Unit 5 - Testing of Hypothesis - SLM

Course: Statistics
Unit 5

Testing of Hypothesis

Page 2 of 46

Table of Contents

5.1. Learning Objectives ........................................................................................................................... 3
5.2. Introduction ........................................................................................................................................ 3
5.3. Testing of Hypothesis ......................................................................................................................... 3
5.4. Terminologies Used ............................................................................................................................ 4
5.4.1. Null and Alternate Hypothesis ................................................................................................................... 4
5.4.2. Interpreting the Level of Significance ........................................................................................................ 5
5.4.3. Hypothesis is Accepted and Not Proved .................................................................................................... 5
5.4.4. Selecting a Significance Level ................................................................................................................... 6
5.4.5. When Type I Error Is Preferred .................................................................................................................. 7
5.4.6. When Type II Error Is Preferred ................................................................................................................ 7
5.4.7. Decide on Which Distribution to Use in Hypothesis Testing..................................................................... 7
5.4.8. Two-Tailed Tests & One-Tailed Tests ....................................................................................................... 8
5.4.9. Further notes on Testing of Hypothesis .................................................................................................... 10
5.5. Classification of Test Statistics ........................................................................................................ 13
5.5.1. Large Samples (n > 30) Attributes (proportions) .................................................................................. 13
5.5.2. Large Samples (n > 30) Variable ........................................................................................................... 14
5.6. Test Procedure .................................................................................................................................. 15
5.7. Identification of the Right Statistics for the Test .......................................................................... 15
5.8. Examples ........................................................................................................................................... 16
5.9. Summary of Large Samples Tests .................................................................................................. 30
5.10. Introduction to Small Samples Tests ............................................................................................ 31
5.10.1. t Distribution .................................................................................................................................... 31
5.10.2. Uses of Small Samples Tests .................................................................................................................. 32
5.11. Small Samples - Variable: Population S.D is not Known ........................................................... 32
5.12. Examples ......................................................................................................................................... 33
5.13. Example of t-test on Excel Sheet ................................................................................................... 40
5.14. Summary ......................................................................................................................................... 46
5.15. References ....................................................................................................................................... 46

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5.1. Learning Objectives

By the end of this unit, you should be able to:

- Recognise the need of hypothesis testing
- Examine issues relating to the determination of level of significance
- Apply hypothesis tests to large and small samples

5.2. Introduction

Testing of hypothesis deals with the inductive inference based on sample study about the characteristics of
the population. Decisions based on the inference involve risk. The theory of testing of hypothesis was
initiated by J. Neyman and E.S. Pearson. It employs statistical tools to arrive at decisions.

5.3. Testing of Hypothesis

Hypothesis testing begins with an assumption, called a hypothesis that we make about a population
parameter. We assume a certain value for a population mean. To test the validity of our assumption, we
gather sample data and determine the difference between the hypothesised value and the actual value of the
sample mean. Then we judge whether the difference is significant. The smaller the difference, the greater the
likelihood that our hypothesised value for the mean is correct. The larger the difference is, the smaller the
likelihood.

A Case

The director of a talc powder company wants to know the following latest information
about the product, employees & competitors position in the market.

i) What % of people buy their talc powder?
ii) Are the salaries of the employees compatible with other companys structure?
iii) Is there a significant improvement in the employees performance which is at 90%
now?
iv) Does the production rate have declined?

He calls for a meeting of General Managers of Marketing, Personnel and Production and
directs them to give the information within next 15 days.

The company has five Marketing divisional offices and three Manufacturing units.

(Cont. in topic Identification of the Right Statistics for the Test)

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Unfortunately, the difference between the hypothesised population parameter and the actual statistic is more
often neither so large that we automatically reject our hypothesis nor so small that we just as quickly accept
it. So in hypothesis testing, as in most significant real-life decisions, clear-cut solutions are the exception,
not the rule.

Assumptions

Although hypothesis testing sounds like some formal statistical term completely unrelated to business
decision making, in fact managers propose and test hypothesis all the time. If we drop the price of this car
model by Rs. 25,000, well sell 50,000 cars this year is a hypothesis. To test this hypothesis, we have to
wait until the end of the year and count sales. Managerial hypothesis are based on intuition; the
marketplace decides whether the managers intuitions were correct. Hint: Hypothesis testing is about
making inferences about a population from only a small sample. The bottom line in hypothesis testing is
when we ask ourselves (and then decide) whether a population like we think this one is would be likely to
produce a sample like the one we have sampled.

5.4. Terminologies Used

5.4.1. Null and Alternate Hypothesis

In hypothesis testing, we must state the assumed or hypothesised value of the population parameter before
we begin sampling.

If we use a hypothesised value of a population mean in a problem, we would represent it symbolically as
Ho
. This is read as The hypothesized value of the population mean

If our sample results fail to support the null hypothesis, we must conclude that something else is true.
Whenever we reject the hypothesis, the conclusion we do accept is called the alternative hypothesis and is
symbolized H
1
(H sub-one).

The assumption we wish to test is called the null hypothesis and is symbolized H
o
.

Suppose we want to test the hypothesis that the population mean is equal to 600. We
would symbolise it as follows and read it, The null hypothesis is that the population mean
= 600 written as Ho: = 600. The term null hypothesis arises from earlier agricultural and
medical applications of statistics. In order to test the effectiveness of a new fertiliser or
drug, the tested hypothesis (the null hypothesis) was that it had no effect, that is, there was
no difference between treated and untreated samples.

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5.4.2. Interpreting the Level of Significance

The purpose of hypothesis testing is not to question the computed value of the sample statistic but to make a
judgment about the difference between that sample statistic and a hypothesised population parameter.

The next step after stating the null and alternative hypotheses, then, is to decide what criterion to use for
deciding whether to accept or reject the null hypothesis.

If we assume the hypothesis is correct, then the significance level will indicate the percentage of sample
means that is outside certain limits. (In estimation, please remember, the confidence level indicated the
percentage of sample means that fell within the defined confidence limits.)

5.4.3. Hypothesis is Accepted and Not Proved

Even if our sample statistic does fall in the non-shaded region (the region that makes up 95 percent of the
area under the curve), this does not prove that our null hypothesis (H
0
) is true; it simply does not provide
statistical evidence to reject it. Why? Because the only way in which the hypothesis can be accepted with
certainty is for us to know the population parameter; unfortunately, this is not possible. Therefore, whenever
we say that we accept the null hypothesis, we actually mean that there is not sufficient statistical evidence to
reject it. Use of the term accept, instead of do not reject, has become standard. It means simply that when
sample data do not cause us to reject a null hypothesis, we behave as if that hypothesis is true.

