11 - 1

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 2

When you have completed this chapter, you

will be able to:
1. Explain the the difference between dependent and
independent samples.

2. Conduct a test of hypothesis and obtain a confidence

interval estimate for the difference between
two population means using independent samples.
two population means using matched pair sample.
two population proportions.

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 3
HypothesisTesting
Hypothesis Testing

Step 11
Step
State the
State the null
null and
and alternate
alternate hypotheses
hypotheses

Step 22
Step Select the
Select the level
level of
of significance
significance

Step 33
Step Identify the
Identify the test
test statistic
statistic

Step 44
Step State the
State the decision
decision rule
rule

Step 55
Step Compute the
Compute the value
value of
of the
the test
test statistic
statistic
and make
and make aa decision
decision

Donot
Do notreject
rejectHH00 RejectHH00and
Reject andaccept
acceptHH11
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 11 - 4

We wish
We wish to
to know
know whether
whether the
the
the distribution
the distribution of
of the
the
differences in
differences in sample
sample
means
means has aa mean
has of 00..
mean of

If both samples contain

at least 30 observations
we use the z distribution
as the test statistic.

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 5

No assumptions about the

of the populations are required.

The samples are from independent populations.

The formula for computing the value of z is:

X X
1 2
z s2 s22
1
n1 n2

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 6

Two colleges are located in York Region.

The local paper recently reported that the
mean starting salary of a graduate
from College 1 is $38,000
with a standard deviation of
$6,000 for a sample of
The same article 40
reported the
graduates.
mean starting salary of a graduate from
College 2 is $35,000 with a standard
deviation of $7,000 for a sample of 35 graduates.
At the .01 significance level can we conclude the
mean salary of College 1 is more?
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 11 - 7
HypothesisTest
Hypothesis Test

Step 11
Step Statethe
State thenull
nulland
andalternate
alternatehypotheses
hypotheses H0: 1 = 2
H1: 1 > 2
Step 22
Step Selectthe
Select thelevel
levelof
ofsignificance
significance = 0.01
Step 33
Step Identifythe
Identify thetest
teststatistic
statistic Because both samples are more
than 30, the test statistic is Z
Step 44
Step Statethe
State thedecision
decisionrule
rule Reject H0 if z > 2.33
X X
Step 55
Step Computethe
Compute thetest
teststatistic
statistic z
1 2

andmake
makeaadecision
decision s 12 s 22
and
n1 n2

$38,000 - $35,000
z
($6,000) ($7,000) = 1.98
2 2

40 35
Do not reject the null hypothesis; insufficient evidence.
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 11 - 8
The p-value
The p-value is:
is:

Step 44
Step Statethe
State thedecision
decisionrule
rule

Look up in
Table

p(z>>1.98)
p(z 1.98) = .5000 - .4761
== .0239
.0239
Since pp of
Since of .0239
.0239 isis greater
greater
than the
than the chosen
chosen alphaalpha of
of
0.01, there
0.01, there isis insufficient
insufficient
evidence to
evidence to reject
reject H
H00
0 1.98
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 11 - 9
Small Sample
Small Sample Tests
Tests of
of Means
Means

If one or more of the samples contain

less than 30
observations we use
the t distribution as
the test
Required
Required statistic.
Assumptions:
Assumptions:
Both populations must follow the normal distribution.
The populations must have equal standard deviations.
The samples are from independent populations.

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 10
Small Sample
Small Sample Tests
Tests of
of Means
Means
Finding the value of the test statistic
Two steps
Two steps needed:
needed:
Pool the sample variances
( n 1) s1
2
( n 1) s 2

sp
2 1 2 2
n1 n2 2
Determine the value of T from the formula
X1 X2
T
2 1 1
s p n
1
n2

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 11

A recent EPA study compared the highway fuel

economy of domestic and imported passenger cars.

A sample of 15 domestic cars revealed a mean of

33.7 mpg with a standard deviation of 2.4 mpg.

