Two-Sample Tests of Hypothesis

Chapter 11

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Learning Objectives
LO11-1 Test a hypothesis that two independent
population means are equal, assuming that
the population standard deviations are known
and equal
LO11-2 Test a hypothesis that two independent
population means are equal, with
unknown population standard deviations
LO11-3 Test a hypothesis about the mean
population difference between paired or
dependent observations
LO11-4 Explain the difference between
dependent and independent samples
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Comparing Two Population Means
 In comparing two populations, we wish to know whether their
means could be equal
 We are investigating whether the distribution of the difference
between the means could have a mean of 0

Examples
 Is there a difference in the mean value of residential real estate
sold by male agents and female agents in south Florida?
 Is there an increase in the production rate after music is piped
into the production area?
 Is there a difference in the mean number of defects produced
on the day and the afternoon shifts at Kimble Products?
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Comparing Two Population Means (2 of 2)
 We can use the following formula to compute z if the
following conditions are met
 The two populations follow normal distributions
 The samples are from independent (unrelated)
populations
 The population standard deviations are known

 In the z formula, xത1- xത2, is the difference in the sample

means and the square root of the variance found with
formula 11-1 is the standard deviation

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Comparing Two Population Means Example

Customers at the FoodTown Supermarket have a choice when paying for their
groceries. They may check out and pay using the standard cashier-assisted checkout
or they may use the new Fast Lane procedure (self-checkout). The store manager
would like to know if the mean checkout time using the standard checkout method
is longer than using the Fast Lane. The time was measured from when the customer
enters the line until all his or her bags are in the cart.

Step 1: State the null and alternate hypothesis

H0: µS ≤ µU
H1: µS > µU
Step 2: Select the level of significance; we decide to use .01
Step 3: Determine the test statistic; we’ll use z

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Comparing Two Population Means Example
(2 of 3)
Step 4: Formulate the decision rule, Reject H0 if z > 2.326

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Comparing Two Population Means Example
(3 of 3)

Step 5: Make the decision regarding H0. FoodTown randomly selected 50

customers using the standard checkout and computed a mean time of 5.5 minutes
and randomly selected 100 customers using the Fast Lane and computed a mean
time of 5.3 minutes. We will reject the null hypothesis.

The test statistic of 3.123 is greater than our critical value of

2.326. Therefore, our decision is to reject the null hypothesis.

Step 6: Interpret the result. The difference of .20 minute is too large to have
occurred by chance. We conclude the Fast Lane method is faster.

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Compare Two Means Using t
 There are two major differences in this test and the test
just described in this chapter
 We assume the sampled populations have equal but
unknown standard deviations
 We use the t distribution
 The three requirements for the test:
 The sampled populations are approximately normally
distributed
 The sampled populations are independent
 The standard deviations of the two populations are
equal
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Compare Two Means Using t (2 of 2)
 Finding the value of t requires two steps
 The first step is to pool the standard deviations according
to the following formula

 The value of t is computed from the following formula

 The degrees of freedom for the test are n1 + n2 − 2

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Two-Sample Pooled Test Example
Owens Lawn Care Inc. manufactures and assembles lawnmowers that are shipped to
dealers throughout the United States and Canada. Two different procedures have
been proposed for mounting the engine on the frame of the lawnmower, the Welles
method and the Atkins method. The question is, is there a difference in the methods’
mean time to mount the engines on the frames of the lawnmowers?
A time and motion study is conducted to evaluate.

Step 1: State the null and alternate hypothesis

H0: µW = µA
H1: µW ≠ µA

Step 2: Select the level of significance; we decide to use .10

Step 3: Determine the test statistic; we’ll use t

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Two-Sample Pooled Test Example
Continued
Step 4: Formulate the decision rule, do not reject H0 if t falls between −1.833 and 1.833

Step 5: Make decision regarding H0.

It takes three steps to compute the
value of t.

First:
Calculate the sample standard deviations

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Two-Sample Pooled Test Example
Concluded
Second: Pool the sample variances

Third: Determine the value of t

The decision is not to reject the null hypothesis because –0.662 falls in the
region between −1.833 and 1.833.