(Cont. from topic A Case)

The General Manager, Marketing has the data for the last year as 30% of people use their
talc. However he is not sure whether it holds for the current year? He directs the divisional
officers to collect data. We note that G.M Marketing assumption is 30%. G.M personnel
observes that average salaries of his employee is Rs.25,000/- with a standard deviation of
Rs.500. Further he observes that efficiency is at 85%. He assumes that it may be more. G.M
production found that the production rate during last year was 1500 units per hour. In his
assumption, there was no change in production rate.

(Cont. in topic Examples)

For the null hypothesis H
0
: = 300

We will consider three alternative hypotheses as:

1) H
1
: = 300 (population mean is not equal to 300)
2) H
1
: > 300 (population mean greater than 300)
3) H
1
: < 300 (population mean less than 300)

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Figure 5.1

5.4.4. Selecting a Significance Level

There is no single standard or universal level of significance for testing hypotheses. In some instances, a 5%
level of significance is used. Published research results often test hypotheses at the 1% level of significance.
It is possible to test a hypothesis at any level of significance. But remember that our choice of the minimum
standard for an acceptable probability, or the significance level, is also the risk we assume of rejecting a null
hypothesis when it is true.

If the significance level is high then we would rarely accept the null hypothesis when it is not true but, at the
same time, often reject it when it is true. When testing a hypothesis we come across with four possible
situations depicted as follows.

Table 5.1
Hypothesis is
Test results says
True False
Accept

Reject

Type II Error
The higher the significance level we use for testing a hypothesis, the higher the probability of
rejecting a null hypothesis when it is true. 5% level of significance implies we are ready to
reject a true hypothesis in 5% of cases.

Type I error

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5.4.5. When Type I Error Is Preferred

5.4.6. When Type II Error Is Preferred

5.4.7. Decide on Which Distribution to Use in Hypothesis Testing

After deciding what level of significance to use, our next task in hypothesis testing is to determine the
appropriate probability distribution. We have a choice between the normal distribution, and the t distribution.
The rules for choosing the appropriate distribution are similar to those we encountered in the unit on
estimation. The Table below summarises when to use the normal and t distributions in making tests of
means. Later in this unit, we shall examine the distributions appropriate for testing hypotheses about
proportions.

The combinations are:

1. Hypothesis is a true, test result accepts it we have made a right decision

2. Hypothesis is a true, test result rejects it we have made a wrong decision - Type I Error. It is
also known as Consumers Risk, denoted by o

3. Hypothesis is False, test result accepts it we have made a wrong decision - Type II Error. It
is known as Producers Risk, denoted by |; 1 P is called power of the Test

4. Hypothesis is False, test result rejects it we have made a right decision

Suppose that making a Type I error (rejecting a null hypothesis when it is true) involves the
time and trouble of reworking a batch of chemicals that should have been accepted. At the
same time, making a Type II error (accepting a null hypothesis when it is false) means
taking a chance that an entire group of users of this chemical compound will be poisoned.

Obviously, the management of this company will prefer a Type I error to a Type II error
and, as a result, will set very high levels of significance in its testing to get low | s.

Suppose, on the other hand, that making a Type I error involves disassembling an entire
engine at the factory, but making a Type II error involves relatively inexpensive warranty
repairs by the dealers. Then the manufacturer is more likely to prefer a Type II error and
will set lower significance levels in its testing.

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Remember one more rule when testing the hypothesised values of a mean. As in estimation, use the finite
population multiplier whenever the population is finite in size, sampling is done without replacement, and
the sample is more than 5 percent of the population.

5.4.8. Two-Tailed Tests & One-Tailed Tests

A two-tailed test is appropriate when the null hypothesis is =
Ho
(where
Ho
is some specified value) and
the alternative hypothesis is =
Ho
.

However, there are situations in which a two-tailed test is not appropriate, and we must use a one-tailed test.

Table 5.2
Conditions for using the Normal and t distributions in Testing Hypothesis about means
When the Population
Standard Deviation is known
When the Population Standard
Deviation is not known
Sample size n is larger than 30 Normal distribution, z table Normal distribution, z - table
Sample size n is 30 or less and
we assume the population is
normal or approximately so
Normal distribution, z table t Distribution, t - table

A two-tailed test of a hypothesis will reject the null hypothesis if the sample mean is
significantly higher than or lower than the hypothesised population mean. Thus, in a two-tailed
test, there are two rejection regions as shown in figure 5.1.
Assume that a manufacturer of iron rods wants to produce rods with a mean weight
of Kg H
o
25 = = . If the mean weight is less, he will lose customers to his competitions;
if the mean weight is more, he will have a very high production cost. In order to see
whether his production process is working properly, he takes a sample of the output to test
the hypothesis H
o
; = 25. Because he does not want to deviate significantly from 25 kgs in
either direction, the appropriate alternative hypothesis is H
1
: = 25 and he uses a two-
tailed test. That is, he rejects the null hypothesis if the mean weight of rod in the sample is
either too far above 25 kg or too far below 25 kg.

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Figure 5.2

In lower-tailed test, the estimated sample values of the sample mean are significantly below the hypothesised
population mean, which will lead us to reject the null hypothesis in favour of the alternative hypothesis.

A left-tailed test is one of two kinds of One-tailed tests. As you have probably guessed by now, the other
kind of one-tailed test is a right-tailed test (or an upper-tailed test) as shown in figure 5.3. In upper-tailed test
values of the sample mean are significantly above the hypothesised population mean, which will cause us to
reject the null hypothesis in favour of the alternative hypothesis.

Consider the case of a wholesaler who buys iron rods from the manufacturer discussed
earlier. The wholesaler buys rods in large lots and does not want to accept a lot of rods
unless their mean life is at least 26 kg or a minimum of 24 kg. As each shipment arrives,
the wholesaler tests a sample to decide whether it should accept the shipment. The
company will reject the shipment only if it feels that the mean weight is below 24 kg. If it
feels that the rods are better than expected (with a mean weight above, 25kg), it certainly
will not reject the shipment because the greater weight comes at no extra cost. So the
wholesalers hypotheses are Ho: = 25 and H
1
: < 25. It rejects H
o
only if the mean
weight of the sampled rod is significantly below 25 kg. This situation is illustrated in the
figure below. From the figure 5.2, we can see why this test is called a left-tailed test (or a
lower-tailed test).
The rejection region is in the lower tail (left tail) of the distribution of the sample mean, and
that is why we call this a lower-tailed test. A lower-tailed test is used if the hypotheses are
Ho: =
Ho
.

