One Sample Tests of Hypothesis

Chapter 10

McGraw-Hill/Irwin ©The McGraw-Hill Companies, Inc. 2008

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
 What is Hypothesis Testing?

Hypothesis testing is a procedure, based

on sample evidence and probability
theory, used to determine whether the
hypothesis is a reasonable statement
and should not be rejected, or is
unreasonable and should be rejected.

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 Hypothesis Testing Steps

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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
 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
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, can be called
research hypothesis
 Never contains the “=” , “≤” or “” sign
 May or may not be supported
 Is generally the hypothesis that the
researcher is trying to support
 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
 Reason for Rejecting H0
Sampling Distribution of X

X
20 μ = 50
If H0 is true
If it is unlikely that ... then we reject
we would get a the null
sample mean of ... if in fact this were hypothesis that μ
this value ... the population mean… = 50.
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
Level of Significance
and the Rejection Region
Level of significance =  Represents
critical value
H0: μ = 3 /2 /2
Rejection
H1: μ ≠ 3 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
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
Errors in Making Decisions
(continued)

 Type II Error
– Fail to reject a false null hypothesis

The probability of Type II Error is β

Outcomes and Probabilities

Possible Hypothesis Test Outcomes

Actual Situation
Decision H0 True H0 False
Do Not
No Error Type II Error
Key: Reject
(1 - ) (β)
Outcome H0
(Probability) Reject Type I Error No Error
H0 ( ) (1-β)
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 )
 Left-tail or Right-tail Test?

The direction of the test involving

claims that use the words “has
improved”, “is better than”, and the like Keywords
Inequality Part
Symbol of:
will depend upon the variable being
measured. Larger (or more) > H1
• For instance, if the variable involves than
time for a certain medication to take Smaller (or less) < H1
effect, the words “better” “improve” or
No more than  H0
more effective” are translated as “<”
(less than, i.e. faster relief). At least ≥ H0
• On the other hand, if the variable Has increased > H1
refers to a test score, then the words Is there difference? ≠ H1
“better” “improve” or more effective”
Has not changed = H0
are translated as “>” (greater than, i.e.
higher test scores) Has “improved”, “is > H1
better than”. “is
more effective”

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 Hypothesis Setups for Testing a Mean ()

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 Hypothesis Setups for Testing a
Proportion ()

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 Testing for a Population Mean with a
Known Population Standard Deviation- Example

Jamestown Steel Company

manufactures and assembles
desks and other office equipment
at several plants in western New
York State. The weekly production
of the Model A325 desk at the
Fredonia Plant follows the normal
probability distribution with a mean
of 200 and a standard deviation of
16. Recently, because of market
expansion, new production
methods have been introduced and
new employees hired. The vice
president of manufacturing would
like to investigate whether there
has been a change in the weekly
production of the Model A325 desk.

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 Testing for a Population Mean with a
Known Population Standard Deviation- Example

Step 1: State the null hypothesis and the alternate hypothesis.

H0:  = 200
H1:  ≠ 200
(note: keyword in the problem “has changed”)

Step 2: Select the level of significance.

α = 0.01 as stated in the problem

Step 3: Select the test statistic.

Use Z-distribution since σ is known and population being
sampled is normally distributed.

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 Testing for a Population Mean with a
Known Population Standard Deviation- Example

Step 4: Formulate the decision rule.

Reject H0 if |Z| > Z/2
Z  Z / 2
X 
 Z / 2
/ n
203.5  200
 Z .01/ 2
16 / 50
1.55 is not  2.58
Step 5: Make a decision and interpret the result.
Because 1.55 does not fall in the rejection region, H0 is not
rejected. We conclude that the population mean is not different from
200. So we would report to the vice president of manufacturing that the
sample evidence does not show that the production rate at the Fredonia
Plant has changed from 200 per week.
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 Testing for a Population Mean with a Known
Population Standard Deviation- Another Example

Suppose in the previous problem the vice

president wants to know whether there has
been an increase in the number of units
assembled. To put it another way, can we
conclude, because of the improved
production methods, that the mean number
of desks assembled in the last 50 weeks was
more than 200?
Recall: σ=16, n=50, α=.01 (error for n in slide)

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 Testing for a Population Mean with a Known
Population Standard Deviation- Example

Step 1: State the null hypothesis and the alternate

hypothesis.
H0:  ≤ 200
H1:  > 200
(note: keyword in the problem “an increase”)

Step 2: Select the level of significance.

α = 0.01 as stated in the problem

Step 3: Select the test statistic.

Use Z-distribution since σ is known

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 Testing for a Population Mean with a Known
Population Standard Deviation- Example

Step 4: Formulate the decision rule.

Reject H0 if Z > Z

Step 5: Make a decision and interpret the result.

Because 1.55 does not fall in the rejection region, H0 is not rejected.
We conclude that the average number of desks assembled in the last
50 weeks is not more than 200

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 p-Value in Hypothesis Testing

p-VALUE is the probability of observing a sample value

as extreme as, or more extreme than, the value
observed, given that the null hypothesis is true.

In testing a hypothesis, we can also compare the p-

value to with the significance level ().

Ifthe p-value < significance level, H0 is rejected, else

H0 is not rejected.

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 p-Value in Hypothesis Testing - Example

Recall the last problem where the

hypothesis and decision rules
were set up as:
H0:  ≤ 200
H1:  > 200
Reject H0 if Z > Z
where Z = 1.55 and Z =2.33

Reject H0 if p-value < 

0.0606 is not < 0.01

Conclude: Fail to reject H0

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 What does it mean when p-value < ?

(a) .10, we have some evidence that H0 is not true.

(b) .05, we have strong evidence that H0 is not true.

