Statistics for Nursing

GTNI

Chapter 5

Hypothesis Testing

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc.

 Chapter Goals
After completing this chapter, you should be
able to:
◼ Formulate null and alternative hypotheses for
applications involving
◼ a single population mean from a normal distribution
◼ Formulate a decision rule for testing a hypothesis
◼ Know how to use the critical value and p-value
approaches to test the null hypothesis
◼ Know what Type I and Type II errors are

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc.

 What is a Hypothesis?
◼ A hypothesis is a claim
(assumption) about a
population parameter:

◼ population mean
Example: The mean monthly cell phone bill
of this city is μ = $42
◼ population proportion
Example: The proportion of adults in this
city with cell phones is p = .68
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-3
 The Null Hypothesis, H0

◼ States the assumption (numerical) to be

tested
Example: The average number of TV sets in
U.S. Homes is equal to three ( H0 : μ = 3 )

◼ Is always about a population parameter,

not about a sample statistic

H0 : μ = 3 H0 : X = 3

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-4
 The Null Hypothesis, H0
(continued)

◼ Begin with the assumption that the null

hypothesis is true
◼ Similar to the notion of innocent until

proven guilty
◼ Refers to the status quo
◼ Always contains “=” , “≤” or “” sign
◼ May or may not be rejected

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-5
 The Alternative Hypothesis, H1
◼ Is the opposite of the null hypothesis
◼ e.g., The average number of TV sets in U.S.
homes is not equal to 3 ( H1: μ ≠ 3 )
◼ Challenges the status quo
◼ Never contains the “=” , “≤” or “” sign
◼ May or may not be supported
◼ Is generally the hypothesis that the
researcher is trying to support

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-6
 Hypothesis Testing Process

Claim: the
population
mean age is 50.
(Null Hypothesis:
Population
H0: μ = 50 )
Now select a
random sample
Is X= 20 likely if μ = 50?
If not likely, Suppose
the sample
REJECT mean age Sample
Null Hypothesis is 20: X = 20
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc.
 Reason for Rejecting H0
Sampling Distribution of X

X
20 μ = 50
If H0 is true
... then we
If it is unlikely that
reject the null
we would get a
... if in fact this were hypothesis that
sample mean of
the population mean… μ = 50.
this value ...
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-8
 Level of Significance, 

◼ Defines the unlikely values of the sample

statistic if the null hypothesis is true
◼ Defines rejection region of the sampling
distribution
◼ Is designated by  , (level of significance)
◼ Typical values are .01, .05, or .10
◼ Is selected by the researcher at the beginning
◼ Provides the critical value(s) of the test

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-9
 Level of Significance
and the Rejection Region
Level of significance =  Represents
critical value
H0: μ = 3 /2 /2
H1: μ ≠ 3 Rejection
Two-tail test 0 region is
shaded
H0: μ ≤ 3 
H1: μ > 3
Upper-tail test 0

H0: μ ≥ 3

H1: μ < 3
Lower-tail test 0
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-10
 How to make a decision

◼ Choose the right test

◼ Calculate the p-value

◼ Decision rule: compare the p-value to 

◼ If p-value <  , reject H0

◼ If p-value   , do not reject H0

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-11
 Errors in Making Decisions

◼ Type I Error
◼ Reject a true null hypothesis

◼ Considered a serious type of error

The probability of Type I Error is 

◼ Called level of significance of the test
◼ Set by researcher in advance

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-12
 Errors in Making Decisions
(continued)

◼ Type II Error
◼ Fail to reject a false null hypothesis

The probability of Type II Error is β

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-13
 Outcomes and Probabilities

Possible Hypothesis Test Outcomes

Actual Situation
Decision H0 True H0 False
Do Not
No error Type II Error
Reject
Key: (1 -  ) (β)
Outcome H0
(Probability) Reject Type I Error No Error
H0 () (1-β)

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-14
 Type I & II Error Relationship

▪ Type I and Type II errors can not happen at

the same time
▪ Type I error can only occur if H0 is true
▪ Type II error can only occur if H0 is false

If Type I error probability (  ) , then

Type II error probability ( β )

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-15
 Hypothesis Tests for the Mean

Hypothesis
Tests for 

 Known  Unknown

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-16
 Test of Hypothesis
for the Mean (σ Known)
◼ Convert sample result ( x ) to a z value
Hypothesis
Tests for 

σ Known σ Unknown

Consider the test

H0 : μ = μ0 The decision rule is:
H1 : μ  μ0 x − μ0
Reject H0 if z =  zα
σ
(Assume the population is normal) n
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-17
 Decision Rule
H0: μ = μ0
x − μ0
Reject H0 if z =  zα H1: μ > μ0
σ
n

Alternate rule:
Reject H0 if X  μ0 + Z ασ/ n 

Do not reject H0 Reject H0

Z 0 zα
σ
x μ0 μ0 + z α
n

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc.