The rejection region is in the upper tail (right tail) of the distribution of the sample mean, and
that is why we call this an upper-tailed test. An upper-tailed test is used when the hypotheses
are Ho: >
Ho
.

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Figure 5.3

This is to remind you again that, in each example of hypothesis testing, when we accept a null hypothesis on
the basis of sample information, we are really saying that there is no statistical evidence to reject it. We are
not saying that the null hypothesis is true. The only way to prove a null hypothesis is to know the population
parameter, and that is not possible with sampling. Thus, we accept the null hypothesis and behave as if it is
true simply because we can find no evidence to reject it.

5.4.9. Further notes on Testing of Hypothesis

- We cannot prove a null hypothesis; we can only fail to reject it.
- The null hypothesis is assumed true and a contradiction is sought.
- Type I error: Rejecting the null hypothesis when it is true. This occurs with probability a.
- Type II error: Failure to reject the null hypothesis when it is false. This occurs with probability b.
Table 5.3

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- A statistical hypothesis is a statement about the value of a population parameter q.
- A hypothesis test is a decision between two competing mutually exclusive and collectively
exhaustive hypotheses about the value of q.

Table 5.4

- The direction of the test is indicated by H1:

> indicates a right-tailed test
< indicates a left-tailed test
indicates a two-tailed test

Figure 5.4

- A two-sided hypothesis test (that is, q q
0
) is used when direction (< or >) is of no interest to the
decision maker
- A one-sided hypothesis test is used when the consequences of rejecting H
0
are asymmetric, or
where one tail of the distribution is of special importance to the researcher.
- Rejection in a two-sided test guarantees rejection in a one-sided test, other things being equal.
- A test statistic shows how far the sample estimate is from its expected value, in terms of its own
standard error.
- The decision rule uses the known sampling distribution of the test statistic to establish the critical
value that divides the sampling distribution into two regions.
- Reject H
0
if the test statistic lies in the rejection region.
- , the probability of a Type I error, is the level of significance (i.e., the probability that the test
statistic falls in the rejection region even though H
0
is true).
- = P(reject H
0
| H
0
is true)
- A Type I error is sometimes referred to as a false positive.

Page 12 of 46

- For example, if we choose = .05, we expect to commit a Type I error about 5 times in 100.
- A small is desirable, other things being equal.

- Chosen in advance, common choices for are 0.10, 0.05, 0.025, 0 .01 and 0.005 (that is, 10%,
5%, 2.5%, 1% and .5%).
- The risk is the area under the tail(s) of the sampling distribution.
- In a two-sided test, the risk is split with /2 in each tail since there are two ways to reject H
0
.
- |, the probability of a type II error, is the probability that the test statistic falls in the acceptance
region even though H
0
is false. | = P (fail to reject H
0
| H
0
is false)
- | cannot be chosen in advance because it depends on a and the sample size.
- A small | is desirable, other things being equal.
- The power of a test is the probability that a false hypothesis will be rejected.
- Power = 1 |
- A low b risk means high power
Power = P (reject H
0
| H
0
is false) = 1 |
- Larger samples lead to increased power.
- Larger samples lead to increased power.
- Both a small and a small | are desirable.
- For a given type of test and fixed sample size, there is a trade-off between and |.
- The larger critical value needed to reduce a risk makes it harder to reject H
0
, thereby increasing |
risk.
- Both and | can be reduced simultaneously only by increasing the sample size.
- The choice of should precede the calculation of the test statistic.
- The standard error of most sample estimators approaches 0 as sample size increases.
- In this case, no matter how small, u u
0
will be significant if the sample size is large enough.
- Therefore, expect significant effects even when an effect is too slight to have any practical
importance.
- The p-value is the probability of the sample result (or one more extreme) assuming that H0 is
true.
- The p-value can be obtained using Excels cumulative standard normal function
=NORMSDIST(z)
- Using the p-value, we reject H
0
if p-value < a.
- A two-tailed hypothesis test at the 5% level of significance (a=0.05) is exactly equivalent to
asking whether the 95% confidence interval for the mean includes the hypothesised mean.
- If the confidence interval includes the hypothesised mean, then we cannot reject the null
hypothesis.

Page 13 of 46

5.5. Classification of Test Statistics

Statistics used for Testing of Hypothesis can be classified as follows:

5.5.1. Large Samples (n > 30) Attributes (proportions)

Table 5.5
Test No. Description of Test Test Statistics Notes
1 Test for specified
proportion infinite
population

2
1
|
.
|
\
| P
P P
= Z
n
Q
s

P Population proportion
P
s
= Sample proportion
Q = 1 P, n sample size
proportion Finite
Population

2
1
2
1
1
|
.
|
\
|
N
N
|
.
|
\
| P
P P
= Z
n
n
Q
s

P = Population proportion
P
s
= Sample
Q = 1 P, n Sample size
N - Population size
3 Test between
proportions
different Population

2
1
2
2 2
1
1 1
2 1
|
|
.
|
\
| P
+
P
P P
= Z
n
Q
n
Q

P
1
-first sample proportion
P
2
-second sample proportion
Q
1
= 1 P, Q
2
= 1-P
2

n
1
- first sample size
n
2
second sample size
4 Test between
proportion same
population

2
1
2 1
2 1
1 1
|
|
.
|
\
|
|
|
.
|
\
|
+
P P
= Z
n n
PQ

P
1
P
2
Q
1
= 1 P, Q
2
= 1-P
2

n
1
- first sample size
n
2
second sample size

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5.5.2. Large Samples (n > 30) Variable

Table 5.6
Test No. Description of Test Test Statistics Notes
mean infinite
population

n
s
o

= Z
Population mean
s
= Sample mean
o = Population S.D
We can use Sample S.D
(s) also in case population
S.D. is not given
mean Finite
Population

2
1
2
1
2
1
|
.
|
\
|
N
N
|
|
.
|
\
|
= Z
n
n
s
o

Population mean
s
= Sample mean
o = Population S.D
We can use Sample S.D
(s) also in case population
S.D. is not given
7 Test between means
different
Population

2
1
2
2
2
1
1
2
2 1
|
|
.
|
\
|
+
= Z
n n
o o

P
1
P
2
Q
1
= 1 P, Q
2
= 1-P
2

n
1
- first sample size
n
2
second sample size
8 Test between Mean
same population
2 1
2 1
1 1
n n
+
= Z
o

