Statistics for Business and Economics (14e)

Statistics for
Business and Economics (14e)

Anderson, Sweeney, Williams, Camm, Cochran, Fry, Ohlmann

© 2020 Cengage Learning

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with
a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 1
 Statistics for Business and Economics (14e)

Chapter 10 - Inference About Means and Proportions

with Two Populations
10.1 – Inferences about the Difference Between Two Population Means and known.

10.2 – Inferences about the Difference Between Two Population Means and unknown.

10.3 – Inference about the Difference Between Two Population Means: Matched Samples.

10.4 – Inferences about the Difference Between Two Population Proportions.

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 Statistics for Business and Economics (14e)

Estimating the Difference Between Two Population Means (1 of 2)

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 Statistics for Business and Economics (14e)

Sampling Distribution of

• Mean/Expected value:

• Standard Deviation (Standard Error):

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 Statistics for Business and Economics (14e)

Interval Estimation of μ1 – μ2 when σ1 and σ2 are Known (1 of 3)

Interval Estimate

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 Statistics for Business and Economics (14e)

Interval Estimation of μ1 – μ2 when σ1 and σ2 are Known (2 of 3)

Example: Par, Inc.

Par, Inc. is a manufacturer of golf equipment and has developed a new golf ball that has
been designed to provide “extra distance.”

In a test of driving distance using a mechanical driving device, a sample of Par golf balls was
compared with a sample of golf balls made by Rap, Ltd., a competitor. The sample statistics
appear on the next slide.

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 Statistics for Business and Economics (14e)

Interval Estimation of μ1 – μ2 when σ1 and σ2 are Known (3 of 3)

Example: Par, Inc. Sample # 1 Sample # 2
Par, Inc. Rap, Ltd.
Empty cell

Sample Size 120 balls 80 balls

Sample Mean 295 yards 278 yards

Based on data from previous driving distance tests, the two population
standard deviations are known with σ1 = 15 yards and σ2 = 20 yards.
Let us develop a 95% confidence interval estimate of the difference
between the mean driving distances of the two brands of golf ball.

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 Statistics for Business and Economics (14e)

Estimating the Difference Between Two Population Means (2 of 2)

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 Statistics for Business and Economics (14e)

Interval Estimation of μ1 – μ2 when σ1 and σ2 are Known

We are 95% confident that the difference between the mean driving distances of
Par, Inc. balls and Rap, Ltd. balls is 11.86 to 22.14 yards.

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 Statistics for Business and Economics (14e)

Class Exercise
• The following results come from two independent random samples taken of two
populations.

a. What is the point estimate of the difference between the two population means?
b. Provide a 90% confidence interval for the difference between the two population
means.
c. Provide a 95% confidence interval for the difference between the two population
means.
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10
 Statistics for Business and Economics (14e)

Class Exercise
• The following results come from two independent random samples taken of two
populations.

a. What is the point estimate of the difference between the two population means?

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
11
 Statistics for Business and Economics (14e)

Class Exercise
• The following results come from two independent random samples taken of two
populations.

b. Provide a 90% confidence interval for the difference between the two population
means.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Class Exercise
• The following results come from two independent random samples taken of two
populations.

c. Provide a 95% confidence interval for the difference between the two population
means.

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13
 Statistics for Business and Economics (14e)

Hypothesis Tests About μ1 – μ2 when σ1 and σ2 are Known (1 of 5)

A hypothesis test about the value of the difference in two population means must take
one of the following three forms (where D0 is the hypothesized difference in the
population means).

Test Statistic:

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 Statistics for Business and Economics (14e)

Hypothesis Tests About μ1 – μ2 when σ1 and σ2 are Known (2 of 5)

Example: Par, Inc.

Can we conclude, using α = 0.05, that the mean driving distance of Par, Inc.
golf balls is greater than the mean driving distance of Rap, Ltd. golf balls?

Sample # 1 Sample # 2
Par, Inc. Rap, Ltd.
Empty cell

Sample Size 120 balls 80 balls

Sample Mean 295 yards 278 yards

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 Statistics for Business and Economics (14e)

Hypothesis Tests About μ1 – μ2 when σ1 and σ2 are Known (3 of 5)

1. Develop the hypotheses.

2. Specify the level of significance. α = 0.05 (95% confidence)

3. Compute the value of the test statistic.

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 Statistics for Business and Economics (14e)

Hypothesis Tests About μ1 – μ2 when σ1 and σ2 are Known (4 of 5)

p –Value Approach
4. Compute the p –value.

