HYPOTHESIS
TESTING
Steps in conducting hypothesis testing:
• State the null and alternative hypothesis.
• Choose the level of significance 𝛼, and the sample size
• Determine the critical value or 𝑝 − 𝑣𝑎𝑙𝑢𝑒
• Determine the test statistic and sampling distribution.
• Compute the test value.
• Make a statistical decision.
• State the conclusion.
One Sample 𝒛 test
𝑜𝑏𝑠𝑒𝑟𝑣𝑒𝑑 𝑣𝑎𝑙𝑢𝑒−𝑒𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑣𝑎𝑙𝑢𝑒
Formula: 𝑇𝑒𝑠𝑡 𝑣𝑎𝑙𝑢𝑒 =
𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑒𝑟𝑟𝑜𝑟
𝑥−𝜇
𝑧= 𝜎
𝑛
where: 𝑧 = 𝑜𝑛𝑒 𝑠𝑎𝑚𝑝𝑙𝑒 𝑧 𝑡𝑒𝑠𝑡
𝑥 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑚𝑒𝑎𝑛
𝜇 = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑎𝑛
𝜎 = 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛
𝑛 = 𝑠𝑎𝑚𝑝𝑙𝑒 𝑠𝑖𝑧𝑒
σ²= population variance
Assumptions in One Sample z test:
• Subjects are randomly selected.
• Population are normally distributed.
• The population should be known.
• Cases of the samples should be independent.
• Sample size should be greater than or equal to 30.
Example 1
A. By Critical Value Method
The leader of the association of jeepney drivers claims that the
average daily take home pay of all jeepney drivers in Pasay City is
𝑃 400.00. A random sample of 100 jeepney drivers in Pasay City
was interviewed and the average of daily take home pay of these
drivers is found to be 𝑃 425. Use a 0.05 significance level to find out
if the average daily take home pay of all jeepney drivers in Pasay
City is different from 𝑃 400.00. Assume that the population
variance is 𝑃 8,464.00
• Hₒ = 400
• Hₐ ≠ 400
α = 0.05
𝒙 = 425
𝝁 = 400
σ = 92
n = 100
𝑥−𝜇
𝑧= 𝜎
𝑛
425−400
𝑧= 92
100
25
𝑧=
92
10
𝑧 = 2.72
α = 0.05
𝜶
= 𝟎. 𝟎𝟐𝟓
𝟐
0.5 – 0.025
= 0.475 or 0.4750
𝒛∝ = 1.96
𝟐
𝑧 = 2.72
𝒛∝ = 1.96
𝟐
Rejection Rejection
region region
Non-rejection Region
∝
= 0.025 ∝
2 μ =400 = 0.025
2
1.96 0 1.96
Critical value Critical value
2.72
Conclusion
Since the computed test statistics, z = 2.72 falls
within the rejection region, reject the null
hypothesis Hₒ.
Therefore we conclude that the daily average take
home pay of jeepney drivers in not equal to Ᵽ400
Example 1
B. By p-Value Method
The leader of the association of jeepney drivers claims that
the average daily take home pay of all jeepney drivers in
Pasay City is 𝑃 400.00. A random sample of 100 jeepney
drivers in Pasay City was interviewed and the average of
daily take home pay of these drivers is found to be 𝑃 425.
Use a 0.05 significance level to find out if the average daily
take home pay of all jeepney drivers in Pasay City is
different from 𝑃 400.00. Assume that the population
variance is 𝑃 8,464.00
Rules:
a) If p-value ≤ α , Reject Hₒ
b) If p-value > α , Reject Hₒ
𝑧 = 2.72
Looking into the Standard Normal table (z)
= 0.4967
Getting the p-value:
0.5 – 0.4967
= 0.0033
compare the p-value with :
α = 0.05
Conclusion
We reject null hypothesis H, since 0.0033 is less
than 0.05. therefore we conclude that the
average daily take home pay of jeepney drivers is
not equal to Ᵽ400.
Example 1
According to a study done last year, the average
monthly expenses for mobile phone loads of high
school students in Manila was 𝑃 350.00. A Statistics
student believes that this amount has increased since
January of this year. Is there a reason to believe that
this amount has really increased if a random sample of
60 students has an average monthly expenses for
mobile phone loads of 𝑃 380.00? Use a 0.05 level of
significance. Assume that the population standard
deviation is 𝑃 77.00.
Hₒ = 350 𝑥−𝜇
Hₐ > 350 𝑧= 𝜎
𝑛
α = 0.05
𝑧=
380 − 350
𝒙 = 380 77
𝝁 = 350 60
σ = 77 𝑧 = 3.02
n = 60
• 0.5 – 0.05 = 0.45
• (1.64 + 1.65)÷ 2 = 1.645
Z= 1.645
1.645
3.02
α = 0.05
Non-Rejection
Region
μ =350 1.645
1.645
Conclusion
Because the computed test statistics z = 3.02
falls within the rejection region, reject the null
hypothesis. Conclude that the average monthly
expenses for mobile phone loads of high school
students in manila is more than Ᵽ350.00. this
result is considered to be significant at α = 0.05
level