Where
(
+
+
=
2 1
2
2
2
1
2
1
n n
n n o o
o

Page 15 of 46

5.6. Test Procedure

5.7. Identification of the Right Statistics for the Test

Table 5.7
Steps Description

1 State Null hypothesis (H
o
) and alternate hypothesis (H
1
)
2 State the level of significance. This gives you the tabulated normal / t value
3 Select the appropriate test from the list given in 5.5.1, 5.5.2, and 5.11
4 Calculate the required values for the test
5 Conduct the test
6 Draw conclusion:
- If calculated value is < Tabulated Value accept Ho
- If calculated value is > Tabulated Value Reject Ho

Table 5.8
Steps Description

1 Check the sample size. If n > 30 it is large sample Test. If n s 30 it is small sample test
(will be discussed in 5.10.1)
2 Check whether the data is attribute or variable. If the words mean and S.D are used,
then it is test for variable, otherwise it is test for attribute.
3 Check whether it is a test for specified value or between values. If two sample sizes
are given, then it is between values, otherwise it is for specified value.

4 If it is specified value test, check whether sample belongs to infinite or finite
population. If it is between values test, check whether samples are from different
population or same population.

5 Select the appropriate test statistic.

6 If the words improved, more, higher, less, lower, effective, efficient, superior, inferior
etc used then it is one-tailed test, otherwise it is two tailed test.

Page 16 of 46

5.8. Examples

Example 5.8.1:

Thompson press hypotheses that the average life of its latest web-offset press is 24,500
hours. They know the SD of the press life is 2,100 hours. From a sample of 25 presses, the
company finds a sample mean of 23,000 hours. At 0.01 significance level, should the
company conclude that the average life of the presses is less than the hypothesized 24,500
hours?

Solution:

1. Null hypothesis Ho: = 24,500 and Alternate hypothesis H
A
: M < 24,500 (one-
tailed test)

2. Level of significance o = 0.01 Z
tab
= 2.33

3. Test Statistics
n
s
o

= Z

4. Given = 24,500,
s
= 23,000, o = 2,100, n = 25
Note: Although n < 25, population S.D is given, therefore it becomes Z test
420
5
2100
25
2100
= = =
n
o

5. Test, 57 . 3
420
24500 23000
=
= Z
cal

6. Conclusion:
Since Z
cal
(3.57) > Z
tab
(2.33) Ho is rejected
The average life of the press is less than 14,500 hours.

(Cont. in next page)

Page 17 of 46

Example:

A machine is set to produce with mean 21.3 and standard deviation 0.4. A random sample of 625
observations has 21.33 as mean. Test whether the sample mean differs significantly from population mean.
Solution:
Step 1: Set up Null and alternative hypothesis
H
0
: = 21.3
v/s
H
1
: 21.3

Step 2: Level of significance = 0.05

Step 3:
Test statistics ) 1 , 0 ( ~ N
n
X
Z
o

=

Step 4: Calculation

Given, Population standard deviation () = 0.4 Sample size (n) = 625
Sample mean (
X
) = 21.33 Population mean () = 21.3

Substituting in values we get Z
cal
as

(Cont. from previous page)

The Excel output for the above problem is as follows:

Figure 5.5
This implies that the null hypothesis is rejected since the probability is less than 0.05.

Page 18 of 46

875 . 1
625
4 . 0
3 . 21 33 . 21
=
= Z

Step 5: Inference:
Z
cal
= 1.875 Z
tab
at 5% level of significance = 1.96

Since the table value is greater than calculated value there is no sample evidence to reject H
0
.
At 5% level of significance, = 21.3

Example 5.8.2:

Suppose the mean strength of material A of sample size 100 is 20 and the mean strength of
the material B of sample size 100 is 18. The corresponding SD is 10 & 12. We wish to test
whether there is significant difference in the mean weight.

Solution:
1. Null hypothesis Ho:
1
=
2

2. Alternate hypothesis H
A
:
1
=
2

Level of significance o = 0.01 Z
tab
= 2.33
3. Test Statistics
2
1
2
2
2
1
1
2
2 1
|
|
.
|
\
|
+
= Z
n n
o o

4. Given
1
= 20,
2
= 18, o
1
= 10, o
2
= 12, n
1
= 100, n
2
= 100
2
1
2
2
2
1
2
1
|
|
.
|
\
|
+
n n
o o

5. Test
100
144
100
100
181 20
+
= Z
cal
28 . 1
562 . 1
2
44 . 2
2
= = =
6. Conclusion:
Since Z
cal
< Z
tab
; H
o
is accepted. There is no significance difference between means.

Page 19 of 46

Example:

A civil rights group in the city claims that a female college graduate earns less than a male college graduate.
To test this claim, a survey of starting salary of 60 male graduates and 50 female graduates was taken. It was
found that the average starting salary for female graduates was Rs. 29,500 with a standard deviation of Rs.
500 and the average salary for male graduates was Rs. 30,000 with a standard deviation of Rs. 600. At 1%
level of significance, test if the claim of this civil rights group is valid.

Solution:

H
o
: A female college graduate earns more than a male college graduate.
v/s
H
1
: A female college graduate earns less than a male college graduate. (ONE TAIL TEST)


Step 3: Test statistics

2
1
2 2
1 2
| |
( )
1 2
X X
Z
s s
n n

=
+
~N(0,1)

Step 4: Calculation

Given, Male graduates (n
1
) = 60 Female graduates (n
2
) = 50
Average salary of male graduates ( 1 x
) = 30,000
Average salary of female graduates ( 2 x
) = 29,500
Standard deviation in salary of male graduates (s
1
) = 600
Standard deviation in salary of female graduates (s
2
) = 500

Substituting the values we get

50
) 500 (
60
) 600 (
29500 30000
2 2
+
= Z = 4.767

Step 5: Inference

Page 20 of 46

Z
tab
= 2.33 (at 1% level of significance) and Z
cal
= 4.767

The table value at 1% level of significance is 2.33, is lesser than calculated value 4.767. There is no
sample evidence to accept H
0
.
We can conclude that a female college graduate earns less than a male college graduate.

Example 5.8.3:

Theatre owners in India know that a hit movie ran for an average of 70 days with a
standard deviation of 10 days in each city the movie was screened. A particular movie
distributor was interested in comparing the popularity of movie in his region with that of
the population. He chooses 75 theatres at random in the region and found a popular movie
ran for 72.5 days.
a. State appropriate hypotheses for testing whether there was significant difference
between theatres in the distributors region and the population.
b. At a 1% significance level, test these hypotheses.

