LARGE SAMPLE TESTS

INTRODUCTION:-

Sampling theory deals with two types of

problem, i.e. Estimation and Testing of Hypothesis.
Testing of Hypothesis was initiated by J.Neyman and
E.S.Pearson. It employs statistical techniques to arrive
at decisions in certain situation where there is an
element of uncertainty on the basis of sample whose
size is fixed in advance.

HYPOTHESIS:-
A Hypothesis is a statement about the
population parameter.

TEST OF HYPOTHESIS:-
The Testing of Hypothesis is a procedure
that helps us to ascertain the likelihood of hypothesized
population parameter being correct by making use of the
sample statistics. In other words, it is a process of
testing of significance which concerns with the testing of
some hypothesis regarding a parameter of the
population on the basis of statistics from the sample.
LARGE SAMPLE TEST :-
If the size of the sample is greater than
30(n>30), the sample is said to be large.
The study of large samples can be
performed on the basis of its qualitative characteristics:

1) STUDY OF SAMPLING OF VARIABLES

 2) STUDY OF SAMPLING OF ATTRIBUTE

TEST OF SIGNIFICANCE FOR VARIABLES

The various test of significance for variables
can be studied under the following heads :
 TEST OF SIGNIFICANCE FOR A SINGLE
MEAN :-

Suppose a random sample of size n is

drawn from a large population. Suppose the mean of
the sample is . If we want to test the hypothesis that
population mean is µ0 i.e. H0:µ=µ0.
The main objective of test of significance for a single
mean are three:-
1) To test if the mean of the population has a
specified value µ0,i.e. µ=µ0.

2) To test whether the sample mean differs

significantly from the hypothetical value of
population mean, i.e. difference between and
µ.

3) To test whether the given random sample has

been drawn from a population with specified
mean µ0 and variance 2.
WORKING RULE :-

STEP 1:- SETTING UP OF A NULL

HYPOTHESIS :

The null hypothesis is set up in

following form: “There is no significance difference
between the sample mean and population mean” or the
sample has been drawn from the parent population.
Mathematically,

Null Hypothesis H0: = µ.

Alternative Hypothesis H1: ≠ µ.

STEP 2:- COMPUTATION OF TEST STATISTIC

Z:

There are two ways of computing a test

statistic Z.

a)When the standard deviation of population is

known.
 STANDARD ERROR OF MEAN = S.E.( )= ,

Where n =sample size, =s.d. of population

TEST STATISTIC Z = =

Where is the sample mean.

b)Where the standard deviation of population is

not known.

STANDARD ERROR OF MEAN = S.E. ( ) S=

TEST STATISTIC Z = =

STEP 3 :- LEVEL OF SIGNIFICANCE :-

Set the level of significance .

STEP 4:- CRITICAL VALUE :-

 Find the critical value of Z at the
level of significance (of step 3), from the table “ Areas
under the normal curve- values”.

STEP 5:- DECISION :-

a) If the computed value of Z = |Z|< critical value
at a level of significance , then accept the null
hypothesis.

b) If the computed value of Z = |Z|> critical value

at a level of significance , then reject the null
hypothesis H0 and accept the alternative
hypothesis H1.

 TEST OF SIGNIFICANCE FOR A

DIFFERENCE BETWEEN TWO MEANS

Let A and B be two population with

means µ1 and µ2 and variances 2 and 2 respectively.
Let us take two independent samples of size n1 and n2
from these two populations. Let 1 and 2 be the
corresponding sample means. Then our problem is
 1) To test the equality of two population means,i.e.
to test whether µ1= µ2. Or
2) To test the significance of the difference between
two independent sample means i.e. 1- 2.
Following are the steps:-
STEP 1:- NULL HYPOTHESIS :

The null hypothesis is set in any one of the

following forms.
H0:µ1= µ2 , i.e. the two samples have been drawn
from different populations having the same means and
equal standard deviation or,
H0: 1= 2 , i.e. the two samples have been drawn
from the same parent population.

ALTERNATIVE HYPOTHESIS:
H: µ1 µ2 (Two tailed test) or
H1: µ1<µ2 or H1: µ1>µ2 (One tailed test)

STEP 2 :- COMPUTATION OF TEST

STATISIC:
 We have the following two cases:

Case 1:- When the population standard

deviations and are known.
In this case we have,
STANDARD ERROR OF DIFFERENCE OF MEANS S.E. ( 1-

)=
2.