Critical valueChap 10-18
 p-Value Approach to Testing

◼ p-value: Probability of obtaining a test

statistic more extreme ( ≤ or  ) than the
observed sample value given H0 is true
◼ Also called observed level of significance

◼ Smallest value of  for which H0 can be

rejected

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-19
 p-Value Approach to Testing
(continued)
◼ Convert sample result (e.g., x ) to test statistic (e.g., z
statistic )
◼ Obtain the p-value x - μ0
◼ For an upper
p - value = P(Z  , given that H0 is true)
σ/ n
tail test:
x - μ0
= P(Z  | μ = μ0 )
σ/ n

◼ Decision rule: compare the p-value to 

◼ If p-value <  , reject H0

◼ If p-value   , do not reject H0
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-20
 Example: Upper-Tail Z Test
for Mean ( Known)
A phone industry manager thinks that
customer monthly cell phone bill have
increased, and now average over $52 per
month. The company wishes to test this
claim. (Assume  = 10 is known)

Form hypothesis test:

H0: μ ≤ 52 the average is not over $52 per month
H1: μ > 52 the average is greater than $52 per month
(i.e., sufficient evidence exists to support the
manager’s claim)

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-21
 Example: Find Rejection Region
(continued)
◼ Suppose that  = .10 is chosen for this test

Find the rejection region: Reject H0

 = .10

Do not reject H0 Reject H0

0 1.28

x − μ0
Reject H0 if z =  1.28
σ/ n
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-22
 Example: Sample Results
(continued)

Obtain sample and compute the test statistic

Suppose a sample is taken with the following

results: n = 64, x = 53.1 (=10 was assumed known)
◼ Using the sample results,

x − μ0 53.1 − 52
z= = = 0.88
σ 10
n 64
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-23
 Example: Decision
(continued)
Reach a decision and interpret the result:
Reject H0

 = .10

Do not reject H0 Reject H0

1.28
0
z = 0.88

Do not reject H0 since z = 0.88 < 1.28

i.e.: there is not sufficient evidence that the
mean bill is over $52
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-24
 Example: p-Value Solution
(continued)
Calculate the p-value and compare to 
(assuming that μ = 52.0)
p-value = .1894
P( x  53.1| μ = 52.0)
Reject H0
 = .10 53.1 − 52.0 

= P z  
 10/ 64 
0
Do not reject H0
1.28
Reject H0
= P(z  0.88) = 1− .8106
Z = .88
= .1894

Do not reject H0 since p-value = .1894 >  = .10

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-25
 One-Tail Tests

◼ In many cases, the alternative hypothesis

focuses on one particular direction

H0: μ ≤ 3 This is an upper-tail test since the

alternative hypothesis is focused on
H1: μ > 3
the upper tail above the mean of 3

This is a lower-tail test since the

H0: μ ≥ 3
alternative hypothesis is focused on
H1: μ < 3 the lower tail below the mean of 3

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-26
 Upper-Tail Tests

◼ There is only one H0: μ ≤ 3

critical value, since H1: μ > 3
the rejection area is
in only one tail 

Do not reject H0 Reject H0

Z 0 zα
x μ

Critical value

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-27
 Lower-Tail Tests
H0: μ ≥ 3
◼ There is only one H1: μ < 3
critical value, since
the rejection area is
in only one tail 

Reject H0 Do not reject H0

-z 0 Z

μ x
Critical value

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-28
 Two-Tail Tests
◼ In some settings, the H0: μ = 3
alternative hypothesis does
H1: μ  3
not specify a unique direction