Solution:

1. Null hypothesis Ho: = 70 where = 70

Alternate hypothesis H
A
: = 70

(two-tailed test)

2. Level of significance 1% Z
tab
= 2.58

3. Test Statistics
n
s
o

= Z

4. Given = 70,
s
= 72.5, o = 10, n = 75
1547 . 1
75
10
= =
n
o

5. Test
165 . 2
1547 . 1
5 . 72 70
=
= Z
cal

6. Conclusion:
Since Z
cal
(2.165) < Z
tab
(2.58); Ho is accepted

Page 21 of 46

Example

It is believed that 90% of potential customers are familiar with a Banks Logo. A study conducted drawing a
sample of 100 consumers revealed that only 70% recognized the Logo. Is this significantly less than the
expected proportion at 5% significance level?
Solution:
Step 1: Set up null and alternative hypothesis
H
0
: 90% of potential customers are familiar with a banks logo, i.e. t = 0.9
H
1
: Less than 90% of potential customers are familiar with a banks logo, i.e.t < 0.9
Example 5.8.4:

A ketchup manufacturer is in the process of deciding whether to produce a new extra spicy
brand of ketchup. The companys market research team found in a survey of 6000
households that 355 households would buy the extra spicy brand. In an earlier more
extensive study carried out 2 years ago showed that 5% of the households would buy the
brand then. At 2 % level of significance, should the company conclude that there is an
increased interest in the extra spicy flavour?

1. Null hypothesis Ho: P = P
s

Alternate hypothesis HA: P < P
s
(one-tailed test)

2. Level of significance 2 % Z
tab
= 2.05

3. Test Statistics
2
1
|
.
|
\
| P
P P
= Z
n
Q
s

4. Given P = 0.05, P
s
= 355 / 6000, = 0.05513, n = 6000, Q = 1 P = 0.95
0028 . 0
6000
95 . 0 05 . 0
2
1
2
1
=
|
.
|
\
|
=
|
.
|
\
| P
n
Q

5. Test
08 . 2
0028 . 0
05583 . 0 05 . 0
=
= Z
cal

6. Conclusion:
Since Z
cal
(2.08) > Z
tab
(2.05); Ho is rejected

Page 22 of 46


| |
(1 )
p
Z
n
t
t t
~ N(0,1)

Step 4: Calculation
Given, Sample size (n) = 100
Proportion of customers are familiar with a banks logo () = 0.9
Sample proportion (p) =0.7 q=1-p = 0.3

Substituting the values we get,
=

=
100
) 9 . 0 1 ( 9 . 0
9 . 0 7 . 0
Z 6.67
Step 5: Inference : Z
tab
= 1.645 (at 5% level of significance) Z
cal
= 6.67
Since the table value is lesser than the calculated value, there is no evidence to accept H
0
. We can
conclude that the proportion of consumers familiar with the logo is significantly less than 90% at 5%
significance level.

Page 23 of 46

Example

Out of 10,000 Kgs of tomatoes harvested 1000 Kg tomatoes were randomly selected. 8% of the selected
tomatoes were found to be rotten. But the farmer claims that only 7% are rotten. Is his claim tenable? (Test
at 5% level of significance)
Solution:

Ho: 7% tomatoes are rotten, i.e. = 0.07
H
1
: 7% tomatoes are not rotten, i.e. 0.07
Example 5.8.5:

Microsoft estimated 20,000 potential software buyers 40% planning to wait to purchase the
new OS Windows Vista, until an upgrade has been released. After an advertising campaign
to reassure the public, Microsoft surveyed 4000 buyers and found 1200 that are still
sceptical. At 5% level of significance can the company conclude that the population of
sceptical people had decreased? (Null hypothesis is rejected. Use z distribution).

1. Null hypothesis Ho: P
0
= P
s

Alternate hypothesis HA: P
0
> P
s

2. Level of significance 5% Z
tab
= 1.645

3. Test Statistics
2
1
2
1
1
|
.
|
\
|
N
N
|
.
|
\
| P
P P
= Z
n
n
Q
s

4. Given P
s
= 1200 / 4000 = 0.3, P = 0.40, Q = 0.60, n = 20,000, n = 4000
0069 . 0 8944 . 0 007745 . 0
1 20000
4000 20000
4000
6 . 0 4 . 0
2
1
2
1
= =
|
.
|
\
|
|
.
|
\
|

5. Test
49 . 14
0069 . 0
3 . 0 40 . 0
=
= Z
cal

6. Conclusion:
Since Z
cal
(14.49) > Z
tab
Proportion of Sceptical people has significantly decreased.

Page 24 of 46



| |
(1 )
*
1
p
Z
N n
n N
t
t t

=

~ N(0,1)

Step 4: Calculation

Given, Population size (N) = 10000 Sample size (n) = 1000
Population proportion () = 0.07 Sample proportion (p) = 0.08
q = 1-p = 1 0.08 = 0.92


306 . 1
1 10000
1000 10000
1000
) 07 . 0 1 ( 07 . 0
07 . 0 08 . 0
=

= Z

Step 5: Inference

Z
tab
= 1.96 (at 5% level of significance) and Z
cal
= 1.306

Since the table value is greater than calculated value there is no sample evidence to reject H
0
. We can
conclude that the framers claim that only 7% are rotten is correct at 5% significance level.

Page 25 of 46

Example 5.8.6:

A machine is designed so as to pack 200 ml of a medicine with a standard deviation of 5ml.
A sample of 100 bottles, when measured had a mean content of 201.3ml. Test whether the
machine is functioning properly using 5% level of significance.

1. Null hypothesis Ho: =
s

Alternate hypothesis HA: =
s
(two-tailed test)

2. Level of significance 5% implies Z
tab
= 1.96

3. Test Statistics
n
s
o

= Z

4. Given = 200,
s
= 201.3, o = 5, n = 100
5 . 0
100
5
= =
n
o

5. Test
60 . 2
5
13
5 . 0
3 . 201 200
= =
= Z
cal

6. Conclusion:
Since Z
cal
(2.60) > Z
tab
The machine is not functioning properly.

Page 26 of 46


(Ref: 5.7. I dentification of the Right Statistics for the Test)

a) Consider, Marketing G.Ms data on % of employee

i) n=100 Large sample
ii) Attribute
iii) Test for specified proportion.
iv) Infinite Population
v) Two tailed test

Solution:

The test is:

1. Null hypothesis H
o
: P=0.3

A
: P = 0.3

tab
= 1.96

3. Test Statistics
n
Q
P
P
P
= Z
1

4. Given P = 0.30, Q = 1-P = 0.70, N=1000, 27 . 0
1000
270
1
= = P
5. Test
07 . 2
01449 . 0
03 . 0
1000
7 . 0 3 . 0
27 . 0 30 . 0
= =
= Z
x
cal

6. Conclusion:
Since Z
cal
(2.07) > Z
tab
(1.96); H
o
is rejected.
There is evidence that the percentage of people using this companys talc is
reduced.


