One-Sample Tests of Hypothesis

Introduction
statistical inference. We described how we could select a random sample and from this sample
estimate the value of a population parameter. For example, we selected a sample of five
employees at Spence Sprockets, found the number of years of service for each sampled
employee, computed the mean years of service, and used the sample mean to estimate the mean
years of service for all employees. In other words, we estimated a population parameter from a
sample statistic.
NOW continued the study of statistical inference by developing a confidence interval. A
confidence interval is a range of values within which we expect the population parameter to
occur. In this chapter, rather than develop a range of values within which we expect the
population parameter to occur, we develop a procedure to test the validity of a statement about a
population parameter. Some examples of statements we might want to test are:
A. The mean speed of automobiles passing milepost 150 on the M2 is 68 miles per hour.
B. The 2019 mean starting salary for a graduate of a four-year college is $47,673.
C. Thirty-five percent of retirees in the upper Midwest sell their home and move to a warm
climate within 1 year of their retirement.
D. Eighty percent of those who regularly play the state lotteries never win more than $100 in
any one play.
What Is a Hypothesis?
A hypothesis is a statement about a population. Data are then used to check the reasonableness of
the statement. To begin, we need to define the word hypothesis.
In the Pakistan legal system, a person is innocent until proven guilty. A jury hypothesizes that a
person charged with a crime is innocent and subjects this hypothesis to verification by reviewing
the evidence and hearing testimony before reaching a verdict. In a similar sense, a patient goes to
a physician and reports various symptoms. On the basis of the symptoms, the physician will
order certain diagnostic tests, then, according to the symptoms and the test results, determine the
treatment to be followed.
In statistical analysis, we make a claim—that is, state a hypothesis—collect data, and then use
the data to test the assertion. We define a statistical hypothesis as follows.
HYPOTHESIS A statement about a population parameter subject to verification. In most cases,
the population is so large that it is not feasible to study all the items, objects, or persons in the
population. For example, it would not be possible to contact every systems analyst in the United
States to find his or her monthly income. Likewise, the quality assurance department at Cooper
Tire cannot check each tire produced to determine whether it will last more than 60,000 miles.
HYPOTHESIS TESTING A procedure based on sample evidence and probability theory to
determine whether the hypothesis is a reasonable statement.
Five-Step Procedure for Testing a Hypothesis
There is a five-step procedure that systematizes hypothesis testing; when we get to step 5, we are
ready to reject or not reject the hypothesis. However, hypothesis testing as used by statisticians
does not provide proof that something is true, in the manner in which a mathematician “proves”
a statement. It does provide a kind of “proof beyond a reasonable doubt,” in the manner of the
court system. Hence, there are specific rules of evidence, or procedures, that are followed. The
steps are shown in the following diagram. We will discuss in detail each of the steps.
Step 1: State the Null Hypothesis (H0) and the Alternate Hypothesis (H1)
The first step is to state the hypothesis being tested. It is called the null hypothesis, designated
H0, and read “H sub zero.” The capital letter H stands for hypothesis, and the subscript zero
implies “no difference.” There is usually a “not” or a “no” term in the null hypothesis, meaning
that there is “no change.” For example, the null hypothesis is that the mean number of miles
driven on the steel-belted tire is not different from 60,000. The null hypothesis would be written
H0: µ= 60,000. Generally speaking, the null hypothesis is developed for the purpose of testing.
We either reject or fail to reject the null hypothesis. The null hypothesis is a statement that is not
rejected unless our sample data provide convincing evidence that it is false. We should
emphasize that, if the null hypothesis is not rejected on the basis of the sample data, we cannot
say that the null hypothesis is true. To put it another way, failing to reject the null hypothesis
does not prove that H0 is true, it means we have failed to disprove H0. To prove without any
doubt the null hypothesis is true, the population parameter would have to be known. To actually
determine it, we would have to test, survey, or count every item in the population. This is usually
not feasible. The alternative is to take a sample from the population. It should also be noted that
we often begin the null hypothesis by stating, “There is no significant difference between . . . ,”
or “The mean impact strength of the glass is not significantly different from. . . .” When we
select a sample from a population, the sample statistic is usually numerically different from the
hypothesized population parameter. As an illustration, suppose the hypothesized impact strength
of a glass plate is 70 psi, and the mean impact strength of a sample of 12 glass plates is 69.5 psi.
We must make a decision about the difference of 0.5 psi. Is it a true difference, that is, a
significant difference, or is the difference between the sample statistic (69.5) and the
hypothesized population parameter (70.0) due to chance (sampling)? To answer this question, we
conduct a test of significance, commonly referred to as a test of hypothesis. To define what is
meant by a null hypothesis:
NULL HYPOTHESIS A statement about the value of a population parameter developed for the
purpose of testing numerical evidence
The alternate hypothesis describes what you will conclude if you reject the null hypothesis. It is
written H1 and is read “H sub one.” It is also referred to as the research hypothesis. The alternate
hypothesis is accepted if the sample data provide us with enough statistical evidence that the null
hypothesis is false.
ALTERNATE HYPOTHESIS A statement that is accepted if the sample data provide
sufficient evidence that the null hypothesis is false.
After setting up the null hypothesis and alternate hypothesis, the next step is to state the level of
significance. Select a level of significance or risk.
LEVEL OF SIGNIFICANCE The probability of rejecting the null hypothesis when it is true.
The level of significance is designated α, the Greek letter alpha. It is also sometimes called the
level of risk. This may be a more appropriate term because it is the risk you take of rejecting the
null hypothesis when it is really true. There is no one level of significance that is applied to all
tests. A decision is made to use the .05 level (often stated as the 5 percent level), the .01 level,
the .10 level, or any other level between 0 and 1. Traditionally, the .05 level is selected for
consumer research projects, .01 for quality assurance, and .10 for political polling. You, the
researcher, must decide on the level of significance before formulating a decision rule and
collecting sample data. To illustrate how it is possible to reject a true hypothesis, suppose a firm
manufacturing personal computers uses a large number of printed circuit boards. Suppliers bid
on the boards, and the one with the lowest bid is awarded a sizable contract. Suppose the contract
specifies that the computer manufacturer’s quality-assurance department will sample all
incoming shipments of circuit boards. If more than 6 percent of the boards sampled are
substandard, the shipment will be rejected. The null hypothesis is that the incoming shipment of
boards contains 6 percent or less substandard boards. The alternate hypothesis is that more than 6
percent of the boards are defective.
TYPE I ERROR Rejecting the null hypothesis, H0, when it is true. The probability of
committing another type of error, called a Type II error, is designated by the Greek letter beta β.
TYPE II ERROR Accepting the null hypothesis when it is false.

