Introduction to

Hypothesis Testing

Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-1

 Hypotheses Tests
Thus a hypothesis may be defined as a proposition or a set of
proposition set forth as an explanation for the occurrence of some
specified group of phenomena either asserted merely as a provisional
conjecture to guide some investigation or accepted as highly probable in
the light of established facts.

Quite often a research hypothesis is a predictive statement, capable of being tested

by scientific methods, that relates an independent variable to some dependent
variable.
For example, consider statements like the following ones:
“Students who receive counselling will show a greater increase in creativity than
students not receiving counselling”
Or
“the automobile A is performing as well as automobile B.”
These are hypotheses capable of being objectively verified and tested. Thus, we may
conclude that a hypothesis states what we are looking for and it is a proposition
which can be put to a test to determine its validity.
Characteristics of Hypotheses
 Basic Concepts in Hypotheses
 (a) Null hypothesis In the context of statistical analysis, we often talk about
null hypothesis and alternative hypothesis. If we are to compare method A
with method B about its superiority and if we proceed on the assumption that
both methods are equally good, then this assumption is termed as the null
hypothesis.
 As against this, we may think that the method A is superior or the method B
is inferior, we are then stating what is termed as alternative hypothesis. The
 Null hypothesis is generally symbolized as H0 and the alternative hypothesis
as Ha.
 Suppose we want to test the hypothesis that the population mean µ is equal
to the hypothesised mean µH0 =100.
 Then we would say that the null hypothesis is that the population mean is
equal to the hypothesized mean 100 and symbolically we can express as:
 H0 : µ=µH0=100

Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-4

 Stating a Hypothesis
“H subzero” or “H naught”
A null hypothesis H0 is a statistical hypothesis that contains
a statement of equality such as , =, or .
“H sub-a”

A alternative hypothesis Ha is the complement of the null

hypothesis. It is a statement that must be true if H0 is false and
contains a statement of inequality such as >, , or <.

To write the null and alternative hypotheses, translate the

claim made about the population parameter from a verbal
statement to a mathematical statement.
 Stating a Hypothesis
Example:
Write the claim as a mathematical sentence. State the null
and alternative hypotheses and identify which represents the
claim.
A manufacturer claims that its rechargeable batteries have
an average life of at least 1,000 charges.
  1000
Condition of
H0:   1000 (Claim)
equality
Ha:  < 1000
Complement of the
null hypothesis
 Stating a Hypothesis
Example:
Write the claim as a mathematical sentence. State the null
and alternative hypotheses and identify which represents the
claim.
Statesville college claims that 94% of their graduates find
employment within six months of graduation.
p = 0.94
Condition of
H0: p = 0.94 (Claim)
equality
Ha: p  0.94
Complement of the
null hypothesis
 Types of Errors
No matter which hypothesis represents the claim, always
begin the hypothesis test assuming that the null
hypothesis is true.

At the end of the test, one of two decisions will be made:

1. reject the null hypothesis, or
2. fail to reject the null hypothesis.
A type I error occurs if the null hypothesis is rejected when it
is true.
A type II error occurs if the null hypothesis is not rejected
when it is false.
Types of Errors
 Type I and Type II Errors
 Type I Error
 Rejecting a true null hypothesis
 The probability of committing a Type I error is called
, the level of significance.

 Type II Error
 Failing to reject a false null hypothesis
 The probability of committing a Type II error is called
.

Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons. 9-11
 Types of Errors
Example:
Statesville college claims that 94% of their graduates find
employment within six months of graduation. What will a type
I or type II error be?
H0: p = 0.94 (Claim)
Ha: p  0.94
A type I error is rejecting the null when it is true.
The population proportion is actually 0.94, but is rejected. (We
believe it is not 0.94.)
A type II error is failing to reject the null when it is false.
The population proportion is not 0.94, but is not rejected. (We
believe it is 0.94.)
 Level of Significance
In a hypothesis test, the level of significance is your
maximum allowable probability of making a type I error. It is
denoted by , the lowercase Greek letter alpha.
Hypothesis tests are
based on .
The probability of making a type II error is denoted by , the
lowercase Greek letter beta.
By setting the level of significance at a small value, you
are saying that you want the probability of rejecting a true
null hypothesis to be small.
Commonly used levels of significance:
 = 0.10  = 0.05  = 0.01
 Statistical Tests
After stating the null and alternative hypotheses and
specifying the level of significance, a random sample is taken
from the population and sample statistics are calculated.