/2 /2
◼ There are two
critical values,
3 x
defining the two
Reject H0 Do not reject H0 Reject H0
regions of
-z/2 0 +z/2 z
rejection
Lower Upper
critical value critical value
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-29
 Hypothesis Testing Example
Test the claim that the true mean # of TV
sets in US homes is equal to 3.
(Assume σ = 0.8)
◼ State the appropriate null and alternative
hypotheses
◼ H0: μ = 3 , H1: μ ≠ 3 (This is a two tailed test)
◼ Specify the desired level of significance
◼ Suppose that  = .05 is chosen for this test

◼ Choose a sample size

◼ Suppose a sample of size n = 100 is selected

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-30
 Hypothesis Testing Example
(continued)

◼ Determine the appropriate technique

◼ σ is known so this is a z test

◼ Set up the critical values

◼ For  = .05 the critical z values are ±1.96

◼ Collect the data and compute the test statistic

◼ Suppose the sample results are

n = 100, x = 2.84 (σ = 0.8 is assumed known)

So the test statistic is:
X − μ0 2.84 − 3 − .16
z = = = = −2.0
σ 0.8 .08
n 100
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-31
 Hypothesis Testing Example
(continued)

◼ Is the test statistic in the rejection region?

Reject H0 if  = .05/2  = .05/2

z < -1.96 or
z > 1.96;
otherwise Reject H0 Do not reject H0 Reject H0

do not -z = -1.96 0 +z = +1.96

reject H0

Here, z = -2.0 < -1.96, so the

test statistic is in the rejection
region
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-32
 Hypothesis Testing Example
(continued)
◼ Reach a decision and interpret the result

 = .05/2  = .05/2

Reject H0 Do not reject H0 Reject H0

-z = -1.96 0 +z = +1.96
-2.0
Since z = -2.0 < -1.96, we reject the null hypothesis
and conclude that there is sufficient evidence that the
mean number of TVs in US homes is not equal to 3
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-33
 Example: p-Value
◼ Example: How likely is it to see a sample mean of
2.84 (or something further from the mean, in either
direction) if the true mean is  = 3.0?

x = 2.84 is translated to
a z score of z = -2.0
P(z  −2.0) = .0228 /2 = .025 /2 = .025

.0228 .0228
P(z  2.0) = .0228

p-value
= .0228 + .0228 = .0456 -1.96 0 1.96 Z
-2.0 2.0
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-34
 Example: p-Value
(continued)
◼ Compare the p-value with 
◼ If p-value <  , reject H0
◼ If p-value   , do not reject H0

Here: p-value = .0456 /2 = .025 /2 = .025

 = .05
.0228 .0228
Since .0456 < .05, we
reject the null
hypothesis
-1.96 0 1.96 Z
-2.0 2.0
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-35
 t Test of Hypothesis for the Mean
(σ Unknown)
◼ Convert sample result ( x ) to a t test statistic
Hypothesis
Tests for 

σ Known σ Unknown

Consider the test

The decision rule is:
H0 : μ = μ0
x − μ0
H1 : μ  μ0 Reject H0 if t =  t n-1, α
s
(Assume the population is normal) n
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-36
 t Test of Hypothesis for the Mean
(σ Unknown)
(continued)
◼ For a two-tailed test:
Consider the test
H0 : μ = μ0 (Assume the population is normal,
and the population variance is
H1 : μ  μ0 unknown)

The decision rule is:

x − μ0 x − μ0
Reject H0 if t =  − t n-1, α/2 or if t =  t n-1, α/2
s s
n n

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-37
 Example: Two-Tail Test
( Unknown)

The average cost of a

hotel room in New York
is said to be $168 per
night. A random sample
of 25 hotels resulted in
x = $172.50 and H0: μ = 168
s = $15.40. Test at the H1: μ  168
 = 0.05 level.
(Assume the population distribution is normal)

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-38
 Example Solution:
Two-Tail Test

H0: μ = 168 /2=.025 /2=.025

H1: μ  168

◼  = 0.05 Reject H0 Do not reject H0 Reject H0

t n-1,α/2
-t n-1,α/2 0
◼ n = 25 -2.0639 1.46
2.0639
◼  is unknown, so x −μ 172.50 − 168
t n −1 = = = 1.46
use a t statistic s 15.40
n 25
◼ Critical Value:
t24 , .025 = ± 2.0639 Do not reject H0: not sufficient evidence that
true mean cost is different than $168