Step 6: Interpret the result; we conclude the sample data failed to show a
difference between the mean assembly times of the two methods.

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Unequal Population Standard Deviations
 If we cannot assume the population standard deviations
are equal, we adjust the degrees of freedom and the
formula for finding t
 We determine the degrees of freedom based on the
following formula

 The value of the test statistic is computed from the

following formula

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Unequal Population Standard Deviations
Example

Personnel in a consumer testing laboratory are evaluating the absorbency of

paper towels. They wish to compare a set of store brand towels to a similar
group of name brand towels. For each brand, they dip a ply of the paper into a
tub of fluid, allow the paper to drain back into the vat for 2 minutes, and then
evaluate the amount of liquid the paper has taken up from the vat.

A random sample of 9 store brand towels absorption amounts (in ml.)

A random sample of 12 name brand towels absorption amounts (in ml.)

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Unequal Population Standard Deviations
Example (2 of 3)
Step 1: State the null and alternate hypothesis
H0: 1 = 2
H1: 1 ≠ 2
Step 2: Select the level of significance; we decide to use .10
Step 3: Determine the test statistic; we’ll use t

We must adjust the degrees of freedom with formula 11-6 before finding
the critical values and round the result down to an integer; in this case, 10

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Unequal Population Standard Deviations
Example (3 of 3)

Step 4: State the decision rule, do not reject H0 if t falls between −1.812 and 1.812.
Step 5: Make decision

The decision is to reject the null hypothesis because –2.474 is

smaller than −1.812.

Step 6: Interpret; the mean absorption rate of the two types of towels is not the same.

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Dependent Samples
 We first compute the mean and the standard deviation of the
sample differences
 The value of the test statistic is computed with the following
formula

 There are n – 1 degrees of freedom

 dത is the mean of the difference between the paired
observations
 sd is the standard deviation of the differences between the
paired observations
 n is the number of paired observations

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Dependent Samples Continued
 Note: the standard deviation of the differences will be
computed with the formula 3-11, except d is substituted for x

Example
 Nickel Savings and Loan employs two firms, Schadek Appraisals
and Bowyer Real Estate, to appraise the value of the real
estate on which it makes loans. To review the consistency of
the two appraisal firms, Nickel randomly selects 10 homes and
has both of the firms appraise the values of the selected
homes. Thus, there will be a pair of values for each home; these
appraised values are related to the home selected. This is
called a paired sample.

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Dependent Samples Example
Recall that Nickel Savings and Loan
wishes to compare the two companies
it uses to appraise the value of
residential homes. Nickel Savings
selected a sample of 10 residential
properties and scheduled both firms for
an appraisal. The results are reported in
$000. At the .05 significance level, can
we conclude there is a difference
between the firm’s appraised values?

Step 1: State the null and alternate hypothesis

H0:  d = 0
H1:  d ≠ 0
Step 2: Select the level of significance, we decide to use .05
Step 3: Determine the test statistic, we’ll use t
Step 4: State the decision rule, reject H0 if t < −2.262 or > 2.262

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Dependent Samples Example Continued

Here we find the mean of the

sample differences, is 4.6 and the
standard deviation of the sample
differences, sd is 4.402. Use these
in formula 11-7 to compute the t
value, 3.305

Step 5: Make your decision; we’ll reject the null hypothesis

Step 6: Interpret; we conclude there is a difference between the firms’ mean appraised
home values

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Dependent and Independent Samples
 There are two types of dependent samples
 Those characterized by a measurement, an intervention of
some type, and then another measurement
 For example, suppose we wish to show that by playing music in the
production area we are able to increase production. We begin by
selecting a sample of workers and measure their output, then we
place the speakers in the production area and play soothing music,
and then we again measure the output
 A matching or pairing of the observations
 For example, the Nickel Savings and Loan example illustrates
dependent samples because a property is selected and both firms
appraise the same property
 We prefer a test based on dependent samples because it
reduces the amount of variation in the test and is considered a
better test

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 1 Introduction
Introduction