The statistic that is compared with the parameter in the

null hypothesis is called the test statistic.

Population Test Standardized test

parameter statistic statistic
μ x z (n  30)
t (n < 30)
p p̂ z
2 s2 X2
 P-values
If the null hypothesis is true, a P-value (or probability value)
of a hypothesis test is the probability of obtaining a sample
statistic with a value as extreme or more extreme than the
one determined from the sample data.

The P-value of a hypothesis test depends on the nature of the

test.

There are three types of hypothesis tests – a left-, right-, or

two-tailed test. The type of test depends on the region of the
sampling distribution that favors a rejection of H0. This
region is indicated by the alternative hypothesis.
 Left-tailed Test
1. If the alternative hypothesis contains the less-than
inequality symbol (<), the hypothesis test is a left-
tailed test.
H0: μ  k
H a: μ < k

z
-3 -2 -1 0 1 2 3
Test
statistic
 Right-tailed Test
2. If the alternative hypothesis contains the greater-
than symbol (>), the hypothesis test is a right-
tailed test.
H0: μ  k
H a: μ > k

z
-3 -2 -1 0 1 2 3
Test
statistic
 Two-tailed Test
3. If the alternative hypothesis contains the not-
equal-to symbol (), the hypothesis test is a two-
1
tailed test. In a two-tailed test, each
2 tail has an
H0: μ = k area of P.
H a: μ  k

z
-3 -2 -1 0 1 2 3
Test Test
statistic statistic
 Rejection and Non Rejection
Regions
Rejection Region Rejection Region

Non Rejection Region

=40 oz

Critical Value Critical Value

Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons. 9-20
 The cola-company in which an automatic bottling machine fills 1-
liter
bottles with cola. Now consider three different situations:

Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-21

Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-22
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-23
 Identifying Types of Tests
Example:
For each claim, state H0 and Ha. Then determine whether the
hypothesis test is a left-tailed, right-tailed, or two-tailed test.
a.) A cigarette manufacturer claims that less than one-
eighth of the US adult population smokes
H0: p  0.125 cigarettes.
Ha: p < 0.125 (Claim) Left-tailed test
b.) A local telephone company claims that the
average length of a phone call is 8 minutes.
H0: μ = 8 (Claim)
Ha: μ  8 Two-tailed test
 Steps for Hypothesis Testing
1. State the claim mathematically and verbally. Identify
the null and alternative hypotheses.
H0: ? Ha: ?
2. Specify the level of significance.
=?
3. Determine the
standardized sampling z
0
distribution and draw its
graph.
4. Calculate the test statistic z
and its standardized value. 0
Add it to your sketch. Test statistic

Continued.
 Steps for Hypothesis Testing
5. Find the P-value.
6. Use the following decision rule.
Is the P-value less than or
equal to the level of No Fail to reject H0.
significance?

Yes

Reject H0.

7. Write a statement to interpret the decision in the

context of the original claim.

These steps apply to left-tailed, right-tailed, and two-

tailed tests.
 Steps in Testing Hypotheses

1. Establish hypotheses: state the null and

alternative hypotheses.
2. Determine the appropriate statistical test and
sampling distribution.
3. Specify the Type I error rate (
4. State the decision rule.
5. Gather sample data.
6. Calculate the value of the test statistic.
7. State the statistical conclusion.
8. Make a managerial decision.

Business Statistics, 4e, by Ken Black. © 2003 John Wiley & Sons. 9-27
 A Classification of Hypothesis Testing
Procedures for Examining Differences
Fig. 15.9 Hypothesis Tests

Parametric Tests Non-parametric Tests

(Metric Tests) (Nonmetric Tests)

One Sample Two or More One Sample Two or More

Samples Samples
* t test * Chi-Square *
* Z test K-S
* Runs
* Binomial

Independent Paired
Samples Samples Independent Paired
Samples Samples
* Two-Group t * Paired
test * Chi-Square * Sign
t test * Mann-Whitney * Wilcoxon
* Z test
* Median * McNemar
* K-S * Chi-Square
 Z-test

Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-29

 t-test

Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-30

 χ2-test

Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-31

 F-test

Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-32

Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-33
 Cases in Which the Test Statistic is t

Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-34

Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-35
8.2: Large-Sample Test of a Hypothesis
about a Population Mean

Rejection Regions for Common Values of α

Lower Tailed Upper Tailed Two tailed
α = .10 z < - 1.28 z > 1.28 | z | > 1.645
α = .05 z < - 1.645 z > 1.645 | z | > 1.96
α = .01 z < - 2.33 z > 2.33 | z | > 2.575

36
McClave, Statistics, 11th ed. Chapter 8: Inferences
Based on a Single Sample: Tests of Hypotheses
§ 7.2
Hypothesis Testing
for the Mean
(Large Samples)
 Using P-values for a z-Test
The z-test for the mean is a statistical test for a population
mean. The z-test can be used when the population is normal
and  is known, or for any population when the sample size n
is at least 30.