Page 27 of 46


b) On Personnel G.Ms, data on salary

i) Large sample
ii) Variable
iii) Between sample means
iv) Different population
v) Two tailed Test

Solution:

The test is:

o
:
1
=
2

A
:
1
=
2

tab
= 1.96

3. Test Statistics
2
2
2
1
2
1
2 1
n n
o o

+
= Z

4. Given n
1
= 500, n
2
= 300,
1
= 24300,
2
= 24000, o
1
= 200, o
2
= 300

5. Test
( ) ( )
300
300
500
200
24000 24300
2 2
+
= Z
cal
3 . 15
49 . 19
300
= =

6. Conclusion:
Since Z
cal
(15.3) > Z
tab
(1.96); H
o
is rejected. There is evidence that salary is not
equal to that of competitors.


Page 28 of 46


c) Personnel G.Ms: Data on efficiency

i) Large sample
ii) Attribute
iii) Test for specified proportion
iv) Infinite
v) One tailed

Solution:

The test is:

o
: P = P
1

A
: P > P
1

cal
= 1.96

3. Test Statistics
n
Q
P
P
P
= Z
1

4. Given P = 0.9, P
1
= 0.88, n = 460,

5. Test
44 . 1
0139 . 0
02 . 0
460
1 . 0 9 . 0
88 . 0 9 . 0
= =
= Z
x
cal

6. Conclusion:
Since Z
cal
(1.44) < Z
tab
(1.96), there is no evidence to reject Null hypothesis. There
is no improvement in efficiency percentage.


Page 29 of 46

Example
An insurance company believes that smokers are at high risk of facing heart diseases than non smokers in
men over 50 years of age. Accordingly, it is considering offering discounts in premiums on its life insurance
policies to non-smokers. However, before the decision can be made, an analysis is undertaken to justify its
claim that the smokers are at higher risk of heart disease than non-smokers. The company randomly selected
200 men which included 80 smokers and 120 non smokers. The survey indicated that 18 smokers suffered
from heart disease and 15 non-smokers suffered from heart disease. At 5% level of significance, can we
justify the claim of the insurance company that smokers are at high risk of heart disease than non smokers?

Solution:

H
0
: The smokers are not having higher incidence of heart diseases than non smokers.
i.e. Ho:
1

2

H
1
: The smokers are having higher incidence of heart diseases than non smokers.
i.e. H
1
:
1
>
2



1 2
| |
1 1
( )
1 2
p p
Z
pq
n n
=
+
~ N(0,1)

Step 4: Calculation

Given, Sample size (n
1
) = 80 No. of smokers suffered from heart disease (x
1
) = 18
Sample proportion (p
1
) = 225 . 0
80
18
1
1
= =
n
x


d) Production G.Ms: Data on Production rate.

Since sample size is 20 which is less than 30 and population variance is not known, we
will discuss this case under small sample test.

Page 30 of 46

Sample size (n
2
) = 120 No. of non-smokers suffered from heart disease (x
2
) = 15
Sample proportion (p
2
)

= 125 . 0
120
15
2
2
= =
n
x

2 1
2 2 1 1
n n
p n p n
p
+
+
= and q = 1 p

Substituting the values we get
( ) ( )
165 . 0
120 80
125 . 0 120 225 . 0 80
=
+
+
= p

q = 1 0.165 = 0.835

Substituting the values for p and q in the test statistic we get,

|
.
|
\
|
+
=
120
1
80
1
) 835 . 0 165 . 0 (
125 . 0 225 . 0
Z = 1.06586
Step 5: Inference

The table value at 5% level of significance is 1.96, is greater than calculated value 1.0658. There is
no sample evidence to reject H
0
.
We can conclude that the smokers are not having higher risk of heart diseases than non smokers.

5.9. Summary of Large Samples Tests

In this chapter, we have defined what is meant by hypothesis and sent the procedure for testing of
hypothesis. We have defined what is meant by significance level and types of errors. We have also seen
different types of tests, two tailed and one tailed and the circumstance these tests are done and the steps
involved in identifying the test.

Page 31 of 46

5.10. Introduction to Small Samples Tests

In the previous topics we learned, testing of hypothesis, when sample size is large using normal distribution.
However if the sample size is small, then the distribution of the statistics are far from normal and hence
normal test cannot be applied. Hence to deal with small samples tests of significance known as Exact
Sample Tests have been developed. For all practical purposes the sample is termed as small if n s 30.

It should be noted that the methods and theory of small samples are applicable to large samples, but the
reverse is not true.

5.10.1. t Distribution

The properties of t Distribution are:

- It is a continuous probability distribution
- t Statistic is defined as ( ) n
s
t f -
X
=

Where
( )
2
1
1
(
X X
=
n
S ; the probability density function is ( )
|
.
|
\
|
+
(
+ =
2
1
2
1
v
v
t
C t f
Where, C = Constant required to make the area under the curve equal to unity. v = n 1,
Degree of Freedom.

- The value of t ranges from - o to + o
- v is called the parameter of the distribution
- It is symmetrical about mean
- Its mean is zero
- Variance of the distribution is greater than one.
- It has larger areas at the tails compared to normal distribution and lower height at the mean.
- It tends to a normal distribution as n o.

The basic fundamental assumption in all Exact Sample Test is:

i) The parent population from which sample is drawn is normally distributed
ii) Sample / Samples is/are drawn at random
iii) They are independent of each other

The t Distribution was developed by W.S.Goosett in the pet name student. Therefore it is
known as students t Distribution.