2 Two Dependent Samples

CI for the difference of two dependent samples
Hypothesis Testing

3 Two Independent Samples

Setup
Large sample with known variances
Large sample with unknown variances
Small sample with common variances
Small sample with unequal variances
Two binomial distributed populations
Examples

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 2 / 35

Overview

Last week we reviewed:

▶ confidence interval concerning one population parameters
▶ hypothesis testing concerning one population parameters
This meeting, we study:
▶ confidence interval concerning two population parameters
▶ hypothesis testing concerning two population parameters

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 3 / 35

 1 Introduction
Introduction

2 Two Dependent Samples

CI for the difference of two dependent samples
Hypothesis Testing

3 Two Independent Samples

Setup
Large sample with known variances
Large sample with unknown variances
Small sample with common variances
Small sample with unequal variances
Two binomial distributed populations
Examples

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 4 / 35

Two dependent samples

Let X ∼ N µX , σX2

Let Y ∼ N µY , σY2

X and Y are two related populations:

▶ paired samples: matched by location, matched by time, sharing similar
characteristics
▶ repeated measures (before and after)
For each sample, are the two observations random or nonrandom?

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 5 / 35

Confidence interval

Let Di be the (sample) difference between X and Y for the i th pair:

Di = xi − yi

The (1 − α) 100% CI for µd is:

SD
D̄ ± t α2 ,n−1 √
n

where: Pn
i=1 Di
D̄ =
n
v  2
uP
u n D − D̄
t i=1 i
SD =
n−1

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 6 / 35

Example

Suppose that 6 people sign up for a weight loss program

You collect their weights before and after the program:
Person Before After
1 136 125
2 205 195
3 157 150
4 138 140
5 175 165
6 166 160
Calculate the 95% confidence intervals

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 7 / 35

 1 Introduction
Introduction

2 Two Dependent Samples

CI for the difference of two dependent samples
Hypothesis Testing

3 Two Independent Samples

Setup
Large sample with known variances
Large sample with unknown variances
Small sample with common variances
Small sample with unequal variances
Two binomial distributed populations
Examples

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 8 / 35

Hypothesis testing

State the hypothesis:

H0 : µD = D0

µD > D0

 upper tail test
Ha : µ <D
D 0 lower tail test

µ ̸= D

two-tailed test
D 0

The test statistic is:

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 9 / 35

Hypothesis testing
State the hypothesis:
H0 : µD = D0

µD > D0

 upper tail test
Ha : µ <D
D 0 lower tail test

µ = two-tailed test
D ̸ D0


The test statistic is:

D̄ − D0
T = √
SD / n
The rejection region is:

t > tα,n−1

 upper tail
t < −tα,n−1 lower tail

|t| > t α two-tailed

,n−1
2

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 10 / 35

Example

Suppose that 6 people sign up for a weight loss program

You collect their weights before and after the program:
Person Before After
1 136 125
2 205 195
3 157 150
4 138 140
5 175 165
6 166 160
Do the data provide evidence that the program reduces participants’
weights?

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 11 / 35

 1 Introduction
Introduction

2 Two Dependent Samples

CI for the difference of two dependent samples
Hypothesis Testing

3 Two Independent Samples

Setup
Large sample with known variances
Large sample with unknown variances
Small sample with common variances
Small sample with unequal variances
Two binomial distributed populations
Examples

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 12 / 35

Sum of two independent random variables

Let X ∼ N µX , σX2

Let Y ∼ N µY , σY2

Suppose Z = X + Y and X and Y are independent random variables

Then,  
Z ∼ N µX + µY , σX2 + σY2

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 13 / 35

Setup

Let X11, . . . , X1n1 be a random sample from a normal distribution with

mean µ1 and variance σ12
Let X21 , . . . , X2n2 be a random sample from a normal distribution
with mean µ2 and variance σ22
The two samples are independent
Let:
Pn1
▶ X̄1 = 1
X1i
n1
Pi=1
n2
▶ X̄2 = 1
n2 i=1 X2i
Thus, !
σ2 σ2
X̄1 − X̄2 ∼ N µ1 − µ2 , 1 + 2
n1 n2

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 14 / 35

 1 Introduction
Introduction

2 Two Dependent Samples

CI for the difference of two dependent samples
Hypothesis Testing

3 Two Independent Samples

Setup
Large sample with known variances
Large sample with unknown variances
Small sample with common variances
Small sample with unequal variances
Two binomial distributed populations
Examples

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 15 / 35

Case I: large sample with known σ1 and σ2

The (1 − α) 100% CI for µ1 − µ2 is:

v !
u σ2 σ22
  u
X̄1 − X̄2 ± z α2 t 1
+
n1 n2

where:
▶ α is . . .
▶ (1 − α) 100% means . . .