The test statistic is the sample mean x and the standardized

test statistic is z.

x μ σ
z standard error σx
σ n n
When n  30, the sample standard deviation s can be
substituted for .
 Using P-values for a z-Test
Using P-values for a z-Test for a Mean μ
In Words In Symbols
1. State the claim mathematically State H0 and Ha.
and verbally. Identify the null
and alternative hypotheses.
2. Specify the level of Identify .
significance. x μ
z
3. Determine the standardized σ n
test statistic.
Use Table 4 in
4. Find the area that corresponds Appendix B.
to z.
Continued.
 Using P-values for a z-Test
Using P-values for a z-Test for a Mean μ
In Words In Symbols
5. Find the P-value.
a. For a left-tailed test, P = (Area in left tail).
b. For a right-tailed test, P = (Area in right tail).
c. For a two-tailed test, P = 2(Area in tail of test statistic).

6. Make a decision to reject or fail

to reject the null hypothesis.
7. Interpret the decision in the
context of the original claim.
 Hypothesis Testing with P-
values
Example:
A manufacturer claims that its rechargeable batteries are
good for an average of more than 1,000 charges. A
random sample of 100 batteries has a mean life of 1002
charges and a standard deviation of 14. Is there enough
evidence to support this claim at  = 0.01?
H0:   1000 Ha:  > 1000 (Claim)
The level of significance is  = 0.01.
The standardized test statistic is
x  μ 1002  1000
z 
σ n 14 100
1.43
Continued.
 Hypothesis Testing with P-
values
Example continued:
A manufacturer claims that its rechargeable batteries are
good for an average of more than 1,000 charges. A
random sample of 100 batteries has a mean life of 1002
charges and a standard deviation of 14. Is there enough
evidence to support this claim at  = 0.01?
H0:   1000 Ha:  > 1000 (Claim)
z 1.43
The area to the right of P-value
z = 1.43 is P = 0.0764.  = 0.01, fail to reject H0.
0 1.43 z

At the 1% level of significance, there is not enough evidence to

support the claim that the rechargeable battery has an average life
of at least 1000 charges.
 Testing with Rejection Regions
Example:
A local telephone company claims that the average
length of a phone call is 8 minutes. In a random sample
of 58 phone calls, the sample mean was 7.8 minutes and
the standard deviation was 0.5 minutes. Is there enough
evidence to support this claim at  = 0.05?
H0:  = 8 (Claim) Ha:   8
The level of significance is  = 0.05.

0.025 0.025
z
z0 = 1.96 0 z0 = 1.96

Continued.
 Testing with Rejection Regions
Example continued:
A local telephone company claims that the average length
of a phone call is 8 minutes. In a random sample of 58
phone calls, the sample mean was 7.8 minutes and the
standard deviation was 0.5 minutes. Is there enough
evidence to support this claim at  = 0.05?
H0:  = 8 (Claim) Ha:   8
The standardized test statistic is The test statistic falls in
x μ 7.8  8 the rejection region, so
z 
σ n 0.5 58 H0 is rejected.
 3.05. z
z0 = 1.96 0 z0 = 1.96

At the 5% level of significance, there is enough evidence to reject

the claim that the average length of a phone call is 8 minutes.
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-45
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-46
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-47
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-48
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-49
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-50
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-51
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-52
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-53
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-54
 8.2: Large-Sample Test of a Hypothesis
about a Population Mean

 The Economics of Education Review (Vol. 21,

2002) reported a mean salary for males with
postgraduate degrees of $61,340, with an
estimated standard error (s ) equal to $2,185.
We wish to test, at the α = .05 level, H0: µ =
$60,000.