For z = 6.49, the p-value < 0.05

5. Determine whether to reject H0.

Because p-value < 0.0001 ≤ α = 0.05, we reject H0.

At the 0.05 level of significance, the sample evidence indicates the mean driving
distance of Par, Inc. golf balls is greater than the mean driving distance of Rap, Ltd.
golf balls.

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Hypothesis Tests About μ1 – μ2 when σ1 and σ2 are Known (5 of 5)

Critical Value Approach
4. Determine the critical value and the rejection rule.

For α = 0.01, We will reject H0 if ≥ 1.645.

5. Determine whether to reject H0.

Because 6.49 ≥ 1.645, we reject H0.

The sample evidence indicates the mean driving distance of Par, Inc. golf balls is greater
than the mean driving distance of Rap, Ltd. golf balls.

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 Statistics for Business and Economics (14e)

Class Exercise
• Suppose that you are responsible for making arrangements for a business convention.
Because of budget cuts due to the recent recession, you have been charged with
choosing a city for the convention that has the least expensive hotel rooms. You have
narrowed your choices to Atlanta and Houston.
• The file named Hotel contains samples of prices for rooms in Atlanta and Houston that
are consistent with the results reported by Smith Travel Research (SmartMoney,
March 2009).
• Because considerable historical data on the prices of rooms in both cities are available,
the population standard deviations for the prices can be assumed to be $20 in Atlanta
and $25 in Houston while their sample means are 91.71 for Atlanta and 101.3 for
Houstan. The sample size for Atlanta and Houstan are 35 and 40, respectively.
• Based on the sample data, can you conclude that the mean price of a hotel room in
Atlanta is lower than one in Houston? α = 0.10 (90% confidence)

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 Statistics for Business and Economics (14e)

Class Exercise
μ1 = mean hotel price in Atlanta

 2 = mean hotel price in Houston

H0: 1  2 0

Ha: 1  2  0

p-value = .0351 p-value ≤ 0.10, Reject H0

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 Statistics for Business and Economics (14e)

Interval Estimation of μ1 – μ2 when σ1 and σ2 are Unknown (1 of 6)

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 Statistics for Business and Economics (14e)

Interval Estimation of μ1 – μ2 when σ1 and σ2 are Unknown (1 of 6)

TWO CASES
• Independent Population
• Population variance is assumed to be EQUAL
• Population variance is assumed to be UNEQUAL
• Dependent Population, Use Paired Samples

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 Statistics for Business and Economics (14e)

Interval Estimation of μ1 – μ2 when σ1 and σ2 are Unknown (2 of 6)

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 Statistics for Business and Economics (14e)

Interval Estimation of μ1 – μ2 when σ1 and σ2 are Unknown (3 of 6)

Example: Specific Motors

Specific Motors of Detroit has developed a new Automobile known as the M car.
24 M cars and 28 J cars (from Japan) were road tested to compare miles-per-gallon
(mpg) performance.
Sample #1 Sample #2
M Cars J Cars
Empty cell

Sample Size 24 cars 28 cars

Sample Mean 29.8 miles per gallon 27.3 miles per gallon
Sample Std. Dev. 2.56 miles per gallon 1.81 miles per gallon

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 Statistics for Business and Economics (14e)

Interval Estimation of μ1 – μ2 when σ1 and σ2 are Unknown (4 of 6)

Let us develop a 90% confidence interval estimate of the difference between the mpg
performances of the two models of automobile, assuming the variance is unequal.

Let
the mean miles per gallon for the population of M cars.
the mean miles per gallon for the population of J cars.