(c) .01, we have very strong evidence that H0 is not true.

(d) .001, we have extremely strong evidence that H0 is not

true.

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 Testing for the Population Mean: Population
Standard Deviation Unknown

 When the population standard deviation (σ) is

unknown, the sample standard deviation (s) is used in
its place
 The t-distribution is used as test statistic, which is
computed using the formula:

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 Testing for the Population Mean: Population
Standard Deviation Unknown - Example

The McFarland Insurance Company Claims Department reports the mean

cost to process a claim is $60. An industry comparison showed this
amount to be larger than most other insurance companies, so the
company instituted cost-cutting measures. To evaluate the effect of
the cost-cutting measures, the Supervisor of the Claims Department
selected a random sample of 26 claims processed last month. The
sample information is reported below.
At the .01 significance level is it reasonable a claim is now less than $60?

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 Testing for a Population Mean with a
Known Population Standard Deviation- Example

Step 1: State the null hypothesis and the alternate

hypothesis.
H0:  ≥ $60
H1:  < $60
(note: keyword in the problem “now less than”)

Step 2: Select the level of significance.

α = 0.01 as stated in the problem

Step 3: Select the test statistic.

Use t-distribution since σ is unknown

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 t-Distribution Table (portion)

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 Testing for the Population Mean: Population
Standard Deviation Unknown – Minitab Solution

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 Testing for a Population Mean with a
Known Population Standard Deviation- Example

Step 4: Formulate the decision rule.

Reject H0 if t < -t,n-1

Step 5: Make a decision and interpret the result.

Because -1.818 does not fall in the rejection region, H0 is not rejected at the .
01 significance level. We have not demonstrated that the cost-cutting
measures reduced the mean cost per claim to less than $60. The difference
of $3.58 ($56.42 - $60) between the sample mean and the population mean
could be due to sampling error.
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 Testing for a Population Mean with an Unknown
Population Standard Deviation- Example

The current rate for producing 5 amp fuses at Neary

Electric Co. is 250 per hour. A new machine has
been purchased and installed that, according to the
supplier, will increase the production rate. A sample
of 10 randomly selected hours from last month
revealed the mean hourly production on the new
machine was 256 units, with a sample standard
deviation of 6 per hour.

At the .05 significance level can Neary conclude that

the new machine is faster?

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 Testing for a Population Mean with a
Known Population Standard Deviation- Example continued

Step 1: State the null and the alternate hypothesis.

H0: µ ≤ 250; H1: µ > 250

Step 2: Select the level of significance.

It is .05.

Step 3: Find a test statistic. Use the t distribution

because the population standard deviation is not
known and the sample size is less than 30.

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 Testing for a Population Mean with a
Known Population Standard Deviation- Example continued

Step 4: State the decision rule.

There are 10 – 1 = 9 degrees of freedom. The null
hypothesis is rejected if t > 1.833.

X  256  250
t   3.162
s n 6 10

Step 5: Make a decision and interpret the results.

The null hypothesis is rejected. The mean number produced is
more than 250 per hour.

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 Tests Concerning A Proportion

 A Proportion is the fraction or percentage that indicates the part of

the population or sample having a particular trait of interest.
 The sample proportion is denoted by p and is estimated by x/n
 The test statistic is computed as follows:

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 Assumptions in Testing a Population Proportion
using the z-Distribution

 A random sample is chosen from the population.

 It is assumed that the binomial assumptions discussed in
Chapter 6 are met:
(1) the sample data collected are the result of counts;
(2) the outcome of an experiment is classified into one of two
mutually exclusive categories—a “success” or a “failure”;
(3) the probability of a success is the same for each trial; and
(4) the trials are independent
 The test we will conduct shortly is appropriate when both n
and n(1-  ) are at least 5.
 When the above conditions are met, the normal distribution can
be used as an approximation to the binomial distribution

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 Test Statistic for Testing a Single
Population Proportion

Hypothesized
population proportion
Sample proportion

p 
z
 (1   )
n

Sample size

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 Test Statistic for Testing a Single
Population Proportion - Example

Suppose prior elections in a certain state indicated it is

necessary for a candidate for governor to receive at
least 80 percent of the vote in the northern section of
the state to be elected. The incumbent governor is
interested in assessing his chances of returning to
office and plans to conduct a survey of 2,000
registered voters in the northern section of the state.
Using the hypothesis-testing procedure, assess the
governor’s chances of reelection, if 1550 has planned
to vote for the incumbent governor. Use 95%
confidence interval.

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 Test Statistic for Testing a Single
Population Proportion - Example

Step 1: State the null hypothesis and the alternate

hypothesis.
H0:  ≥ .80
H1:  < .80
(note: keyword in the problem “at least”)

Step 2: Select the level of significance.

α = 0.05 as stated in the problem

Step 3: Select the test statistic.

Use Z-distribution since the assumptions are met
and n and n(1-) ≥ 5

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 Testing for a Population Proportion - Example

Step 4: Formulate the decision rule.

Reject H0 if Z <-Z

Step 5: Make a decision and interpret the result.

The computed value of z (2.80) is in the rejection region, so the null hypothesis is rejected
at the .05 level. The difference of 2.5 percentage points between the sample percent (77.5
percent) and the hypothesized population percent (80) is statistically significant. The
evidence at this point does not support the claim that the incumbent governor will return to
the governor’s mansion for another four years.
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 Type II Error

 Recall Type I Error, the level of significance,

denoted by the Greek letter “”, is defined as
the probability of rejecting the null hypothesis
when it is actually true.

 Type II Error, denoted by the Greek letter

“β”,is defined as the probability of “accepting”
the null hypothesis when it is actually false.

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 Type I and Type II Errors Illustrated

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