Page 32 of 46

5.10.2. Uses of Small Samples Tests

5.11. Small Samples - Variable: Population S.D is not Known

Table 5.9
Test
No.
Description of Test Test Statistics Notes
1 Test for specified Value
Infinite population,
D.O.F: n -1
n
S
t
X
=
X Population proportion
= Population mean
2
2
1
|
|
.
|
\
|
X X
=
n
S
2 Test for specified Value
Finite population Latin,
D.O.F: n-1 2
1
1
|
.
|
\
|
N
N
X
=
n
n
S
t

N - Population size
3 Test between values
Independent samples,
D.O.F: n
1
+ n
2
2

2
1
2 1
1 1
|
|
.
|
\
|
+
Y X
=
n n
S
t
X -first sample mean
Y -second sample mean
( ) ( )
2
2 1
2 2
2
+
Y Y + X X
=
n n
S
2
2 1
2
2
2
1
2
1 2
+
+
=
n n
S n S n
S
4 Paired t test - Dependent
samples,
D.O.F: n -1
n
S
d
t
d
=
d Mean of difference
( )
2
2
1
d
d d
S
n

=

N sample size

A small samples test is used:

- To test a specified value
- To test the differences between values (independent sample)
- As a paired t test (dependent sample)
- To construct confidence interval for the estimates

Page 33 of 46

5.12. Examples

Example 5.12.1:

Random samples of 10 bags of fertilizer are found to have the following weight (kg) 55, 59,
60, 59, 54, 62, 58, 55, 56, and 55. Test at 5% level of significance whether the average
packing weight can be taken as 60 kg.

Solution:
Table 5.10
X D = X - 58 d
2

55 -3 9
45 +1 1
60 2 4
59 +1 1
54 -4 16
62 4 16
58 0 0
55 -3 9
56 -2 4
55 -3 9
-7 69

3 . 57
10
7
58 = =
E
+ A = X
n
d

( )
( )
12 . 7
10
7
69
9
1
1
1
2
1
2
2
1
2
2
=
(

=
(
=

S
n
d
d
n
S

The test is:
1. Null hypothesis Ho: X=
A
: X = (Two tailed test)

2. Level of significance 5 % and D.O.F 9 t
tab
= 2.262

3. Test Statistics
n
S
t
X
=

4. Given X= 57.3, = 60, S = 7.12, S / n = 0.8438

5. Test
2 . 3
8438 . 0
0 . 60 3 . 57
=
=
cal
t

6. Conclusion:
Since t
cal
(3.2) > t
tab
The mean of the population cannot be considered as 60 kg.

Page 34 of 46

Example 5.12.2:

Suppose in the above problem out of 1000 bags packed in a day a random sample of 10
was selected and the readings were as given above. Test whether the population average
weight is 50 kg.

Solution:

1. Null hypothesis Ho: X =
A
: X = (Two tailed test)

tab
= 2.262

3. Test Statistics
2
1
1
|
.
|
\
|
N
N
X
=
n
n
S
t

4. Given n = 10 N = 1000 X = 47.3 S / n = 0.8438
8362 . 0
1
2
1
= -
(
N
N
n
S n

5. Test
23 . 3
8362 . 0
0 . 50 3 . 47
=
=
cal
t

6. Conclusion
Since t
cal
(3.23) > t
tab
(2.262); Ho is rejected.

Page 35 of 46

Example 5.12.3:

Average bursting strength of 9 samples of paper was found to be 15.8 units and variance =
10.3. Can we say at 1% level of significance that it is a random sample drawn from a
population whose mean bursting strength is 17.5?

Solution:

A
: X =

tab
= 3.36

3. Test Statistics
1
=
n
S
X
t

4. Given X = 15.8, = 17.5, S
2
= 10.3, n = 8
135 . 1
8
3 . 10
= =
n
S

5. Test
498 . 1
135 . 1
5 . 17 8 . 15
=
=
cal
t

6. Conclusion:
Since t
cal
(1.498) < t
tab
(3.36); Ho is accepted
It can be considered as a random sample.

Page 36 of 46

Example 5.12.4:

Treatment A gave brightness index for a substance on 5 randomly selected samples as
60, 41, 38, 39, 42. Treatment B gave the same index on another 7 randomly selected
samples as 56, 42, 48, 69, 68, 64, 69, and 62. At 5% level of significance can we conclude
that Treatment B increases the brightness?

Solution:
7. Null hypothesis Ho: 1 X = 2 X
A
: X < Y (one tailed test)
8. Level of significance 5 % and D.O.F 5 + 7 2 = 10 t
tab
= 2.228
9. Test Statistics
2 1
2 1
/ 1 / 1 n n S
X X
t
+
=

10. Given
Table 5.11 Table 5.12
For Treatment A
X d = X - 48 d
2

56 -1 1
42 -15 225
48 -19 361
69 12 144
68 11 121
64 7 49
69 12 144
62 5 25
399 0 926
For Treatment B
X d = X 48 D
2

60 +14 196
41 -5 25
48 -2 4
39 -7 49
42 -4 16
230 0 290

( ) ( ) | | | | 6 . 121 926 290
10
1
2
1
2
2 2
2
1 1
2 1
2
= + = X X + X X
+
=
n n
S
S = 6 . 121 S 7 / 1 5 / 1 + = 11.03 x 0.3429 = 3.782
1 X = 46 2 X = 57

Page 37 of 46


5. Test
7 . 1
457 . 6
0 . 11
7
1
5
1
6 . 121
57 46
2
1
= =
(
|
.
|
\
|
+
=
cal
t

6. Conclusion:
Since t
cal
(1.7) < t
tab
(2.26); H
o
is accepted
Treatment B is not superior to A.

Example 5.12.5:

A sales manger wants to know whether a special promotional campaign is a success. He
had the following data. Test at 5 % L.O.S whether it is a success?

Table 5.13
Retail Outlets 1 2 3 4 5 6
Sales before campaign 60 58 41 52 38 63
Sales after campaign 66 65 40 55 39 68

Solution:
Table 5.14
Before After d = After - Before d
2

Campaign
60 66 6 36
58 65 7 49
41 40 -1 1
52 55 3 9
38 39 1 1
63 68 5 25
21 121

5 . 3
6
21
= = =

n
d
d and ( ) | | 5 . 9
6
441 121
5
1
/
1
1 2
2 2
=
(
=

n d d
n
S
d

2583 . 1 5833 . 1
5 . 9
= = =
n n
Sd


Page 38 of 46


1. Null hypothesis Ho: X= 0
1
: d > 0 (one tailed test)

tab
= 2.02

3. Test Statistics
n
Sd
d
t =

4. Test
782 . 2
2583 . 1
5 . 3
= =
cal
t

5. Conclusion:
Since t
cal
(2.78) < t
tab
There is a significance success due to campaign.

Page 39 of 46


For G.M production, on production rate

i) n = 20 (<30)
ii) Variable
iii) Test for specified mean
iv) Infinite population
v) One tailed test

Solution:

The test is:

1

A
: X <
1

2. Level of significance 5 % , for 19 D.O.F 8 t
tab
= 1.729

3. Test Statistics
n
S
t
1

=
4. Given = 1450
1
= 1400 n = 200 S = 200

5. Test
12 . 1
72 . 44
50
20
200
1400 1450
= =
=
cal
t
6. Conclusion:
Since t
cal
(1.12) < t
tab
(1.729); There is no evidence that production rate has
decreased.