55
McClave, Statistics, 11th ed. Chapter 8: Inferences
Based on a Single Sample: Tests of Hypotheses
 8.2: Large-Sample Test of a Hypothesis
about a Population Mean

The Economics of
 H0 : µ = 60,000
Education Review (Vol. Ha : µ ≠ 60,000
21, 2002) reported a Test Statistic:
mean salary for males x  0
with postgraduate z
x
degrees of $61,340, with
an estimated standard 61,340  60,000
z
error (s) equal to 2,185
$2,185. We wish to test, z .613
at the α = .05 level,
H0: µ = $60,000. Rejection Region: | z | > z.025 = 1.96
Do not reject H0
56
McClave, Statistics, 11th ed. Chapter 8: Inferences
Based on a Single Sample: Tests of Hypotheses
8.2: Large-Sample Test of a Hypothesis
about a Population Mean

Rejection Regions for Common Values of α

Lower Tailed Upper Tailed Two tailed
α = .10 z < - 1.28 z > 1.28 | z | > 1.645
α = .05 z < - 1.645 z > 1.645 | z | > 1.96
α = .01 z < - 2.33 z > 2.33 | z | > 2.575

57
McClave, Statistics, 11th ed. Chapter 8: Inferences
Based on a Single Sample: Tests of Hypotheses
§ 7.3
Hypothesis Testing
for the Mean
(Small Samples)
 Critical Values in a t-Distribution

Finding Critical Values in a t-Distribution

1. Identify the level of significance .
2. Identify the degrees of freedom d.f. = n – 1.
3. Find the critical value(s) using Table 5 in Appendix
B in the row with n – 1 degrees of freedom. If the
hypothesis test is
a. left-tailed, use “One Tail,  ” column with a
negative sign,
b. right-tailed, use “One Tail,  ” column with a
positive sign,
c. two-tailed, use “Two Tails,  ” column with a
negative and a positive sign.
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-60
 Finding Critical Values for t
Example:
Find the critical value t0 for a right-tailed test given  =
0.01 and n = 24.
The degrees of freedom are d.f. = n – 1 = 24 – 1 = 23.

To find the critical value, use Table 5 with d.f. = 23 and

0.01 in the “One Tail,  “ column. Because the test is a
right-tail test, the critical value is positive.

t0 = 2.500
 Finding Critical Values for t
Example:
Find the critical values t0 and t0 for a two-tailed test
given  = 0.10 and n = 12.

The degrees of freedom are d.f. = n – 1 = 12 – 1 = 11.

To find the critical value, use Table 5 with d.f. = 11

and 0.10 in the “Two Tail,  “ column. Because the
test is a two-tail test, one critical value is negative and
one is positive.
t0 =  1.796 and t0 = 1.796
t-Test for a Mean μ (n < 30,  Unknown)
The t-test for the mean is a statistical test for a population
mean. The t-test can be used when the population is normal
or nearly normal,  is unknown, and n < 30.

The test statistic is the sample mean x and the standardized

test statistic is t.

x μ
t
s n

The degrees of freedom are d.f. = n – 1 .

t-Test for a Mean μ (n < 30,  Unknown)
Using the t-Test for a Mean μ (Small Sample)
In Words In Symbols
1. State the claim mathematically State H0 and Ha.
and verbally. Identify the null
and alternative hypotheses.
2. Specify the level of Identify .
significance.
d.f. = n – 1.
3. Identify the degrees of freedom
and sketch the sampling
distribution.
Use Table 5 in
4. Determine any critical values. Appendix B.
5. Determine any rejection
Continued.
region(s).
t-Test for a Mean μ (n < 30,  Unknown)
Using the t-Test for a Mean μ (Small Sample)
In Words In Symbols
6. Find the standardized test x μ
t
statistic. s
n

7. Make a decision to reject or fail If t is in the rejection

to reject the null hypothesis. region, reject H0.
Otherwise, fail to reject
H0.
8. Interpret the decision in the
context of the original claim.
 Testing μ Using Critical Values
Example:
A local telephone company claims that the average
length of a phone call is 8 minutes. In a random sample
of 18 phone calls, the sample mean was 7.8 minutes and
the standard deviation was 0.5 minutes. Is there enough
evidence to support this claim at  = 0.05?
H0:  = 8 (Claim) Ha:   8
The level of significance is  = 0.05.
The test is a two-tailed test.
Degrees of freedom are d.f. = 18 – 1 = 17.

