E(z) = m0z (t)|t=0

t2
m0z (t) = te 2

m0z (t)|t=0 = 0

VAR(X)

= E(z 2 ) − (E [z])2

E z 2 = m00z (t)|t=0
 
but

now m00z (t)|t=0 = 1 + 0 = 1

∴ var(z)1 + 0 − 02 = 1

0.5 STATISTICAL INFERENCE

STATISTIC A statistic is a function of one or more random variables involv-

ing any unknown parameter e.g n i.e x or σ 2
P
xi

A researcher has always xed ideas about a certain population based on

prior experiments, surveys /experience .
There is need to ascertain whether these ideas /claims are correct or not
by collecting information in the form of data.
A statistical test is a procedure governed by certain rules which leads to
take a decision about the hypothesis for its acceptance r rejection on the
basis of sample values.

97
 Test of hypothesis plays an important role in industry..
Hypothesis is an assertion or conjecture about the parameters of popula-
tion distributions
We have two hypothesis

1. Null hypothesis-A hypothesis which is actually tested for acceptance or

rejection.I s denoted by H0
It expresses the idea that an observed dierence is due to chance.

2. ALTERNATIVE Hypothesis:Is a statement about the population pa-

rameter or parameters which gives alternative to the null hypothesis
H0 wihithe range of pertinent values of the [Link] is denoted by
HA or H1
It says the dierence is real.
P-VALUE OF A TEST:Is the probability of getting a big test statistic
assuming a null hypothesis to be right .P is not the chance of the null
hypothesis being right.
If the statistical hypothesis completely species the distribution ,it is
called a simple hypothesis otherwise t is called a composite hypothesis.

To make a test of signicance you need to

Set up the null hypothesis
Pick a test statistic
Compute the observed signicance level p.
The choice of tests statistic depends on the model and the hypothesis
being considered.
TYPES OF ERRORS

1. TYPE I ERROR:Reject H0 when it is true.

2. TYPE II ERROR :Reject H0 when t is false.

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LEVEL OF SIGNIFICANCE:Is the quantity of risk of the type I error which
we are ready to tolerate in making a decision about H0
It is conventionally chosen as 5% or 1%
5% is moderate precision
1% is high precision
STUDENTS T DISTRIBUTION
We have discussed the normal [Link] need µ and σ o dene it.
z = X−µσ/√n is a normal variate mean 0 and variance 1 .i.e z ∼ N (0, 1)

In practice σ is not known and in such a case only option is use S sample
estimate
√
of S.d
n(X−µ)
s
is approximately normal if n is large.
√
If n is not large then ( s ) is distributed as t.
n X−µ

s/√n where S = n−1 Xi − X t is widely used and the distribu-

2
t = X−µ 2 1
P

tion of t is called t distribution

The density function of variable t with k=n-1 degrees of freedom is
1 1
f (t) = √ 1 k


k+1 , −∞ < t < ∞
kB ,
2 2 1+ t2 2
k

Degrees of freedom are the number of independent observations in a set of

observations.
Γ1ΓK ΓπΓ k
where B 12 , k2 = Γ(2K+12 ) = Γ( K+12 )


2 2
PROPERTIES OF T DISTRIBUTION
It is bell shaped just like the normal with its tails a bit higher than the
normal.
It is uni-modal
The probability distribution symmetrical about t=0

99
It tends to normal as k increases.

T-TEST

Student t is deviation of estimated mean from its population mean expressed

in standard deviation
E.g if we want to test
H0 : µ = µ0
vs
H1 : µ 6= µ0

100
 µ0 is an assumed value considered to t µ

X − µ0
tn−1 =
s
√

n X − µ0
= tn−1 =
s
s

n (n − 1)
= tn−1 = X − µ0 P
2
X −X

Whatever value we get we compare it with a tabulated value .

If we calculated value is greater than the tabulated we reject the null
hypothesis.
EXAMPLE

1. The life expectancy of people in the year 1970 in Brazil was expected be
50 years.A survey conducted in 11 regions of Brazil and the following
data [Link] the data conrm the expected view.
Life expectancy (yrs):54.2,50.4,44.2,49.7,55.4,57.0,58.2,56.6,61.9,57.5,53.4
SOLUTION
We wish to test
H0 : µ = 50
vs
HA : µ 6= 50
The test statistic

101
 √

n X − µ0
tn−1 =
s

54.2+50.4+. . . +53.4
X=
11

598.5
= = 54.41
11

X 1
2
s2 = X −X
n−1

1
32799.91 − 54.412


=
10
= 23.607

√
S2 = 23.607 = 4.859

√
11 (54.41 − 50)
t=
4.859

= 3.01

From tables value of t at α = 5% and 10 d.f is 2.228

Since t calculated =3.01>t tabulated=2.228 we reject H0 . This means that
the life expectancy is more than 50 years.
EXERCISE
1. A breacher claims that his variety of Cotton contains at most 40%
lint in seed cotton.18 samples of 100 grams each were take n and after
ginning the following quantity of lint was found in each sample.

102
 36.3 37.0 36.6 37.5 37.5 37.9 37.9 36.9 36.7
38.5 37.9 38.8 37.5 37.1 37.0 36.8 36.7 35.7
Check the breacher's [Link] 1
100
level of signicance
SOLUTION

We wish to test
H0 : µ = 40
vs
HA : µ < 50
The test statistic

√

n X − µ0
tn−1 =
s

36.3+37.0+36.6+. . . +36.7+35.7
X=
18

669.7
= = 37.206
18
(  P 2 )
1 X Xi
S2 = Xi2 −
n−1 n

103
 X 1
2
s2 = X −X
n−1

1
= (27.33 − 37.206)
17
= 0.633

√
S2 = 0.633 = 0.796

√
18 (37.206 − 40)
t=
0.796

= −14.49

From tables value of t at α = 1% and 17 d.f is 2.567

Since t calculated =-14.49<t tabulated=2.567 we do not reject H0 .
This means that the average percentage of lint in this cotton contains
less than 40%.

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