Select the Test Statistic

There are many test statistics. In this chapter, we use both z and t as the test statistic.

TEST STATISTIC A value, determined from sample information, used to determine whether to
reject the null hypothesis.

Step 4: Formulate the Decision Rule

A decision rule is a statement of the specific conditions under which the null hypothesis is
rejected and the conditions under which it is not rejected. The region or area of rejection defines
the location of all those values that are so large or so small that the probability of their
occurrence under a true null hypothesis is rather remote.

Test = Statistic – parameter / standard Error

CRITICAL VALUE The dividing point between the region where the null hypothesis is
rejected and the region where it is not rejected.
Step 5: Make a Decision
The fifth and final step in hypothesis testing is computing the test statistic, comparing it to the
critical value, and making a decision to reject or not to reject the null hypothesis.
One-Tailed and Two-Tailed Tests of Significance
H0: The mean income of women stockbrokers is less than or equal to $65,000 per year.
H1: The mean income of women stockbrokers is greater than $65,000 per year.
If no direction is specified in the alternate hypothesis, we use a two-tailed test. Changing the
previous problem to illustrate, we can say:
H0: The mean income of women stockbrokers is $65,000 per year.
H1: The mean income of women stockbrokers is not equal to $65,000 per year.

Testing for a Population Mean: Known Population Standard Deviation

A Two-Tailed Test
Example
Jamestown Steel Company manufactures and assembles desks and other office equipment at
several plants in western New York state. The weekly production of the Model A325 desk at the
Fredonia Plant follows a normal probability distribution with a mean of 200 and a standard
deviation of 16. Recently, because of market expansion, new production methods have been
introduced and new employees hired. The vice president of manufacturing would like to
investigate whether there has been a change in the weekly production of the Model A325 desk.
Is the mean number of desks produced at the Fredonia Plant different from 200 at the .01
significance level?
In this example, we know two important pieces of information: (1) the population of weekly
production follows the normal distribution, and (2) the standard deviation of this normal
distribution is 16 desks per week. So it is appropriate to use the z statistic for this problem. We
use the statistical hypothesis testing procedure to investigate whether the production rate has
changed from 200 per week.
State the null hypothesis and the alternate hypothesis. The null hypothesis is “The population
mean is 200.” The alternate hypothesis is “The mean is different from 200” or “The mean is not
200.” These two hypotheses are written:

This is a two-tailed test because the alternate hypothesis does not state a direction. In other
words, it does not state whether the mean production is greater than 200 or less than 200. The
vice president wants only to find out whether the production rate is different from 200.
Step 2: Select the level of significance. As we indicated in the Problem, the significance level is
.01. This is α the probability of committing a Type I error, and it is the probability of rejecting a
true null hypothesis.
Step 3: Select the test statistic. The test statistic is z when the population standard deviation is
known. Transforming the production data to standard units (z values) permits their use not only
in this problem but also in other hypothesis-testing problems.