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 Statistics for Business and Economics (14e)

Interval Estimation of μ1 – μ2 when σ1 and σ2 are Unknown (5 of 6)

The degrees of freedom for tα/2 are

 (2.56) (1.81)  2 2

  
 24 28 
df  2 2
40.59 40
 1   (2.56)   1   (1.81) 
2 2

     
 24  1   24   28  1   28 

with α/2 = 0.05 and df = 40, tα/2 = 1.684

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Interval Estimation of μ1 – μ2 when σ1 and σ2 are Unknown (6 of 6)

We are 90% confident that the difference between the miles-per-gallon

performances of M cars and J cars is 1.449 to 3.551 mpg.
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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Class Exercise
• The following results are for independent random samples taken from two populations.

a. What is the point estimate of the difference between the two population means?
b. What is the degrees of freedom for the t distribution?
c. At 95% confidence, what is the margin of error?
d. What is the 95% confidence interval for the difference between the two population
means?

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
28
 Statistics for Business and Economics (14e)

Class Exercise
• The following results are for independent random samples taken from two populations.

a. What is the point estimate of the difference between the two population means?

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
29
 Statistics for Business and Economics (14e)

Class Exercise
• The following results are for independent random samples taken from two populations.

b. What is the degrees of freedom for the t distribution?

Use df 48

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Class Exercise
• The following results are for independent random samples taken from two populations.

c. At 95% confidence, what is the margin of error?

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31
 Statistics for Business and Economics (14e)

Class Exercise
• The following results are for independent random samples taken from two populations.

d. What is the 95% confidence interval for the difference between the two population
means?

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
32
 Statistics for Business and Economics (14e)

Hypothesis Tests About μ1 – μ2 when σ1 and σ2 are Unknown (1 of 6)

A hypothesis test about the value of the difference in two population
means must take one of the following three forms (where D0 is the
hypothesized difference in the population means).

Test Statistic:

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 Statistics for Business and Economics (14e)

Hypothesis Tests About μ1 – μ2 when σ1 and σ2 are Unknown (2 of 6)

Example: Specific Motors

Can we conclude, using a .05 level of significance, that the miles-per-gallon (mpg)
performance of M cars is greater than the miles-per-gallon performance of J cars?

Sample #1 Sample #2
M Cars J Cars
Empty cell

Sample Size 24 cars 28 cars

Sample Mean 29.8 miles per gallon 27.3 miles per gallon
Sample Std. Dev. 2.56 miles per gallon 1.81 miles per gallon

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
34
 Statistics for Business and Economics (14e)

Hypothesis Tests About μ1 – μ2 when σ1 and σ2 are Unknown (3 of 6)

1. Develop the hypotheses.

2. Specify the level of significance. α = 0.05

3. Compute the value of the test statistic

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
35
 Statistics for Business and Economics (14e)

Hypothesis Tests About μ1 – μ2 when σ1 and σ2 are Unknown (4 of 6)

The degrees of freedom for are

Df= 50

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
36
 Statistics for Business and Economics (14e)

Hypothesis Tests About μ1 – μ2 when σ1 and σ2 are Unknown (5 of 6)

p –Value Approach
4. Compute the p-value.

For t = 4.003 and df = 50 the p-value < 0.005

5. Determine whether to reject H0.

Because p-value ≤ α = 0.05, we reject H0.

At the 0.05 level of significance, the sample evidence indicates that the miles-per-
gallon (mpg) performance of M cars is greater than the miles-per-gallon
performance of J cars. That is, M cars have a worse mpg rating than J cars.

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
37
 Statistics for Business and Economics (14e)

Hypothesis Tests About μ1 – μ2 when σ1 and σ2 are Unknown (6 of 6)

Critical Value Approach
4. Determine the critical value and the rejection rule.

For α = 0.05 and df = 50, We will reject H0 if ≥ 1.683.

5. Determine whether to reject H0.

Because 4.003 ≥ 1.676, we reject H0.

We are at least 95% confident that the miles-per-gallon (mpg) performance of M cars
is greater than the miles-per-gallon performance of J cars.

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
38
 Statistics for Business and Economics (14e)

Class Exercise
• Salaries of Recent College Graduates. The Tippie College of Business obtained the
following results on the salaries of a recent graduating class:

Finance Majors Business Analytics Majors

n1 = 70 n2= 30
x̄ 1= $48,573 x̄ 2= $55,317
s1= $18,000 S2= $10,000

a. Formulate hypothesis so that, if the null hypothesis is rejected, we can conclude that
salaries for Finance majors are significantly lower than the salaries of Business Analytics
majors. Use a = .05.
b. What is the value of the test statistic?
c. What is the p-value?
d. What is your conclusion?

