Applied Data Science
Module 2: Data Exploration
Machhindranath Patil, PhD. IIT Bombay
A Department Level Elective offered by Department of Computer Engineering
SEMESTER-VIII (2026)
Normal Distribution in Inferential Statistics
Inferential statistics involves making predictions about a population based on sample
data. The normal distribution is foundational to:
▶ Confidence Intervals: A range used to estimate unknown population parameters
like the mean.
▶ Hypothesis Testing: Methods like Z-tests, t-tests, and ANOVA determine
statistical significance.
▶ Central Limit Theorem (CLT): For large samples (n ≥ 30), the sampling
distribution of the mean is approximately normal regardless of population shape.
Null and Alternative Hypotheses
Null Hypothesis (H0 )
Represents the status quo or ”no effect” position. It is the default assumption that
must be disproven. It always states ”no difference” exists.
Alternative Hypothesis (Ha )
Contradicts H0 and represents the research claim or suspected relationship that the
researcher aims to support.
Directionality of Ha :
▶ Two-tailed: Indicates a difference exists without specifying direction (µ ̸= µ0 ).
▶ One-tailed: Specifies the direction of the difference (µ > µ0 or µ < µ0 ).
Type-I and Type-II Errors
Testing hypotheses involves two potential risks:
▶ Type-I Error (α): Occurs when H0 is true, but it is incorrectly rejected. The
probability α is the level of significance.
▶ Type-II Error (β): Occurs when H0 is false, but it is incorrectly accepted.
▶ Power of the Test: Defined as 1 − β, the probability of correctly rejecting a false
null hypothesis.
Confidence Interval for Mean
Question: A company wants to estimate the average time spent on its website. A
random sample of n = 50 users has a sample mean x̄ = 10 minutes and known
population standard deviation σ = 2.5 minutes. Construct a 95% confidence interval
for the true mean.
Step 1: Specify the confidence level.
For a 95% confidence level,
α = 1 − 0.95 = 0.05, α/2 = 0.025.
Step 2: Find the critical Z-value.
The given Z-table provides the area between the mean and Z . Hence, we compute
0.5 − α/2 = 0.5 − 0.025 = 0.475.
From the Z-table, the area 0.475 corresponds to
Zα/2 = 1.96.
Confidence Interval for Mean
Step 3: Write the confidence interval formula.
σ
CI = x̄ ± Zα/2 √ .
n
Step 4: Substitute the given values.
2.5
CI = 10 ± 1.96 √ = 10 ± 0.693.
50
Step 5: State the confidence interval.
CI = (9.31, 10.69).
Conclusion: We are 95% confident that the true average time spent on the website
lies between 9.31 and 10.69 minutes.
Confidence Interval for Proportion
Question: A poll of 1000 voters shows that 530 voters support a candidate. Construct
a 95% confidence interval for the true population proportion of supporters.
Step 1: Compute the sample proportion.
530
p̂ = = 0.53, n = 1000.
1000
Step 2: Specify the confidence level.
For a 95% confidence level,
α = 1 − 0.95 = 0.05, α/2 = 0.025.
Step 3: Obtain the critical Z-value.
Since the Z-table gives the area between the mean and Z , we calculate
0.5 − α/2 = 0.5 − 0.025 = 0.475.
From the Z-table, the area 0.475 corresponds to
Zα/2 = 1.96.
Confidence Interval for Proportion
Step 4: Write the confidence interval formula.
r
p̂(1 − p̂)
CI = p̂ ± Zα/2 .
n
Step 5: Substitute the values.
r
0.53(1 − 0.53)
CI = 0.53 ± 1.96 = 0.53 ± 0.031.
1000
Step 6: State the confidence interval.
CI = (0.499, 0.561).
Conclusion: We are 95% confident that the true proportion of voters supporting the
candidate lies between 49.9% and 56.1%.
Z and T tests For Single Mean in Hypothesis Testing
Z-test: Used when population variance is known and samples are large (n ≥ 30).
X̄ − µ0
Z= √
σ/ n
t-test: Used when sample size is small (n < 30) and population variance is unknown.
X̄ − µ0
t= √
S/ n
Decision: If the absolute value of the statistic exceeds the critical value (Zα or tα ),
reject the null hypothesis.
Left-Tailed Test
Question: A machine is designed to fill bottles with a mean volume of 500 ml. A
random sample of n = 40 bottles has a mean volume of x̄ = 495 ml with known
population standard deviation σ = 10 ml. Test at the 5% level of significance whether
the machine underfills.
Step 1: Formulate the hypotheses.
Since we are testing for underfilling, this is a left-tailed test.
H0 : µ = 500, Ha : µ < 500.
Step 2: Specify the level of significance.
α = 0.05.
Step 3: Determine the critical value.
For a left-tailed test at α = 0.05, the critical Z-value is
Zα = −1.645.
