme

sample when Ho is true.

It is set by researcher in advance.

Type II error: Fails to reject a false Ho.

It is called , which is not selected but computed when n

and a are known.

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Errors in Decision Making

Possible Hypothesis Test Outcomes
Actual Situation
Decision

Ho True

Ho False

Do Not
Reject Ho

No Error

Type II Error

Probability 1 -

Probability

Reject Ho

Type I Error

No Error

Probability

Probability 1 -

Eg: A Murder Trial

Ho: Innocence

H1: Guilty

Jury decision
Reject the null

(i.e., convicting
the defendant), or
Do not reject Ho.

Identify the
(potential) errors in
this decision.
14

Eg: Medical Test

Medical test
Ho: No cancer
H1: Cancer
For this decision, what exactly are the potential errors?
Type I error
wrong
diagnosis of cancer -- unnecessary worry or treatment
_____________

Type II error
failure
to detect cancer -- patient might miss treatment
_____________

15

a or : Pick Your Poison?

Given the sample size n and a, can be computed.

Tradeoff: If you want to reduce one type of error, it generally

results in increasing the other type of error.

The only way to minimize both types of error is to increase

the sample size, but this may be infeasible.

Which error to choose?

Which one leads to a more serious consequences?
(The answer varies on a case-by-case basis.)

Set your a (hence ) accordingly.

The common choice is to set a = 5%.

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Hypothesis
Testing:
Known

17

Hypothesis Testing: Known

Two tail test for the mean (assume is known):
Convert sample statistic (X) to test statistic (Z):
Z

Use the Z-table to find the critical Z values, given a

specified level of significance .

Decision Rule: If the test statistic falls in the rejection

region, reject Ho ; otherwise do not reject Ho

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Hypothesis Testing: Known

H0: = 3
H1 : 3

For two-tail tests,

there are two critical

values, and two
regions of rejection.

a/2

a/2

3
Reject H0

Do not reject H0

-Z

Reject H0

+Z

Lower
critical value

Upper

critical value
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Eg: Mean Weight

Example: Test the claim that the true mean weight of
chocolate bars manufactured in a factory is 3 ounces.
State the appropriate null and alternative hypotheses:
H0: = 3

H1: 3

(two tailed test)

Specify the level of significance

Suppose a = .05 is chosen.
Choose a sample size

Suppose a sample of size n = 100 is selected.

20

Eg: Mean Weight

Determine the appropriate technique
is known so this is a Z test
= 0.8 is known from past company records

Set up the critical values

For a = .05 the critical Z values are 1.96
Compute the test statistic based on the sample data:
Suppose n = 100 and X = 2.84
So the test statistic is:

X
2.84 3 .16

2.0

0.8
.08
n
100
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Eg: Mean Weight

Decision: Is the test statistic in the rejection region?
Reject Ho if Z < -1.96
or Z > 1.96; otherwise
do not reject.

a= 0.05
a /2

Reject H0

Conclusion in nontechnical term:

Based on the
sample evidence,
the mean weight of
chocolate bars is
not equal to 3.

-Z /2 = -1.96

Upper-tail area = ??

Do not reject H0

Reject H0

+Z/2 = +1.96

Here, Z = -2.0 < -1.96, so the test statistic is

in the rejection region

22

Eg: Volume of Soft-Drink

Set a = 2%. The sample has a mean of 12.19oz, and a size of 36. Past
record shows that = 0.11oz. Test the claim that = 12.00oz.

(1) Ho: = 12.00; H1: 12.00.

(2) Test statistic Z = (X ) / X =

(3) Critical values: Z0.01 =

Hence the region of rejection is:

(4) Finally, the conclusion:

ANSWER:
(2) Test statistic: Z = 10.364
(3) Critical values: Z0.01 = 2.327, (Reject of rejection: Z > 2.327 or Z < -2.327)

(4) Conclusion: Reject Ho as the test statistic falls in the region of rejection.
There is sample evidence to reject the claim of =12.00. We conclude
that 12.00 instead.
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Summary: Six Steps

Six Steps of Hypothesis Testing:
1. State the null hypothesis Ho and the alternative H1
2. Choose the level of significance and the sample size n