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
39
 Statistics for Business and Economics (14e)

Class Exercise
• Salaries of Recent College Graduates. The Tippie College of Business obtained the
following results on the salaries of a recent graduating class:
Finance Majors Business Analytics Majors
n1 = 70 n2= 30
x̄ 1= $48,573 x̄ 2= $55,317
s1= $18,000 S2= $10,000
a. Formulate hypothesis so that, if the null hypothesis is rejected, we can conclude that
salaries for Finance majors are significantly lower than the salaries of Business Analytics
majors. Use a = .05.

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
40
 Statistics for Business and Economics (14e)

Class Exercise
• Salaries of Recent College Graduates. The Tippie College of Business obtained the
following results on the salaries of a recent graduating class:

Finance Majors Business Analytics Majors

n1 = 70 n2= 30
x̄ 1= $48,573 x̄ 2= $55,317
s1= $18,000 S2= $10,000

b. What is the value of the test statistic?

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
41
 Statistics for Business and Economics (14e)

Class Exercise
• Salaries of Recent College Graduates. The Tippie College of Business obtained the
following results on the salaries of a recent graduating class:
Finance Majors Business Analytics Majors
n1 = 70 n2= 30
x̄ 1= $48,573 x̄ 2= $55,317
s1= $18,000 S2= $10,000
c. What is the p-value?

df=98
From the t table we see that t = –2.39 with df=100 correspond to a p-value between p≈0.01 to 0.005
And Critical value for one tailed test at df 98 and significance 0.05 is -1.661

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
42
 Statistics for Business and Economics (14e)

Class Exercise
• Salaries of Recent College Graduates. The Tippie College of Business obtained the
following results on the salaries of a recent graduating class:
Finance Majors Business Analytics Majors
n1 = 70 n2= 30
x̄ 1= $48,573 x̄ 2= $55,317
s1= $18,000 S2= $10,000
d. What is your conclusion?

 0.05, reject H0. We conclude that the salaries of finance majors are lower than
p-value
the salaries of business analytics majors.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
43
 Statistics for Business and Economics (14e)

Inferences About the Difference Between Two Population Means: Matched Samples
(1 of 6)

• With a matched-sample design each sampled item provides a pair of data values.
• This design often leads to a smaller sampling error than the independent-sample design
because variation between sampled items is eliminated as a source of sampling error.
• Examples:
• In a clinical trial for a new drug.

• Production method/technology by Workers.

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
44
 Statistics for Business and Economics (14e)

Inferences About the Difference Between Two Population Means: Matched Samples
(2 of 6)

Example: Express Deliveries

A Chicago-based firm has documents that must be quickly distributed to district offices
throughout the U.S. The firm must decide between two delivery services, UPX (United
Parcel Express) and INTEX (International Express), to transport its documents.

In testing the delivery times of the two services, the firm sent two reports to a random
sample of its district offices with one report carried by UPX and the other report carried
by INTEX. Do the data on the next slide indicate a no difference in mean delivery times
for the two services? Use a 0.05 level of significance.

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
45
 Statistics for Business and Economics (14e)

Inferences About the Difference Between Two Population Means: Matched Samples
(3 of 6)

Here are the data:

District Office UPX INTEX Difference

The mean of the differences is Seattle

Los Angeles
32
30
25
24
7
6
Boston 19 15 4
Cleveland 16 15 1
New York 15 13 2
Houston 18 15 3
Atlanta 14 15 Negative 1
St. Louis 10 8 2

The standard deviation of the Milwaukee

Denver
7
16
9
11
Negative 2
5

differences is

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product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
 Statistics for Business and Economics (14e)

Inferences About the Difference Between Two Population Means: Matched Samples
(4 of 6)

1. Develop the hypotheses.

2. Specify the level of significance. α = 0.05

3. Compute the value of the test statistic.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
47
 Statistics for Business and Economics (14e)

Inferences About the Difference Between Two Population Means: Matched Samples
(5 of 6)

p –Value Approach
4. Compute the p-value.

For t = 2.94 and df = 9 the p-value is between 0.005 and 0.01.

5. Determine whether to reject H0.

Because p-value ≤ α = 0.05, we reject H0.

