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MKT 502- MARKETING RESEARCH

INSTRUCTED BY
MD. ALAMGIR HOSSIN
FACULTY, CBA, IUBAT

PRESENTED BY
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MD. SAIDUR RAHMAN SAID
16204006, MBA
Spring 2017, IUBAT
Hypothesis Testing
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Allows us to use sample data to test a


claim about a population, such as
testing whether a population proportion
or population mean equals some
number.

Example: Is the true average amount


that students spent weekly on alcohol
$20?
Idea of Hypothesis Testing: Criminal Trial
Analogy
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First, state 2 hypotheses, the null


hypothesis (H0) and the alternative
hypothesis (HA)

H0: Defendant is not guilty.


HA: Defendant is guilty.
Criminal Trial Analogy
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(continued)
Then, collect evidence, such as finger prints,
blood spots, hair samples, carpet fibers, shoe
prints, ransom notes, handwriting samples, etc.

In statistics, the data are the evidence.


Then, make initial assumption.
Defendant is innocent until proven guilty.

In statistics, we always assume the null


hypothesis is true.
Criminal Trial Analogy
(continued)
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Then, make a decision based on the


available evidence.
If there is sufficient evidence (beyond a
reasonable doubt), reject the null
hypothesis. (Behave as if defendant is
guilty.)
If there is not enough evidence, do not
reject the null hypothesis. (Behave as if
defendant is not guilty.)
Hypothesis Testing: Statistical Approach
(6 basic steps)
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1. Formulate Null (Ho) and Alternative


(HA) Hypotheses.
2. Determine test criteria what test
procedure will be used and what
evidence is required to convince.
3. Collect data, summarize data and
measure discrepancy from initial
assumption.
4. Compute likelihood chance variation
would produce observed result,
i.e. find p-value.
5. Make decision and interpret your
findings.
STEP 1: Formulate Null and Alternative
Hypotheses (Ho and HA)
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Null Hypothesis (Ho)


Opposite of alternative hypothesis
Statement of nothing going on
Statement that reflects equality or the
status quo
IS ASSUMED TO BE THE TRUTH WHEN
CONDUCTING THE TEST!
STEP 1: Formulate Null and Alternative
Hypotheses (Ho and HA)
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Alternative Hypothesis (HA)


Also called the Research Hypothesis
Reflects what is believed to be the
case or what the researcher hopes
to show.
Statement of inequality or change
from status quo
States that a relationship or difference
exists.
Example: Grade inflation?
(Has mean GPA increased since 1990?)
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Is the average
Population of GPA 2.7 ?
5 million college (Imagine that 2.7 was
students mean GPA for U.S. college
students in 1990)

How likely is it that


100 students would
have an average
Sample of GPA as large as 2.9
100 college students
if the population
average was 2.7?
Example: Grade inflation?
Has mean GPA increased since 1990?
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current mean GPA of U.S. college students


H o : 2.7 (mean GPA now is same or
less than it was in 1990)
H A : 2.7 (mean GPA now is greater than it
was in 1990)
Alternative hypothesis reflects research hypothesis that
the mean GPA for college students is greater than it was
in 1990.
STEP 2: Determine test
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criteria
a) Choose significance level ()

b) Determine test procedure


that will be used
STEP 2 (a): Choose
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significance level
Typically is used which
means that if less than 1
study in 20 would produce
the observed result when the
null (Ho) is true, we would
then be convinced that the
assumed null is probably not
the case and we would
STEP 2(b): Determine test
procedure
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Common test procedures you might


be familiar with:
Z-Test (both one- and two-sample)

Chi-square test of independence

Paired t-Test

ANOVA (F-tests)

Wilcoxon or Mann-Whitney rank-

sum test

Example: Grade Inflation?

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STEP 3: Collect data
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and compute test statistic
Summarize all variables involved both
numerically and graphically
Look at distributional shape, as many
test procedures require approx.
normality for continuous variables.
Check for outliers.
Compute the test statistic from our
observed data.
Example: Grade inflation?
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(Has mean GPA increased since 1990?)
Is the average
Population of GPA 2.7 ?
5 million college (Imagine that 2.7 was
students mean GPA for U.S. college
students in 1990)

How likely is it that


100 students would
have an average
Sample of GPA as large as 2.9
100 college students if the population
Mean=2.9 SD = .6
average was 2.7?
Example: Grade inflation?
(Has mean GPA increased since 1990?)
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X 2.91 GPA distribution is only


slightly left-skewed and
.61 looks for reasonably normal.

n 100

How likely are we to obtain a


GPA
sample mean this large
sampling from a population
whose mean ?
Example: Grade Inflation (contd)
19 Test Statistic for a Single Population Mean ()
Test Statistic
(estimate from data) - (parameter value assuming H o is true)
SE(estimate)
X - o X o
z
SE(X)
n
2.91 - 2.7
3.44
.61
100
STEP 4: Find critical value
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The critical value is the


probability that chance
variation alone would produce
a test statistic value as
extreme or more extreme than
the one observed assuming the
null hypothesis is true.
The underlined part of the
Critical values and sample size

Normal
Student t values
value
t according to sample
z
size
Level of
10 20 30 40
confidence
99% 3.17 2.85 2.75 2.70 2.58
95% 2.23 2.09 2.04 2.02 1.96
90% 1.81 1.72 1.70 1.68 1.64

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Example: Grade Inflation (contd)
critical value calculation and interpretation
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a) Our assumption that the mean GPA is


still 2.70 is wrong, and it is actually the
case that the mean GPA of U.S. college
students has increased from where it
was in 1990. Which makes the observed
result more plausible.
STEP 5: Make decision and
interpret
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Decision rule based on p-values:


If calculated z < Tabulated z

we Reject Ha in favor of the


null.
If calculated z > Tabulated z

we Reject Ho and conclude


there is sufficient evidence to
Note: This is true for ALL statistical tests!
support the alternative.
STEP 5: Make decision and
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interpret
Decision:
Because our critical value = 1.645<

3.44 we reject the null hypothesis in


favor of the alternative.
Interpretation:
We conclude that the mean GPA of

U.S. college students today is greater


than 2.70, which is what is was back in
1990.
STEP 5: Make decision and
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What we have decided is that we have
statistically significant evidence (z =
1.645) to conclude the mean GPA has
increased from what is was in 1990.

Follow-up Questions:
1. How much larger is it?
2. Is it a large enough increase that we
actually care?
3. Does this result tell us that grades in U.S.
college and universities are being inflated
by professors?