3. Determine the appropriate statistical technique and the test statistic to use
4. Find the critical values and determine the rejection region(s)
5. Collect data and compute the test statistic from the sample result

6. Compare the test statistic to the critical value:

Reject Ho if the test statistic falls in the rejection region
Otherwise do not reject Ho

Express the decision in non-technical terms

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Hypothesis Testing: Known

p-Value Approach
The p-value is the probability of

obtaining a test statistic equal to or

more extreme ( < or > ) than the
observed sample value given Ho is true
It is also called observed level of

significance

25

Hypothesis Testing: Known

p-Value Approach
Convert sample statistic (eg, X) to test statistic (eg, Z

statistic ).
Obtain the p-value from a statistical table.
Compare the p-value with a:
If p-value < a , reject Ho
If p-value a , do not reject Ho

If the p-value is

low, Ho must go.

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Hypothesis Testing: Known

p-Value Approach

Example: Mean Weight Again.

Ho: = 3.0;

Sample mean = 2.84, n = 100

X = 2.84 is translated to a Z
score of Z = -2.0
P(Z 2.0) .0228
P(Z 2.0) .0228

H1: 3.0

a/2 = .025

a/2 = .025

.0228

.0228

p-value
=.0228 + .0228 = .0456

-1.96
-2.0

1.96
2.0

27

Hypothesis Testing: Known

p-Value Approach
Compare the p-value with a
If p-value < a , reject Ho

If p-value a , do not reject Ho

Now p-value = .0456
a is chosen to be 0.05

a/2 = .025

a/2 = .025

.0228

.0228

Since .0456 < .05, reject Ho

-1.96
-2.0

1.96
2.0

Z
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Eg: p-value Approach

1.

If you use a 0.05 level of significance in a two-tail hypothesis test, what will
you decide if the computed value of the test statistic Z is +2.21?
a.
b.

2.

Use the critical value approach.

Use the p-value approach.

Suppose that in a two-tail hypothesis test, you compute the value of the test
statistic Z as -1.38. What is the p-value?
ANSWER

1a. Reject Ho as Z > 1.96

1b. p-value = 2 x (0.01355) = 0.0271
As p-value < 0.05, reject Ho.
2. If Z = -1.38, p-value = 2 x (0.08379) = 0.1676

29

Hypothesis Testing: Known

Confidence Interval Connections
For X = 2.84, = 0.8 and n = 100, the 95%

confidence interval is:

2.84 - (1.96)

0.8
to
100

2.84 (1.96)

0.8
100

2.6832 2.9968
Since this interval does not contain the hypothesized

mean (3.0), you reject the null hypothesis at a = .05

30

Hypothesis Testing: Known

One Tail Tests

In many cases, the region of rejection is located in one

end of the distribution.

In other words, H1 is focused on one direction only.

There is only one region of rejection, whose area is .

H0: 3

H1: < 3
H0: 3

H1: > 3

This is a lower-tail test as H1 is focused

on the lower tail below the mean of 3.
This is an upper-tail test as H1 is focused
on the upper tail above the mean of 3.
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Eg: Upper Tail Tests

There is only one critical

value, since the rejection

area is in only one tail.

Reject Ho

Do not reject Ho

Critical value

Similarly, by identifying the correct critical value, you

can construct one-sided confidence intervals.

Eg: For an upper tail test, an upper limit.
32

Eg: Phone Bill

A phone industry manager thinks that customer monthly cell phone
bills have increased, now averaging more than $52 per month.
The company wishes to test this claim. Past company records indicate
that= $10.

Form hypothesis:
H0: 52

the mean is less than or equal to $52 per month

H1: > 52

the mean is greater than $52 per month

(i.e., sufficient evidence exists to support the managers claim)

33

Eg: Phone Bill

Suppose that a = .10 is chosen for this test.
Find the rejection region:
Reject H0

1-a = .90

a = .10

Do not reject H0

Reject H0

34

Eg: Phone Bill

Check the critical value:

.90

.10
Z

a = .10
.90

.07

.08

.09

1.1 .8790 .8810 .8830

1.2 .8980 .8997 .9015

0 1.28

1.3 .9147 .9162 .9177

Critical Value
= 1.28
35

Eg: Phone Bill

Sample information: n = 64, X = 53.1
=10 was known from past company records

Compute the test statistic:

X
53.1 52
Z

0.88

10
n
64

36

Eg: Phone Bill

Decision: Do not reject Ho since Z = 0.88 1.28

I.e., There is not sufficient evidence that the mean bill is greater than $52.
Reject H0
1-a = .90

a = .10

1.28
Z = .88

Now, use the p-value approach to solve the problem.