At the 0.05 level of significance, the sample evidence indicates that there is a
difference in mean delivery times for the two services.

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 Statistics for Business and Economics (14e)

Inferences About the Difference Between Two Population Means: Matched Samples
(6 of 6)
Critical Value Approach
4. Determine the critical value and the rejection rule.

For α = 0.05 and df = 9, We will reject H0 if ≥ 2.262.

5. Determine whether to reject H0.

Because 2.94 ≥ 2.262, we reject H0.

We are at least 95% confident that there is a difference in mean delivery times for
the two services.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Class Exercise
• Consider the following hypothesis test.

• The following data are from matched samples taken from two populations.

a. Compute the difference value for each element.

b. Compute d.
c. Compute the standard deviation sd.
d. Conduct a hypothesis test using a = .05. What is your conclusion?

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Class Exercise
• Consider the following hypothesis test.

a. Compute the difference value for each element.

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Class Exercise
• Consider the following hypothesis test.

b. Compute d.

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Class Exercise
• Consider the following hypothesis test.

c. Compute the standard deviation sd.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
53
 Statistics for Business and Economics (14e)

Class Exercise
• Consider the following hypothesis test.

d. Conduct a hypothesis test using a = .05. What is your conclusion?

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Sampling Distribution of (1 of 3)

• Mean/Expected value:

• Standard Deviation (Standard Error):

where: proportion for population 1

proportion for population 2
sample size from population 1
sample size from population 2

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Sampling Distribution of (2 of 3)

• If the sample sizes are large, the sampling distribution of

can be approximated by a normal probability distribution.
• The sample sizes are sufficiently large if all of these conditions are met:

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Sampling Distribution of (3 of 3)

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Interval Estimation of p1 – p2 (1 of 3)

Interval Estimate

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 Statistics for Business and Economics (14e)

Interval Estimation of p1 – p2 (2 of 3)
Example: Market Research Associates

Market Research Associates is conducting research to evaluate the effectiveness of a client’s

new advertising campaign. Before the new campaign began, a telephone survey of 150
households in the test market area showed 60 households “aware” of the client’s product.

The new campaign has been initiated with TV and newspaper advertisements running for
three weeks.

A survey conducted immediately after the new campaign showed 120 of 250 households
“aware” of the client’s product. Does the data support the position that the advertising
campaign has provided an increased awareness of the client’s product?

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Interval Estimation of p1 – p2 (3 of 3)

Hence, the 95% confidence interval for the difference in before and after
awareness of the product is –0.02 to 0.18.

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Hypothesis Tests about p1 – p2 (1 of 8)

Hypotheses:
1. One-tailed, lower tail:

2. One-tailed, upper tail:

3. Two-tailed:

Note: We will focus on tests involving no difference between the two

population proportions.

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 Statistics for Business and Economics (14e)

Hypothesis Tests about p1 – p2 (2 of 8)

• Standard error of when :

• Pooled estimator of when :

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 Statistics for Business and Economics (14e)

Hypothesis Tests about p1 – p2 (3 of 8)

Test Statistic

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 Statistics for Business and Economics (14e)

Hypothesis Tests about p1 – p2 (4 of 8)

Example: Market Research Associates

Can we conclude, using a 0.05 level of significance, that the proportion of

households aware of the client’s product increased after the new
advertising campaign?

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Hypothesis Tests about p1 – p2 (5 of 8)

2. Specify the level of significance. α = 0.05

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with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Hypothesis Tests about p1 – p2 (6 of 8)

3. Compute the value of the test statistic.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Hypothesis Tests about p1 – p2 (7 of 8)

p –Value Approach
4. Compute the p –value.
For z = 1.56, the p-value = .0594

5. Determine whether to reject H0.

Because p-value > α = 0.05, we cannot reject H0.
We cannot conclude that the proportion of households aware of the client’s product
increased after the new campaign.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

Hypothesis Tests about p1 – p2 (8 of 8)

Critical Value Approach
4. Determine the critical value and rejection rule.
For α= .05, z.05 = 1.645
Reject H0 if z > 1.645

5. Determine whether to reject H0.

Because 1.56 < 1.645, we cannot reject H0.
We cannot conclude that the proportion of households aware of the client’s
product increased after the new campaign.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e)

End of Chapter 10

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed
with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.
69