A sample of 12 imported cars revealed a

mean of 35.7 mpg with a standard deviation of 3.9.
At the
At the .05
.05 significance
significance level
level can
can the
the EPA
EPAconclude
conclude
that the
that the mpg
mpg isis higher
higheron
on the
the imported
imported cars?
cars?

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 12
HypothesisTest
Hypothesis Test

Step 11
Step Statethe
State thenull
nulland
andalternate
alternatehypotheses
hypotheses H0: d = 1
H1: d < 1
Step 22
Step Selectthe
Select thelevel
levelof
ofsignificance
significance = 0.05
Step 33
Step Identifythe
Identify thetest
teststatistic
statistic Because both samples are less
than 30, the test statistic is t
Step 44
Step Statethe
State thedecision
decisionrule
rule Reject H0 if t < 1.708
There are 25 d.f.
Step 55
Step Computethe
Compute thetest
teststatistic
statistic
andmake
and makeaadecision
decision Pooled Variances
( n 1) s1
2
( n 1) s 2

sp
2 1 2 2
n1 n2 2
Solution continues
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 11 - 13
HypothesisTest
Hypothesis Test

Step 55
Step Computethe
Compute thetest
teststatistic
statistic
andmake
and makeaadecision
decision Pooled Variances

( n 1) s1
2
( n 1) s 2

sp
2 1 2 2
n1 n2 2
s p (151)(2.4) (121)(3.9)
2 2 2
9.918
15 12 2
X1 X2 33 .7 35 .7
T
Compute T
Compute T
1 1
=
1 1
2
s p n1 n2 9 .918 15 12
H00cannot
H cannotbe
berejected
rejectedinsufficient
insufficientevidence.
evidence.
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 HypothesisTesting
Hypothesis TestingInvolving
Involving 11 - 14

PairedObservations
Paired Observations

Independentsamples
Independent samples Dependentsamples
Dependent samples
aresamples
are samples aresamples
are samples
thatare
that arenot
not thatare
that arepaired
paired
related
related in
in orrelated
or related
anyway
any way insame
in samefashion
fashion
Examples
Examples
If you
If you wished
wished to
to measure
measure
the effectiveness
effectiveness ofof aa new
new IfIfyou
youwished
wishedtotobuy
buyaacar,
car,
the youwould
you wouldlook
lookat
atthe
the
diet, you
diet, you would
would weigh
weigh atat samecar carat
attwo
two (or
(ormore)
more)
same
the start
the start and
and at
at the
the finish
finish differentdealerships
different dealerships
of the
of the programme!
programme! andcompare
and comparethethe
prices.
prices.
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 HypothesisTesting
Hypothesis TestingInvolving
Involving 11 - 15

PairedObservations
Paired Observations

Use the following test when

the samples are dependent:
D
T
sD / n

D is the mean of the differences

sD is the standard deviation of the differences
n is the number of pairs (differences)
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 An independent testing agency 11 - 16
is comparing the daily rental cost for
renting a compact car from Hertz and Avis.
A random sample of eight cities
revealed the following information:
City Hertz ($) Avis ($)
Halifax $42 $40
At the .05 Quebec City $56 $52
significance
level, can the Kingston 45 43
testing agency Toronto 48 48
conclude that Winnipeg 37 32
there is a Calgary 45 48
difference in the Saskatoon 41 39
rental charged? Vancouver 46 50

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 17
HypothesisTest
Hypothesis Test

Step 11
Step Statethe
State thenull
nulland
andalternate
alternatehypotheses
hypotheses H0: D = 0
H1: D 01
Step 22
Step Selectthe
Select thelevel
levelof
ofsignificance
significance = 0.05
Step 33
Step Identifythe
Identify thetest
teststatistic
statistic Because both samples are less
than 30, the test distribution is t
Step 44
Step Statethe
State thedecision
decisionrule
rule Reject H0 if T < -2.365
or T > 2.365
There are 7 d.f.
Step 55
Step Computethe
thetest
teststatistic
statistic
Compute
D
andmake
and makeaadecision
decision
T
sD / n