37

Hypothesis
Testing:
Unknown

38

Hypothesis Testing: Unknown

If the population standard deviation is unknown, simply replace

it by the sample standard deviation S.

Because of this change, you use the t distribution to test Ho.

Check t-table (given and df = n-1).

All other steps, concepts are the same.

Reminder:
As in the confidence interval chapter, when t-distribution is

used, assume the population is approximately normal.

No need to have n > 30 if we assume a normal population.

39

Hypothesis Testing: Unknown

Recall that the t test statistic with n-1

degrees of freedom is:

t n -1

S
n

40

Eg: Price Watch

The mean cost of a hotel room in New York City is said to be
$168 per night. A random sample of 25 hotels resulted in
X = $172.50 and S = 15.40. Test at the a = 0.05 level.
(A stem-and-leaf display shows the data are approx. normally distributed )

Ho: = 168
H1: 168

41

Eg: Price Watch

H0: = 168
H1: 168

= 0.05

n = 25

is unknown, so use
a t-statistic

Critical Value:
t24 = 2.0639

Determine the regions of rejection

/2=.025

/2=.025

Reject H0

-t n-1,/2

-2.0639

Do not reject H0

Reject H0

t n-1,/2

2.0639

42

Eg: Price Watch

t n 1

a/2=.025

X
172.50 168

1.46
S
15.40
n
25

a/2=.025

-t n-1,/2

-2.0639

t n-1,/2
1.46

2.0639

Conclusion: Do not reject Ho.

There is not sufficient evidence that true mean cost is different from $168
43

Hypothesis Testing:
Connection to Confidence Intervals
For X = 172.5, S = 15.40 and n = 25, the 95%

confidence interval is:

172.5 - (2.0639)

15.4
15.4
to 172.5 (2.0639)
25
25

166.14 178.86
Since this interval contains the hypothesized

mean of 168, you do not reject the null

hypothesis at a = .05
44

Hypothesis Testing: Unknown

It is assumed that the sample statistic comes from

a random sample of a normal distribution.

If the sample size is small (< 30), you should use

a histogram to check the normality assumption.

If the sample size is large, the central limit

theorem applies.

45

Testing
Proportion

46

Hypothesis Testing
Proportions
Involves categorical variables
Two possible outcomes
Success (possesses a certain characteristic)
Failure (does not possesses that characteristic)

Fraction or proportion of the population in

the success category is denoted by

47

Hypothesis Testing
Proportions
Sample proportion in the success category is denoted by p

X
number of successes in sample
p

n
sample size
When both n and n(1-) are at least 5, p can be

approximated by a normal distribution with mean and

standard deviation

(1 )
n

48

Hypothesis Testing
Proportions
The sampling distribution of proportion (p)

is approximately normal, so the test statistic

is a Z value:
Z

p
(1 )
n

49

Eg: Testing Proportion

A marketing company claims that it receives 8%

responses from its mailing.

To test this claim, a random sample of 500 were

surveyed with 30 responses.

Test at the a = .05 significance level.

First, check:
n = (500)(.08) = 40
n(1-) = (500)(.92) = 460

50

Eg: Testing Proportion

H0: = .08

H1: .08

= .05

Determine region of rejection

Reject

Reject

n = 500, p = .06

Critical Values: 1.96

.025

.025

-1.96

z
1.96

51

Eg: Test for Proportion

Of a sample of 899 home-based businesses, 369 are

owned by females. Want to test if = 0.50.

ANSWER

Sample proportion p = 369/899, n = 899.

Ho: = 0.50; H1: 0.50

Test statistic Z = -5.37

At a = 5%, critical values = 1.96.
Ho is rejected by the sample evidence.