Step 4: Formulate the decision rule. The decision rule is formulated by finding the critical
values of z from Appendix B.1. Since this is a two-tailed test, half of .01, or .005, is placed in
each tail. The area where H0 is not rejected, located between the two tails, is therefore .99. ,
or .5000. Then, .5000 - .0050 is .4950, so .4950 is the area between 0 and the critical value.
Locate
The decision rule is, therefore: Reject the null hypothesis and accept the alternate hypothesis
(which states that the population mean is not 200) if the computed value of z is not between
- 2.58 and +2.58. Do not reject the null hypothesis if z falls between - 2.58 and
+2.58.
A One-Tailed Test

Testing for a Population Mean: Population Standard Deviation Unknown

To review, the major characteristics of the t distribution are:
• It is a continuous distribution.
• It is bell-shaped and symmetrical.
• There is a family of t distributions. Each time the degrees of freedom change, a new
distribution is created.
• As the number of degrees of freedom increases, the shape of the t distribution approaches that
of the standard normal distribution.
• The t distribution is flatter, or more spread out, than the standard normal distribution.
Tests Concerning Proportions
In the previous Topic, we discussed confidence intervals for proportions. We can also conduct a
test of hypothesis for a proportion. Recall that a proportion is the ratio of the number of
successes to the number of observations. We let X refer to the number of successes and n the
number of observations, so the proportion of successes in a fixed number of trials is X/n. Thus,
the formula for computing a sample proportion, p, is p = X/ n. Consider the following potential
hypothesis-testing situations.
• Historically, General Motors reports that 70 percent of leased vehicles are returned with less
than 36,000 miles. A recent sample of 200 vehicles returned at the end of their lease showed 158
had less than 36,000 miles. Has the proportion increased?
• The American Association of Retired Persons (AARP) reports that 60 percent of retired people
under the age of 65 would return to work on a full-time basis if a suitable job were available. A
sample of 500 retirees under 65 revealed 315 would return to work. Can we conclude that more
than 60 percent would return to work?
• Able Moving and Storage Inc. advises its clients for long-distance residential moves that their
household goods will be delivered in 3 to 5 days from the time they are picked up. Able’s
records show it is successful 90 percent of the time with this claim. A recent audit revealed it
was successful 190 times out of 200.
Can the company conclude its success rate has increased?
Some assumptions must be made and conditions met before testing a population proportion. To
test a hypothesis about a population proportion, a random sample is chosen from the population.
It is assumed that the binomial assumptions discussed are met:
(1) the sample data collected are the result of counts;
(2) the outcome of an experiment is classified into one of two mutually exclusive categories—a
“success” or a “failure”; (3) the probability of a success is the same for each trial; and (4) the
trials are independent, meaning the outcome of one trial does not affect the outcome of any other
trial. The test we will conduct shortly is appropriate when both nπ and n(1 - π) are at least 5. n is
the sample size, and π is the population proportion. It takes advantage of the fact that a binomial
distribution can be approximated by the normal distribution.
Example
Suppose prior elections in a certain state indicated it is necessary for a candidate for governor to
receive at least 80 percent of the vote in the northern section of the state to be elected. The
incumbent governor is interested in assessing his chances of returning to office and plans to
conduct a survey of 2,000 registered voters in the northern section of the state.
Using the hypothesis-testing procedure, assess the governor’s chances of reelection.
This situation regarding the governor’s reelection meets the binomial conditions.
• There are only two possible outcomes. That is, a sampled voter will either vote or not vote for
the governor.
• The probability of a success is the same for each trial. In this case, the likelihood a particular
sampled voter will support reelection is .80.
• The trials are independent. This means, for example, the likelihood the 23rd voter sampled will
support reelection is not affected by what the 24th or 52nd voter does.
• The sample data is the result of counts. We are going to count the number of voters who
support reelection in the sample of 2,000.
We can use the normal approximation to the binomial distribution

left side of
the curve is used.
 Skill Development

QNO1The National Safety Council reported that 52 percent of American turnpike drivers are
men. A sample of 300 cars traveling southbound on the New Jersey Turnpike yesterday revealed
that 170 were driven by men. At the .01 significance level, can we conclude that a larger
proportion of men were driving on the New Jersey Turnpike than the national statistics indicate?
QNO2 A recent article in USA Today reported that a job awaits only one in three new college
graduates. The major reasons given were an overabundance of college graduates and a weak
economy. A survey of 200 recent graduates from your school revealed that 80 students had jobs.
At the .02 significance level, can we conclude that a larger proportion of students at your school
have jobs?
QNO3 Chicken Delight claims that 90 percent of its orders are delivered within 10 minutes of
the time the order is placed. A sample of 100 orders revealed that 82 were delivered within the
promised time. At the .10 significance level, can we conclude that less than 90 percent of the
orders are delivered in less than 10 minutes?
QNO4 Research at the University of Toledo indicates that 50 percent of students change their
major area of study after their first year in a program. A random sample of 100 students in the
College of Business revealed that 48 had changed their major area of study after their first year
of the program. Has there been a significant decrease in the proportion of students who change
their major after the first year in this program? Test at the .05 level of significance .