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 16 / 35

Hypothesis testing
State the hypothesis:

H0 : µ 1 − µ 2 = D 0

µ1 − µ 2 > D 0

 upper tail test
Ha : µ −µ <D
1 2 0 lower tail test

µ − µ = two-tailed test
2 ̸ D0

1

The test statistic is:

X̄1 − X̄2 − D0
Z= r
σ12 σ22
n1 + n2

The rejection region is:


z > zα

 upper tail
z < −z α lower tail

|z| > z α two-tailed

2

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 17 / 35

 1 Introduction
Introduction

2 Two Dependent Samples

CI for the difference of two dependent samples
Hypothesis Testing

3 Two Independent Samples

Setup
Large sample with known variances
Large sample with unknown variances
Small sample with common variances
Small sample with unequal variances
Two binomial distributed populations
Examples

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 18 / 35

Case II: large sample with unknown σ1 and σ2

The (1 − α) 100% CI for µ1 − µ2 is:

v !
u S2 2
u
  S
X̄1 − X̄2 ± z α2 t 1 + 2
n1 n2

We replace σ12 and σ22 with S12 and S22 when ni ≥ 30, i = 1, 2.

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 19 / 35

Hypothesis testing
State the hypothesis:

H0 : µ 1 − µ 2 = D 0

µ1 − µ 2 > D 0

 upper tail test
Ha : µ −µ <D
1 2 0 lower tail test

µ − µ = two-tailed test
2 ̸ D0

1

The test statistic is:

X̄1 − X̄2 − D0
Z= r
S12 S22
n1 + n2

The rejection region is:


z > zα

 upper tail
z < −z α lower tail

|z| > z α two-tailed

2

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 20 / 35

 1 Introduction
Introduction

2 Two Dependent Samples

CI for the difference of two dependent samples
Hypothesis Testing

3 Two Independent Samples

Setup
Large sample with known variances
Large sample with unknown variances
Small sample with common variances
Small sample with unequal variances
Two binomial distributed populations
Examples

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 21 / 35

Pooled sample variance

Consider the case where σ12 and σ22 are unknown

However, we assume common variance σ12 = σ22 = σ 2
Let Sp2 be the pooled sample variance:

(n1 − 1) S12 + (n2 − 1) S22

Sp2 =
n1 + n2 − 2

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 22 / 35

Case III: small sample with unknown but common σ1 and
σ2

The (1 − α) 100% CI for µ1 − µ2 is:

s
  1 1
X̄1 − X̄2 ± t α2 ,(n1 +n2 −2) Sp +
n1 n2

where n1 + n2 − 2 is the degree of freedom

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 23 / 35

Hypothesis testing
State the hypothesis:

H0 : µ 1 − µ 2 = D 0

µ1 − µ 2 > D 0

 upper tail test
Ha : µ −µ <D
1 2 0 lower tail test

µ − µ ̸= D

two-tailed test
1 2 0

The test statistic is:

X̄1 − X̄2 − D0
T = q
Sp 1
n1 + 1
n2

The rejection region is:


t > tα

 upper tail
t < −tα lower tail

|t| > t α two-tailed

2

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 24 / 35

 1 Introduction
Introduction

2 Two Dependent Samples

CI for the difference of two dependent samples
Hypothesis Testing

3 Two Independent Samples

Setup
Large sample with known variances
Large sample with unknown variances
Small sample with common variances
Small sample with unequal variances
Two binomial distributed populations
Examples