Left-Tailed Test
Step 4: Compute the test statistic.
x̄ − µ0 495 − 500
Z= √ = √ = −3.16.
σ/ n 10/ 40
Step 5: Make the decision.
Since
Z = −3.16 < −1.645,
the test statistic falls in the critical region.
Conclusion: The null hypothesis is rejected at the 5% level of significance. There is
sufficient statistical evidence to conclude that the machine significantly underfills the
bottles.
Two-Tailed Test
Question: A medicine is claimed to have a potency of 250 mg. A random sample of
n = 36 tablets has a mean potency of x̄ = 252 mg with population standard deviation
σ = 5 mg. Test at the 5% level of significance whether the potency differs from the
claimed value.
Step 1: Formulate the hypotheses.
Since deviation in either direction is of interest, this is a two-tailed test.
H0 : µ = 250, Ha : µ ̸= 250.
Step 2: Specify the level of significance.
α = 0.05, α/2 = 0.025.
Step 3: Determine the critical values.
The Z-table used gives the area between the mean and Z . Hence,
0.5 − α/2 = 0.5 − 0.025 = 0.475.
Two-Tailed Test
From the Z-table, the corresponding critical value is
Zα/2 = 1.96.
Thus, the critical region is
|Z | > 1.96.
Step 4: Compute the test statistic.
x̄ − µ0 252 − 250
Z= √ = √ = 2.4.
σ/ n 5/ 36
Step 5: Make the decision.
Since
|Z | = 2.4 > 1.96,
the test statistic lies in the critical region.
Conclusion: The null hypothesis is rejected at the 5% level of significance. There is
sufficient statistical evidence to conclude that the medicine potency differs significantly
One-Sample t-Test
Question: A battery brand claims that the mean battery life is 100 hours. A sample of
n = 10 batteries has a mean life x̄ = 96 hours and sample standard deviation s = 5
hours. Test at the 5% level of significance whether the mean life is less than 100 hours.
Step 1: Formulate the hypotheses.
Since we are testing whether the mean is less than the claimed value, this is a
left-tailed test.
H0 : µ = 100, Ha : µ < 100.
Step 2: Specify the level of significance.
α = 0.05.
Step 3: Determine degrees of freedom and critical value.
df = n − 1 = 10 − 1 = 9.
One-Sample t-Test
From the t-table, for a one-tailed test at α = 0.05 and df = 9,
t0.05,9 = 1.833.
Since this is a left-tailed test, the critical value is −1.833.
Step 4: Compute the test statistic.
x̄ − µ0 96 − 100
T = √ = √ = −2.53.
s/ n 5/ 10
Step 5: Make the decision.
Since
T = −2.53 < −1.833,
the test statistic lies in the critical region.
Conclusion: The null hypothesis is rejected at the 5% level of significance. There is
sufficient evidence to conclude that the mean battery life is significantly less than 100
hours.
One-Sample t-Test (Two-Tailed
Question: A city claims that the average daily household water usage is 150 liters. A
random sample of n = 12 households has a mean usage x̄ = 160 liters and sample
standard deviation s = 15 liters. Test at the 5% level of significance whether the mean
usage differs from 150 liters.
Step 1: Formulate the hypotheses.
Since deviation in either direction is of interest, this is a two-tailed test.
H0 : µ = 150, Ha : µ ̸= 150.
Step 2: Specify the level of significance.
α = 0.05, α/2 = 0.025.
Step 3: Determine degrees of freedom and critical value.
df = n − 1 = 12 − 1 = 11.
One-Sample t-Test (Two-Tailed)
From the t-table, for a two-tailed test at α = 0.05 and df = 11,
t0.025,11 = 2.201.
Thus, the critical region is
|T | > 2.201.
Step 4: Compute the test statistic.
x̄ − µ0 160 − 150
T = √ = √ = 2.31.
s/ n 15/ 12
Step 5: Make the decision.
Since
|T | = 2.31 > 2.201,
the test statistic lies in the critical region.
Conclusion: The null hypothesis is rejected at the 5% level of significance. There is
sufficient statistical evidence to conclude that the average daily household water usage
F-Distribution and ANOVA
F-Distribution: Ratio of two chi-square distributions divided by their respective
degrees of freedom. It is always positively skewed and non-negative.
ANOVA: A statistical method used to compare the means of three or more groups.
▶ H0 : µ 1 = µ 2 = · · · = µ k .
▶ Ha : At least one group mean is significantly different.
▶ F-ratio: F = Between-group variance
Within-group variance
Example: F-test for Variances
Problem: Test if two manufacturing processes have the same variance.
▶ Process A: n = 15, S 2 = 20.
▶ Process B: n = 12, S 2 = 12.
Calculation:
S12 20
F = 2
= = 1.67
S2 12
Decision: The critical value at α = 0.05 is 2.54. Since 1.67 < 2.54, we fail to reject
the null hypothesis. The variances are similar.