General comment: The Director observes that

1. The percentage of consumer using his product has reduced significantly.
2. The salary paid to the employees is in par with competitors
3. Efficiency remains same.
4. Production rate also remain the same, Inspite of reducing the number of
employees


Page 40 of 46

5.13. Example of t-test on Excel Sheet

1. The Excel output for Example 5.12.1 is as follows:-

Figure 5.6

This implies that the weight of the bags is significantly lower than 60 kg.

2. Consider the weight of same age group of two different locations. Suppose we want
to test whether there is a significant difference in their means. We proceed as
follows to work on Excel Sheet.
Table 5.15
Location A 32 34 37 42 43 52 60 54 55 53
Location B 29 34 36 45 43 50 58 57 57 55

We get the output on the Excel Sheet as follows:-

Figure 5.6

The t calculated value is 0.48 which is less than t tabulated value. Therefore
there is no significant difference between the weights at 5% level of significance.


Page 41 of 46

Example

An automobile tyre manufacturer claims that the average life of their tyres is more than 20,000 kms. A
random sample of 16 tyres was tested and found to have a mean and standard deviation of 22,000 km and
5000 km respectively. Find whether manufacturers claim is valid at 5% level of significance.
Solution:

H
0
: The average life of tyres is equal to 20,000 kms, i.e. = 20,000 Kms
V/s
H
1
: The average life of tyres is not equal to 20,000 kms, i.e. 20,000 Kms



3. Suppose the above data relates to the sales of a particular product before and after
advertisement campaign then to test the effect of advertisement on sales we do paired t-test
and the Excel output is as follows:

Figure 5.7

The t calculated value is 0.39 which is less than t tabulated value. Therefore there is no
significant difference between the sales at 5% level of significance before and after
advertisement campaign.

Page 42 of 46


t
n
s
x
t ~

= (n 1) degree of freedom

Step 4: Calculation
Given, Sample size (n) = 16 Sample mean (
x
) = 22000
Sample standard deviation (s) = 5000 The average life of tyres () = 20000

6 . 1
16
5000
20000 22000
=
= t
Step 5: Inference
Table value at 15 degree of freedom and at 5% significance level of significance = 2.131, where as
the calculated value = 1.6.
Since table value is greater than calculated value, there is no sample evidence to reject H
0
.
At 5% level of significance, the average life of tyres is equal to 20,000 kms.

Page 43 of 46

Example

A company ABC of New Delhi goes for advertisement on Zee TV to be shown during prime time. It gets its
sales records of six months prior to advertising and of six months after advertisement, which is as follows:
Month 1 2 3 4 5 6
Sales before
advertisement
(Rs. in lakh)
43 20 35 45 52 47
Sales after
advertisement
(Rs. in lakh)
48 21 34 52 46 50
Test at 5% level of significance whether advertising has any effect on sales.
Solution:

H
o
: Advertisement has no effect on sales.
V/s
H
1
: Advertisement has effect on sales.



d
t
s
n
= ~ t
(n-1)
degree of freedom (df)

Where, d = Sales After advertisement Sales Before advertisement

Step 4: Calculation

Employee Sales after
advertisement
Sales before
advertisement
d = A-B
d- d

2
d d
| |
|
\ .

1 48 43 5 3.5 12.25
2 21 20 1 -0.5 0.25
3 34 35 -1 -2.5 6.25
4 52 45 7 5.5 30.25
5 46 52 -6 -7.5 56.25
6 50 47 3 1.5 2.25
Total 9 107.5

Page 44 of 46

5 . 1
6
9
= = d
Standard deviation (s) =
( )
1 6
5 . 107
1
2
n
d d
4.6368


6
6368 . 4
5 . 1
= t = 0.7924

Step 5: Inference

The t table value at 5% level with 5 df is 2.571 and the calculated value is 0.7924.
Since the table value is greater than calculated value, there is no sample evidence to reject Ho.
Therefore, advertisement has no effect on sales.

Example
Strength tested on two varieties of yarn gave the following results.
Sample Size Mean Sample Variance
Type A 4 52 42
Type B 9 42 56
Is there a significant difference in the mean? Test at 5 % level of significance.
Solution:

H
0
: There is no significant difference in the mean between the two types.
V/s
H
1
: There is significant difference in the mean between the two types.



Page 45 of 46

2
1
1 2
| |
1 1
( )
x x
t
S
n n

=
+
~ t
(n1+n2-2)
df

Where
2 2
1 1 2 2
1 2
( 1) ( 1)
2
n s n s
s
n n
+
=
+

Step 4: Calculation

Given, Type A sample size (n
1
) = 4 Type A sample variance (s
1
2
) = 42
Type A sample mean ( 1 x
) = 52 Type B sample mean ( 2 x
) = 42
Type B sample size (n
2
) = 9 Type B sample variance (s
2
2
) = 56

2 2
1 1 2 2
1 2
( 1) ( 1)
2
n s n s
s
n n
+
=
+
( ) ( )
2 9 4
56 1 9 42 1 4
+
+
= = 7.2237

Substituting values in test statistics we get,

=
+
=
9
1
4
1
2237 . 7
42 52
t 2.3037

Step 5: Inference

Table value at 11 df at 5% level of significance = 2.201 Calculated value = 2.3037
Since the table value is lesser than calculated value, there is no sample evidence to accept H
0
.
Hence, we can conclude that there is significant difference in the mean between the two types.

Page 46 of 46

5.14. Summary

In this unit we discussed the four tests available for small samples. These tests can be used for sample size (n
s 30) and samples whose population S.D are not known. The different tests are illustrated with examples.

5.15. References

http://www.rocw.raifoundation.org/management/mba/researchmethodology/lecture-notes/lecture-20.pdf

Unit 5 - Testing of Hypothesis - SLM

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) = 21.33 Population mean () = 21.3

) = 52 Type B sample mean ( 2 x

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