The critical values are t0 = 2.110 and t0 = 2.110

Continued.
 Testing μ Using Critical Values
Example continued:
A local telephone company claims that the average length
of a phone call is 8 minutes. In a random sample of 18
phone calls, the sample mean was 7.8 minutes and the
standard deviation was 0.5 minutes. Is there enough
evidence to support this claim at  = 0.05?
H0:  = 8 (Claim) Ha:   8
The standardized test statistic is The test statistic falls in
x μ 7.8  8 the nonrejection region, so
t 
s n 0.5 18 H0 is not rejected.
 1.70. z
z0 = 2.110 0 z0 = 2.110

At the 5% level of significance, there is not enough evidence to reject the

claim that the average length of a phone call is 8 minutes.
 Testing μ Using P-values
Example:
A manufacturer claims that its rechargeable batteries have
an average life greater than 1,000 charges. A random
sample of 10 batteries has a mean life of 1002 charges
and a standard deviation of 14. Is there enough evidence
to support this claim at  = 0.01?
H0:   1000 Ha:  > 1000 (Claim)
The level of significance is  = 0.01.
The degrees of freedom are d.f. = n – 1 = 10 – 1 = 9.
The standardized test statistic is
x  μ 1002  1000
t 
s n 14 10
0.45 Continued.
 Testing μ Using P-values
Example continued:
A manufacturer claims that its rechargeable batteries have
an average life greater than 1,000 charges. A random
sample of 10 batteries has a mean life of 1002 charges
and a standard deviation of 14. Is there enough evidence
to support this claim at  = 0.01?
H0:   1000 Ha:  > 1000 (Claim)
t 0.45 Using the d.f. = 9 row from Table 5, you can
determine that P is greater than  = 0.25 and is
therefore also greater than the 0.01 significance
0 0.45 z level. H0 would fail to be rejected.
At the 1% level of significance, there is not enough evidence to
support the claim that the rechargeable battery has an average life
of at least 1000 charges.
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-70
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-71
 8.4: Small-Sample Test of a Hypothesis
about a Population Mean

Suppose copiers average 100,000 between

paper jams. A salesman claims his are
better, and offers to leave 5 units for testing.
The average number of copies between jams
is 100,987, with a standard deviation of 157.
Does his claim seem believable?

72
McClave, Statistics, 11th ed. Chapter 8: Inferences
Based on a Single Sample: Tests of Hypotheses
 8.4: Small-Sample Test of a Hypothesis
about a Population Mean

Suppose copiers average H0 : µ = 100,000

100,000 between paper Ha : µ > 100,000
jams. A salesman claims Test Statistic:
his are better, and offers x  0
to leave 5 units for t
s/ n
testing. The average
number of copies 100,987  100,000
t
between jams is 100,987, 157 / 5
with a standard deviation t 14.06
of 157. Does his claim
seem believable? p-value: P(tdf=4 > 14.06) < .0005

73
McClave, Statistics, 11th ed. Chapter 8: Inferences
Based on a Single Sample: Tests of Hypotheses
 8.4: Small-Sample Test of a Hypothesis
about a Population Mean

Suppose copiers average HReject

0 : µ = 100,000
the null hypothesis
100,000 between paper Hbased on the very low
a : µ > 100,000
probability of seeing the
jams. A salesman claims Test Statistic:
observed results if the null
his are better, and offers x  0
were true.
to leave 5 units for  claim does seem
So,t the
s/ n
testing. The average plausible.
number of copies 100,987  100,000
t
between jams is 100,987, 157 / 5
with a standard deviation t 14.06
of 157. Does his claim
seem believable? p-value: P(|tdf=4| > 14.06) < .0005

74
McClave, Statistics, 11th ed. Chapter 8: Inferences
Based on a Single Sample: Tests of Hypotheses
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-75
Chapter 8

Hypothesis Testing with

Two Samples
§ 8.1
Testing the Difference
Between Means
(Large Independent
Samples)
8.2: Large-Sample Test of a Hypothesis
about a Population Mean

Rejection Regions for Common Values of α

Lower Tailed Upper Tailed Two tailed
α = .10 z < - 1.28 z > 1.28 | z | > 1.645
α = .05 z < - 1.645 z > 1.645 | z | > 1.96
α = .01 z < - 2.33 z > 2.33 | z | > 2.575

78
McClave, Statistics, 11th ed. Chapter 8: Inferences
Based on a Single Sample: Tests of Hypotheses
 Two Sample Hypothesis Testing
In a two-sample hypothesis test, two parameters
from two populations are compared.