52

Eg: Testing Proportion

Test Statistic:
Z

(1 )
n

Decision:

.06 .08
1.648
.08(1 .08)
500

Do not reject Ho at a = .05

Conclusion:
.025

.025
-1.96

z
1.96

There isnt sufficient

evidence to reject the
companys claim of 8%
response rate.

-1.646
53

Potential Pitfalls and

Ethical Considerations
Use randomly collected data to reduce selection biases
No human subjects without informed consent
Choose the level of significance, , before data collection

Do not employ data snooping to choose between one-tail

and two-tail test, or to determine the level of significance

Do not practice data cleansing to hide observations that do
not support a stated hypothesis
Report all pertinent findings

54

Z or t?
Population Mean ()
Z: samp dist normally distributed if is known

t: use t-distribution if is unknown

Need to assume normal population. But n > 30 is

also acceptable.

Population Proportion ()
Z: binomial approximated by normal dist

55

More Examples

56

Eg: Mean Waiting Time

Has the mean waiting time in a fast-food restaurant

has changed from its previous value of 4.5 minutes?

Past experience shows that the population is normally
distributed, with a population standard deviation of
1.2 minutes.
A sample of 25 orders is selected. The sample mean
is 5.1 minutes.
The level of significance (a) is 0.05

57

Cont: Critical Value Approach

H0: = 4.5

a = .05

H1: 4.5

Sample size n = 25
Determine the appropriate technique
The population is normal and is known ( = 1.2) so this is a Z test

Set up the critical values

For a = .05 the critical Z values are 1.96

Compute the test statistic based on the sample data:

X
5 .1 4 .5

2.50

1.2
n
25
58

Cont: Critical Value Approach

Decision: Is the test statistic in the rejection region?
a= 0.05

Decision Rule

Upper-tail area = 0.025

a /2

Reject Ho if
Z < -1.96 or Z > 1.96;
otherwise do not reject.

Reject H0

Do not reject H0

-Z /2 = -1.96

Reject H0

+Z/2 = +1.96

Here, Z = 2.50 > 1.96, so the test statistic is

in the rejection region

59

Cont: p-Value Approach

Use the p-value approach to solve the mean waiting time

problem.
Again we compute the test statistic of 2.50.
Probability (test statistic 2.50) = ______
1-0.9938 = 0.0062
The p-value for this two-tail test =2______
x 0.0062 = 0.0124
Decision rule: p < a, reject Ho.
chosen at 0.05

GRAPH:

60

Eg: Mean Monthly Sales

Want to test if average monthly sales is $120.
Suppose a = 0.05,
X = $112.85, n = 12 and s = $20.80.
ANSWER
Answer

Test statistic t = (X ) / (s/ n) = -1.19.

Critical values: t0.025, 11 = 2.2010.

The test statistic falls in the region of nonrejection.

Do not reject Ho. We dont have enough evidence to reject the claim.

Caution: Do not say accept Ho.

How about the p-value approach?

61

Review Questions

Level of significance
True or False? level of significance = = confidence level

Types of error
In hypothesis testing if the null hypothesis has been rejected when the
alternative hypothesis has been true, which error has been committed?

Setting hypotheses
The manager of an automobile dealership is considering a new bonus
plan in order to increase sales. Currently, the mean sales rate per
salesperson is five automobiles per month. The correct set of
hypotheses for testing the effect of the bonus plan is ____

p-value approach
A two-tailed test is performed at 95% confidence. The p-value is 0.09.
What is the decision?

Review Questions: Testing

A random sample of 16 statistics examinations from a large population

was taken.
The average score in the sample was 78.6 with a standard deviation of
8.0.
Want to know if the average grade of the population is significantly more
than 75.
Assume the distribution of the population of grades is normal.

Is it a two-tailed test?

Do you use Z- or t- test?

Compute the test statistic

The p-value is between ___

Review Questions: Testing

A random sample of 100 people was taken.

85 of the people in the sample favored Candidate A.
Want to find out whether or not the proportion of the
population in favor of Candidate A is significantly more
than 80%.
Set up the hypotheses.
What is the test statistic and the p-value?