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    Steps For Hypothesis Testing

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    Tenzin Tc Wangchuk
    1) The document outlines the steps for hypothesis testing which include choosing the null and alternative hypotheses, determining the level of significance, selecting the appropriate test statistic and establishing the decision rule, collecting and analyzing the data, and making a conclusion. 2) It provides an example of using a z-test to test the hypothesis that the percentage of homes with excellent ratings is equal to 10% versus it being different. 3) The z-statistic is calculated to be 3.2436 which is greater than the critical value, so the null hypothesis that the percentage is 10% is rejected, indicating the data provides evidence the percentage is significantly different than 10%.

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    Steps For Hypothesis Testing

    Uploaded by

    Tenzin Tc Wangchuk
    46 views2 pages
    1) The document outlines the steps for hypothesis testing which include choosing the null and alternative hypotheses, determining the level of significance, selecting the appropriate test statistic and establishing the decision rule, collecting and analyzing the data, and making a conclusion. 2) It provides an example of using a z-test to test the hypothesis that the percentage of homes with excellent ratings is equal to 10% versus it being different. 3) The z-statistic is calculated to be 3.2436 which is greater than the critical value, so the null hypothesis that the percentage is 10% is rejected, indicating the data provides evidence the percentage is significantly different than 10%.

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    Steps for Hypothesis Testing

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    1) The document outlines the steps for hypothesis testing which include choosing the null and alternative hypotheses, determining the level of significance, selecting the appropriate test statistic and establishing the decision rule, collecting and analyzing the data, and making a conclusion. 2) It provides an example of using a z-test to test the hypothesis that the percentage of homes with excellent ratings is equal to 10% versus it being different. 3) The z-statistic is calculated to be 3.2436 which is greater than the critical value, so the null hypothesis that the percentage is 10% is rejected, indicating the data provides evidence the percentage is significantly different than 10%.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    46 views2 pages

    Steps For Hypothesis Testing

    Uploaded by

    Tenzin Tc Wangchuk
    1) The document outlines the steps for hypothesis testing which include choosing the null and alternative hypotheses, determining the level of significance, selecting the appropriate test statistic and establishing the decision rule, collecting and analyzing the data, and making a conclusion. 2) It provides an example of using a z-test to test the hypothesis that the percentage of homes with excellent ratings is equal to 10% versus it being different. 3) The z-statistic is calculated to be 3.2436 which is greater than the critical value, so the null hypothesis that the percentage is 10% is rejected, indicating the data provides evidence the percentage is significantly different than 10%.

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    STEPS FOR HYPOTHESIS TESTING 1) Choose H0 and H1. These are the Null Hypothesis a.

    EX: H0:U= 25 H1:U= 25 2) Decide the level of significance EX: a= .05 n=100 3) Choose appropriate test statistics and set up the decision rule of test. EX: Z-Test- Use Z test when the true population standard deviation is known and the sample size is large. T-Test- Since the population standard deviation is unknown and the population is normally distributed, a t-test for testing hypothesis about the population mean is the correct choice. 4) Collect data and compute test statistics. Put down the z-stat ans. Eg: |z-stat|=2>1.900 (Reject H0 if z is bigger than critical) 5) State weather to reject H0 or not Reject H0 if the level of significance is higher than the p-value EX: .0400 < a= .05 6) Conclusion a. EX: Data do provide evidence to show the mean life is significantly different from 375 hours. So reject. Maybe 7) Questionable stuff -If the Significance level is smaller, the upper critical value would be bigger. Higher Significance level = Higher rejection rate. (aka higher power) -The answer does not change when the standard deviation changes. How and why does the p- value change? Because as s decreases, the standard error decreases and hence the absolute value of the z test statistic would be larger. Since the p-value is determined by the value of test statistic, it will be smaller. -Errors Type I error- the null hypothesis is rejected when in fact it is true Type II error- the null hypothesis is not rejected when in fact it is false P-value is measure of how much evidence we have against the null hypothesis Power Bigger the power, more power it has Bigger sample size, the standard error is smaller, proportion is the same, z test is going to be bigger Higher z = lower P value Small p value means strong data e. If the test from part a. is repeated using a level of significance of .01, would the new test have more power than the original test? Explain. e) No, it would have less power! The bigger the level of significance, the more power the test has, since the rejection region gets bigger and the power is the P(reject H0 when H0 is false). So a test at l.o.s. .01 has less than a test at l.o.s. .05. Standard error =SQRT(null*(1-null)/sample size) p= 0.3012 >.05 therefore do not reject Ho

    1. Does the data provide evidence to show that the true mean rating is significantly different than 80? T-test 2. Do the data provide evidence to show that the percentage of homes with excellent ratings is significantly different from 10%? Z-test
    Z Test of Hypothesis for the Proportion Data p= a) 1) Null Hypothesis Level of Significance Number of Successes Sample Size Intermediate Calculations Sample Proportion Standard Error Z Test Statistic 0.46 0.01 166 300 2) 3) 4) 5) 6) Ho: p= H1: p not = n= Reject Ho if |z-stat|> 0.46 0.46 300 0.01 2.5758 2.576

    0.5533 0.0288 3.2436 p=

    |z-stat| = 3.2436 < Therefore Reject Ho Data do provide evidence to show that the proportion of full time employed students is significantly different from the National Norm 0.0012 p-value =.0012

    Two-Tailed Test Lower Critical Value Upper Critical value p-Value Reject the null hypothesis -2.576 2.576 0.0012

    Therefore do reject Ho The p-value is extremely small for a p-value. Reject Ho at any level of significance.

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