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 25 / 35

Case IV: small sample with unequal σ1 and σ2

The (1 − α) 100% CI for µ1 − µ2 is:

s
  S12 S22
X̄1 − X̄2 ± t α2 ,v +
n1 n2

where:  2
S12 S22
n1 + n2
v =  2  2
2 S S2
1 2
n1 n2

n1 −1 + n2 −1

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 26 / 35

Hypothesis testing
State the hypothesis:

H0 : µ 1 − µ 2 = D 0

µ1 − µ 2 > D 0

 upper tail test
Ha : µ −µ <D
1 2 0 lower tail test

µ − µ = two-tailed test
2 ̸ D0

1

The test statistic is:

X̄1 − X̄2 − D0
Tv = r
S12 S22
n1 + n2

The rejection region is:


t > tα

 upper tail
t < −tα lower tail

|t| > t α two-tailed

2

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 27 / 35

 1 Introduction
Introduction

2 Two Dependent Samples

CI for the difference of two dependent samples
Hypothesis Testing

3 Two Independent Samples

Setup
Large sample with known variances
Large sample with unknown variances
Small sample with common variances
Small sample with unequal variances
Two binomial distributed populations
Examples

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 28 / 35

Large sample CI for p1 − p2

The (1 − α) 100% CI for p1 − p2 is:

s
p̂1 (1 − p̂1 ) p̂2 (1 − p̂2 )
  
(p̂1 − p̂2 ) ± z α2 +
n1 n2

where:
▶ p̂1 and p̂2 are point estimators of p1 and p2
This approximation is valid if, for all i:

p̂i ni ≥ 5

(1 − p̂i ) ni = q̂i ni ≥ 5
Two samples are independent

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 29 / 35

Hypothesis testing
State the hypothesis:
H0 : p1 − p2 = D0

p1 − p2 > D0

 upper tail test
Ha : p −p <D
1 2 0 lower tail test

p − p ̸= D

two-tailed test
1 2 0

The test statistic is:

p̂1 − p̂2 − D0
Z=q
p̂1 q̂1 p̂2 q̂2
n1 + n2

The rejection region is:


z > zα

 upper tail
z < −z α lower tail

|z| > z α two-tailed

2

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 30 / 35

 1 Introduction
Introduction

2 Two Dependent Samples

CI for the difference of two dependent samples
Hypothesis Testing

3 Two Independent Samples

Setup
Large sample with known variances
Large sample with unknown variances
Small sample with common variances
Small sample with unequal variances
Two binomial distributed populations
Examples

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 31 / 35

Example

The intelligence quotients (IQs) of 17 students from one area of a city

showed a sample mean of 106 with a sample standard deviation of 10,
whereas the IQs of 14 students from another area chosen
independently showed a sample mean of 109 with a sample standard
deviation of 7.
Is there a significant difference between the IQs of the two groups at
α = 0.01? Assume that the population variances are equal.

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 32 / 35

Example

Assume that two populations are normally distributed with unknown

and unequal variances. Two independent samples were drawn from
these populations and the data obtained resulted in the following
basic statistics:

n1 = 18 x̄1 = 20.17 s1 = 4.3

n2 = 12 x̄2 = 19.23 s2 = 3.8
Test at the 5% significance level whether the two population means
are different.

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 33 / 35

Example

In a salary equity study of faculty at a certain university, sample

salaries of 50 male assistant professors and 50 female assistant
professors yielded the following basic statistics.
sample sample average sample SD
Male $46,400 360
Female $46,000 220
Test the hypothesis that the mean salary of male assistant professors
is more than the mean salary of female assistant professors at this
university. Use α = 0.05.

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 34 / 35

Example

Because of the impact of the global economy on a high-wage country

such as the United States, it is claimed that the domestic content in
manufacturing industries fell between 1977 and 1997.
A survey of 36 randomly picked U.S. companies gave the proportion
of domestic content total manufacturing in 1977 as 0.37 and in 1997
as 0.36.
At the 1% level of significance, test the claim that the domestic
content really fell during the period 1977–1997.

Muhammad Ryan Sanjaya (Econ UGM) Statistics II: Lecture 10 35 / 35