Case 2:- When the population standard deviations

and are not known.

In this case we are given sample standard

deviations s1 and s2 and we calculate the S.E. of
difference of means by the formula.
STANDARD ERRORS OF DIFFERENCE OF MEANS

S.E. ( 1- 2. )=

The other three steps such as (1) LEVEL

OF SIGNIFICANCE; (2) CRITICAL VALUE ; (3)
DECISION MAKING FOR TESTING THE
SIGNIFICANCE OF THE DIFFERENCE BETWEEN
TWO MEANS are the same as those given in testing the
significance of a mean.
 TEST OF SIGNIFICANCE FOR
ATTRIBUTES

The various test of significance for

attributes can be studied under the following heads :

 TEST OF SIGNIFICANCE FOR SAMPLE

PROPORTION :-

We are sometimes interested in testing

whether the proportion of success is significant or not?
For testing this we adopt the same procedure with slight
modification in calculation of S.E. of proportion. Here,
we divide the number of success and failure by n to
obtain proportion of success and failure.
WORKING RULE:-

STEP 1:- NULL HYPOTHESIS :

The sample has been drawn from a
population with population proportion P, i.e., H0:P=P,
where P0 is a particular value of P.
ALTERNATIVE HYPOTHESIS : H1:P P0 (Two
tailed test)

STEP 2 :- SELECTION OF TEST STATISTIC :

STANDARD ERROR OF PROPORTION = S.E.(p) =

Where n is the sample size and P is population

proportion.
OR
STANDARD ERROR OF PERCENTAGE = S.E.(p) =

Where P = population percentage and n is a sample

size

TEST STATISTIC Z =
Where p = sample proportion or percentage
The other steps such as (1) LEVEL OF
SIGNIFICANCE; (2) CRITICAL VALUE OF Z; (3)
DECISION MAKING are the same as those given in
testing the significance of a sample mean.

 TEST OF SIGNIFICANCE OF DIFFERENCE

BETWEEN TWO SAMPLE PROPORTION :-

In case two samples are drawn from

different population, one may like test the significance of
a difference between the proportion of success. If p1 and
p2 are observed proportions of successes in the two
independent large samples of n1 and n2 from the
population A and B and x1 and x2 be the observed
number of successes (number of units possessing the
given attribute), then,

p1 = and p2 =
WORKING RULE:-

STEP 1:- NULL HYPOTHESIS :

The two samples have been drawn from
the same population, i.e., H0:P1=P2.

ALTERNATIVE HYPOTHESIS : H1:P1 P2 .

STEP 2 :- COMPUTATION OF TEST STATISIC :

We have the following two cases:
Case 1: When the population proportion P1 and
P2 are known.
In this case Q1= 1-P1, Q2= 1-P2 and p1 and p2
are sample proportion.

STANDARD ERROR OF DIFFERENCE S.E.(p1-p2)

TEST STATISTIC Z =
 Case 2 : When the population proportion P1 and
P2 are not known but sample proportion P1 and P2 are
known.
In this case we have two methods to
estimate P1 and P2 .
a) METHOD OF SUBSTITUTION :-

In this method p1 and p2 are substituted for

P1 and P2.

S.E. = STANDARD ERROR OF DIFFERENCE S.E.( p1-

p2) =

TEST STATISTIC Z =

The other steps such as (1) LEVEL OF

SIGNIFICANCE; (2) CRITICAL VALUE; (3) DECISION
in respect of testing the significance of difference of two
proportions are the same as those given in testing the
significance of a sample means.

b) METHOD OF POOLING :-
 In this method the estimated value for the
two population proportions is obtained by pooling the
two samole proportion p1 and p2 into a single proportion
p.
SAMPLE PROPORTION OF TWO SAMPLES =

p=

so that q= 1-p

STANDARD ERROR OF DIFFERENCES S.E.( p1 -

p2) =

Where n1 and n2 are size of two samples.

TEST STATISTIC Z =

The other steps such as (1) LEVEL OF

SIGNIFICANCE; (2) CRITICAL VALUE OF Z AT ; (3)
DECISION MAKING in respect of testing the
significance of difference of two proportions are the
same as those given in testing the difference of sample
means.

BIBLIOGRAPHY

1) FUNDAMENTAL OF STATISTICS – S.C.

SRIVASTAVA AND SANGYA SRIVASTAVA

2) C.A. FOUNDATION COURSE STATISTICS – P.N.

ARORA AND S. ARORA