 For a two-sample hypothesis test,

1. the null hypothesis H0 is a statistical hypothesis that
usually states there is no difference between the
parameters of two populations. The null hypothesis
always contains the symbol , =, or .
2. the alternative hypothesis Ha is a statistical hypothesis
that is true when H0 is false. The alternative hypothesis
always contains the symbol >, , or <.
 Two Sample Hypothesis Testing
To write a null and alternative hypothesis for a two-sample
hypothesis test, translate the claim made about the population
parameters from a verbal statement to a mathematical statement.

H0: μ1 =
H0 : μ 1  μ 2 H0 : μ 1  μ 2
μ2
Ha: μ1 > μ2 Ha: μ1 < μ2
Ha: μ1  μ2

Regardless of which hypotheses used, μ1 = μ2 is

always assumed to be true.
 Two Sample z-Test
Three conditions are necessary to perform a z-test for the
difference between two population means μ1 and μ2.

1. The samples must be randomly selected.

2. The samples must be independent. Two
samples are independent if the sample
selected from one population is not related to
the sample selected from the second
population.
3. Each sample size must be at least 30, or, if not,
each population must have a normal
distribution with a known standard deviation.
 Two Sample z-Test
If these requirements are met, the sampling distribution for
(thexdifference
 x of the sample means) is a normal distribution with
mean 1and standard
2
error of

μx  x  μx  μx  μ1  μ2
1 2 1 2

and
2 2
σ σ
σx  x  σx2  σx2  1  2 .
1 2 1
n1 n2
2

Sampling distribution
for x1  x2  σx  x
1 2
μ1  μ2 σx  x
1 2
x1  x2
 Two Sample z-Test
Two-Sample z-Test for the Difference Between
Means
A two-sample z-test can be used to test the difference
between two population means μ1 and μ2 when a large
sample (at least 30) is randomly selected from each
population and
x1  xthe samples are independent. The test
2
statistic is and the standardized test statistic is
z
x1  x2  μ1  μ2
where σx  x 
σ12 σ22
 .
σx  x
1 2
1 2
n1 n2
When the samples are large, you can use s1 and s2 in
place of 1 and 2. If the samples are not large, you can
still use a two-sample z-test, provided the populations are
normally distributed and the population standard
deviations are known.
 Two Sample z-Test for the
Means
Using a Two-Sample z-Test for the Difference
Between Means (Large Independent Samples)
In Words In Symbols
1. State the claim mathematically. State H0 and Ha.
Identify the null and
alternative hypotheses.
2. Specify the level of Identify .
significance.
3. Sketch the sampling Use Table 4 in
distribution. Appendix B.
4. Determine the critical value(s).
5. Determine the rejection
regions(s). Continued.
 Two Sample z-Test for the
Means
Using a Two-Sample z-Test for the Difference
Between Means (Large Independent Samples)
In Words In Symbols
x1  x2  μ1  μ2
6. Find the standardized test z
σx  x
statistic. 1 2

7. Make a decision to reject or fail If z is in the

to reject the null hypothesis. rejection region,
8. Interpret the decision in the reject H0.
context of the original claim. Otherwise, fail to
reject H0.
 Two Sample z-Test for the
Means
Example:
A high school math teacher claims that students in
her class will score higher on the math portion of the
ACT than students in a colleague’s math class. The
mean ACT math score for 49 students in her class is
22.1 and the standard deviation is 4.8. The mean
ACT math score for 44 of the colleague’s students is
19.8 and the standard deviation is 5.4. At  = 0.10,
can the teacher’s claim be supported?
H0: 1  2
=
Ha: 1 > 2 (Claim) 0.10

-3 -2 -1 0 1 2 3
z

z0 = 1.28 Continued.
 Two Sample z-Test for the
Means
Example continued:
H0: 1  2 z0 = 1.28
Ha: 1 > 2 (Claim) z
-3 -2 -1 0 1 2 3

The standardized error is Reject H0.

σ12 σ22 4.82
5.42
σx  x     1.0644.
1 2
n1 n2 49 44

The standardized test statistic is

z
x1  x2  μ1  μ2 22.1  19.8  0
 2.161
σx  x 1.0644
1 2

There is enough evidence at the 10% level to support th

teacher’s claim that her students score better on the
ACT.
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-88
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-89
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-90
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-91
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-92
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-93
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-94
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-95
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-96
Business Statistics: A Decision-Making Approach, 7e © 2008 Prentice-Hall, Inc. Chap 9-97