Solution continues
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 11 - 18
HypothesisTest
Hypothesis Test

Step 55
Step Computethe
thetest
teststatistic
statistic D
T
Compute
andmake
makeaadecision
decision
and sD / n
City Hertz ($) Avis ($) D D2
Halifax $42 $40 2 4
Quebec City $56 $52 4 16
Kingston 45 43 2 4
Toronto 48 48 0 0
Winnipeg 37 32 5 25
Calgary 45 48 -3 9
Saskatoon 41 39 2 4
Vancouver 46 50 -4 16
Solution continues
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 11 - 19
HypothesisTest
Hypothesis Test
Step 55
Step Compute the
Compute the test
test statistic
statistic and
and make
make aa decision
decision
D D2 D 8.0
D 1 . 00
2 4 n 8
4 16 2
D 78 82
2 4 s D2 n 8 = 3.1623
0 0 D
n 1 8 1
5 25
-3 9 D 1 . 00
2 4 T T
sD / n 3 . 1623 8
-4 16
8 78
Because0.894
Because 0.894<<2.365,
2.365,we
wecan
cannot
notreject
rejectHH0.0.
Thereisisno
There nosignificant
significantdifference
differencein
inthe
theprices
prices
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 11 - 20
TwoSample
Two SampleTests
Testsof
ofProportions
Proportions

We investigate
We investigate whether
whethertwo
two samples
samples came
came from
from
populations with
populations with an
an equal
equal proportion
proportion of
of success.
success.
The two samples are pooled using the following formula:
X1 X 2
p
n1 n2
XX11 and
and XX22refer
referto
to the
the number
numberof of successes
successesin
in the
the
respective samples
respective samples nn11and
and nn22
p 1 p 2
z
1
p (1 p )
Test Statistic n
1 n 2

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 21

Are unmarried workers more likely to be

absent from work than married workers?

A sample of 250 married workers showed

22 missed more than 5 days
last year, while a sample of 300
unmarried workers showed 35 missed more
than five days.
Use a .05 significance level.

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 22
HypothesisTest
Hypothesis Test

Step 11
Step Statethe
State thenull
nulland
andalternate
alternatehypotheses
hypotheses H0: pu = pm
H1: Pu Pm
Step 22
Step Selectthe
Select thelevel
levelof
ofsignificance
significance = 0.05
Step 33
Step Identifythe
Identify thetest
teststatistic
statistic Because both samples are large
the z distribution is used.
Step 44
Step Statethe
State thedecision
decisionrule
rule
Reject H0 if z > 1.645
Step 55
X1 X 2
Step Computethe
Compute thetest
teststatistic
statistic

p
andmake
and makeaadecision
decision

n1 n 2

Solution continues
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 11 - 23
HypothesisTest
Hypothesis Test
X 1 X 2
Step 55
Step Computethe
Compute thetest
teststatistic
statistic
p
andmake
and makeaadecision
decision
n1 n 2
22 + 35
250 + 300
.1036
35 22
p 1 p 2 300 250
z
1 .1036 (1 .1036 ) .1036(1.1036)
p (1 p ) n n
1 2 300 250
== 1.10
1.10

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 24
HypothesisTest
Hypothesis Test

The p-value is: P(z > 1.10)

= .5000 - .3643 = .1457

The null hypothesis is not rejected.

We cannot conclude that a higher
proportion of unmarried workers miss
more days in a year than the married
workers.

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

 11 - 25
Test your
Test your learning
learning

on
on
k
CClilcickwww.mcgrawhill.ca/college/lind

Online Learning Centre

for quizzes
extra content
data sets
searchable glossary
access to Statistics Canadas E-Stat data
and much more!

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 11 - 26

This completes
This completes Chapter
Chapter 11
11

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.