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-39
 Example

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-40
 Solution

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-41
 Solution

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 10-42
 Matched Pairs
Tests Means of 2 Related Populations
Matched ◼ Paired or matched samples
Pairs ◼ Repeated measures (before/after)
◼ Use difference between paired values:

di = xi - yi

◼ Assumptions:
◼ Both Populations Are Normally Distributed

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 11-43
 Test Statistic: Matched Pairs
The test statistic for the mean
Matched difference is a t value, with
Pairs n – 1 degrees of freedom:

d − D0
t=
sd
n
Where
D0 = hypothesized mean difference
sd = sample standard dev. of differences
n = the sample size (number of pairs)

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 11-44
 Decision Rules: Matched Pairs
Paired Samples
Lower-tail test: Upper-tail test: Two-tail test:
H0: μx – μy  0 H0: μx – μy ≤ 0 H0: μx – μy = 0
H1: μx – μy < 0 H1: μx – μy > 0 H1: μx – μy ≠ 0

  /2 /2

-t t -t/2 t/2

Reject H0 if t < -tn-1,  Reject H0 if t > tn-1,  Reject H0 if t < -tn-1 , /2
or t > tn-1 , /2
d − D0
t=
Where sd has n - 1 d.f.
n
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 11-45
 Matched Pairs Example
◼ Assume you send your salespeople to a “customer
service” training workshop. Has the training made a
difference in the number of complaints? You collect
the following data:

d = n
di
Number of Complaints: (2) - (1)
Salesperson Before (1) After (2) Difference, di
= - 4.2
C.B. 6 4 - 2
T.F. 20 6 -14
M.H. 3 2 - 1
Sd =
 i
(d − d ) 2

R.K. 0 0 0 n −1
M.O. 4 0 - 4
-21 = 5.67

Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 11-46
 Matched Pairs: Solution
◼ Has the training made a difference in the number of
complaints (at the  = 0.01 level)?
Reject Reject
H0: μx – μy = 0
H1: μx – μy  0
/2 /2
 = .01 d = - 4.2 - 4.604 4.604
- 1.66
Critical Value = ± 4.604
d.f. = n - 1 = 4
Decision: Do not reject H0
(t stat is not in the reject region)
Test Statistic:
Conclusion: There is not a
d − D 0 − 4.2 − 0
t= = = − 1.66 significant change in the
s d / n 5.67/ 5 number of complaints.
Statistics for Business and Economics, 6e © 2007 Pearson Education, Inc. Chap 11-47
 Key Concept
In Part 1 we discuss situations in which the standard
deviations of the two populations are unknown and are
not assumed to be equal.
In Part 2 we discuss two other situations: (1) The two
population standard deviations are both known; (2) the
two population standard deviations are unknown but are
assumed to be equal.
Because is typically unknown in real situations, most
attention should be given to the methods described in
Part 1.
 Part 1: Independent Samples
with σ1 and σ2 Unknown and Not
Assumed Equal
 Definitions

Two samples are independent if the sample values

selected from one population are not related to or
somehow paired or matched with the sample
values from the other population.
Two samples are dependent if the sample values
are paired. (That is, each pair of sample values
consists of two measurements from the same
subject (such as before/after data), or each pair of
sample values consists of matched pairs (such as
husband/wife data), where the matching is based
on some inherent relationship.)
 Example
Independent Samples:

Researchers investigated the reliability of test

assessment. On group consisted of 30 students who took
proctored tests. A second group consisted of 32 students
who took online tests without a proctor.

The two samples are independent, because the subjects

were not matched or paired in any way.
 Example
Dependent Samples:

Students of the author collected data consisting of the

heights (cm) of husbands and the heights (cm) of their
wives. Five of those pairs are listed below. The data are
dependent, because each height of each husband is
matched with the height of his wife.

Height of
175 180 173 176 178
Husband
Height of
160 165 163 162 166
Wife
 Notation
μ1 = population mean

σ1 = population standard deviation

n
x1 = size of the first sample
1

= sample mean

s1 = sample standard deviation

Corresponding notations apply to population 2.

 Requirements
1. σ1 and σ2 are unknown and no assumption is
made about the equality of σ1 and σ2.

