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Distribution of X -- the determination of the type of hypothesis test or confidence interval used
If X is normal and is known, then X is normal
If X is normal and is unknown, then X has a t-distribution
Even if X is not normal, if is known X is approximately normal if n is large*
Even if X is not normal, if is unknown X has approximately a t-distribution if n is
large*
*( This is the Central Limit Theorem)
s
If is unknown: t-intervals: t/2,n-1 (Standard Error) = t /2 ,n 1 *
n
*( z/2 means the z-value that puts probability /2 to the right of this z-value;
t/2,n-1 means the t-value that puts /2 to the right of this t-value with n-1
degrees of freedom)
Calculating Correct Sample Sizes to Meet a Specific Margin of Error (E) (with and given)
1. Set z /2 = E.
n
2. Then n = z /2 -- Solve for n
E
3. n = ( n )2 --- most likely this will give a number with a decimal --- ROUND UP!
Hypothesis Tests Basic Idea
You are satisfied (you prove that) > v if x is a lot greater than v.
You are satisfied (you prove that) < v if x is a lot less than v.
You are satisfied (you prove that) v if x is a lot different from v (higher or lower).
The Hypotheses
Null Hypothesis: H0: = v
Alternate Hypothesis: HA: > v OR < v OR v
What you are trying to show is the alternate hypothesis. You must get strong
evidence to show this is true. The null hypothesis is the one you cannot reject unless
you get strong evidence to the contrary.
Level of Significance the risk you are willing to take of concluding HA is true when its not*
This is . We assign this.
*(This is called a TYPE I Error)
xv
Form of the Test Statistic (z or t) -- how many standard errors x is from v:
Standard Error
xv xv
z t
For z-tests, , For t-tests, s
n n
Calculating the probability of not concluding HA is true when it is* for a given true value of
*(This is called a TYPE II error)
x x
1. Express the test in terms of . For a > test: Accept HA if > v + z n = xcrit
x crit
2. For a > test Find z for the given value of : z = . is the area to the left of
n
z.
EXCEL APPROACHES
Must be sampling from a normal distribution or take a large sample
Use z with known and t with unknown
z-intervals
1. Calculate x by: =AVERAGE(of the column of xs)
2. Calculate the Margin of Error by: =CONFIDENCE(, , n)
3. LCL: x - Margin of Error UCL: x + Margin of Error
t-intervals
1. Go to Data Analysis/Descriptive Statistics Input Range: (The column of xs)
Check Summary Statistics and Confidence Level for Mean
2. From output LCL: Mean Confidence UCL: Mean + Confidence