2. The two samples are independent.

3. Both samples are simple random samples.

4. Either or both of these conditions are satisfied:

The two sample sizes are both large (over 30)

or both samples come from populations having
normal distributions.
Hypothesis Test for Two Means:
Independent Samples

( x1 − x2 ) − ( 1 − 2 )
t=
2 2
s s
1
+ 2
n1 n2

(where μ1 – μ2 is often assumed to be 0)

 Hypothesis Test

Test Statistic for Two Means: Independent Samples

Degrees of freedom: In this book we use this simple and

conservative estimate: df = smaller of
n1 – 1 or n2 – 1.
P-values: Refer to Table A-3. Use the procedure
summarized in Figure 8-4.
Critical values: Refer to Table A-3.
The exact formula for the
degrees of freedom
 Caution

Before conducting a hypothesis test, consider

the context of the data, the source of the data,
the sampling method, and explore the data with
graphs and descriptive statistics.
Be sure to verify that the requirements are
satisfied.
 Example

Researchers conducted trials to investigate the

effects of color on creativity.
Subjects with a red background were asked to
think of creative uses for a brick; other subjects
with a blue background were given the same
task.

Responses were given by a panel of judges.

Researchers make the claim that “blue

enhances performance on a creative task”.
 Example

Requirement check:

1. The values of the two population standard

deviations are unknown and assumed not
equal.
2. The subject groups are independent.
3. The samples are simple random samples.
4. Both sample sizes exceed 30.

The requirements are all satisfied.

 Example

The data:
Creativity
Scores
Red
Background
n = 35 x = 3.39 s = 0.97

Blue
n = 36 x = 3.97 s = 0.63
Background
 Example

Step 1: The claim that “blue enhances

performance on a creative task” can be restated
as “people with a blue background (group 2)
have a higher mean creativity score than those
in the group with a red background (group 1)”.
This can be expressed as μ1 < μ2.

Step 2: If the original claim is false, then μ1 ≥

μ 2.
 Example

Step 3: The hypotheses can be written as:

H 0 : 1 =  2
H1 : 1   2

Step 4: The significance level is α = 0.05.

Step 5: Because we have two independent

samples and we are testing a claim about two
population means, we use a t distribution.
 Example
Step 6: Calculate the test statistic

( x1 − x2 ) − ( 1 − 2 )
t=
2 2
s s
+ 1 2
n1 n2
(3.39 − 3.97) − 0
= = −2.979
2 2
0.97 0.63
+
35 36
 Example
Step 6: Because we are using a t distribution,
the critical value of t = –2.441 is found from
Table A-3. We use 34 degrees of freedom.
 Example

Step 7: Because the test statistic does fall in

the critical region, we reject the null hypothesis
μ1 – μ2.

P-Value Method: Technology will provide a P-

value, and the area to the left of the test statistic
of t = –2.979 is 0.0021. Since this is less than
the significance level of 0.01, we reject the null
hypothesis.
 Example

There is sufficient evidence to support the claim

that the red background group has a lower
mean creativity score than the blue background
group.
 Part 2: Alternative Methods

These methods are rarely used in practice because the

underlying assumptions are usually not met.

1. The two population standard deviations are both

known – the test statistic will be a z instead of a t
and use the standard normal model.
2. The two population standard deviations are
unknown but assumed to be equal – pool the
sample variances.
 Hypothesis Test for Two Means: Independent
Samples with σ1 and σ2 Known
The test statistic will be:

( x1 − x2 ) − ( 1 − 2 )
z=
 12  22
+
n1 n2

P-values and critical values are found using technology

or Table A-2. Both methods use the standard normal
model.
 Example

A manager of a large grocery store chain believes that happy employees are
more productive than unhappy ones. He randomly samples 60 of his grocery
checkout clerks and classifies them into one of two groups: those who smile a
lot (Group 1) and those who don’t (Group 2). After sorting the random sample,
there just happens to be 30 in each group.
He then examines their productivity scores (based on how quickly and
accurately they’re able to assist customers) and gets the following data for
each group:
Group 1 score mean: 33.3
Group 2 score mean: 14.4
The population of productivity scores is normally distributed with a standard
deviation of 17.32, which is assumed to be the population standard deviation
that applies both to Group 1 and Group 2.
Conduct an appropriate test to see whether a difference in productivity levels
exists between the two groups among all employees, using α = 0.05.
 Solution

• The critical value for the Z-test is 1.645

• The test statistic for this data is z=4.2263
• The right decision is Reject th null hypothesis because
z> 1.645
• There is enough evidence to reject the null and
accept the alternative