Frequency Distribution and Hypothesis
Testing
Frequency Distribution
• In a frequency distribution, one variable is
considered at a time.
• A frequency distribution for a variable produces
a table of frequency counts, percentages, and
cumulative percentages for all the values
associated with that variable.
Frequency Histogram
8
7
6
Frequency
5
4
3
2
1
0
2 3 4 5 6 7
Familiarity
Steps Involved in Hypothesis Testing
Formulate H0 and H1
Select Appropriate Test
Choose Level of Significance
Collect Data and Calculate Test Statistic
Determine Probability Determine Critical
Associated with Test Value of Test Statistic
Statistic TSCR
Determine if TSCAL
Compare with
falls into (Non)
Level of
Rejection Region
Significance,
Reject or Do not Reject
H0
Draw Marketing Research Conclusion
A General Procedure for Hypothesis Testing
Step 1: Formulate the Hypothesis
• A null hypothesis is a statement of the status quo,
one of no difference or no effect. If the null
hypothesis is not rejected, no changes will be made.
• An alternative hypothesis is one in which some
difference or effect is expected. Accepting the
alternative hypothesis will lead to changes in
opinions or actions.
A General Procedure for Hypothesis Testing
Step 1: Formulate the Hypothesis
• In marketing research, the null hypothesis is
formulated in such a way that its rejection
leads to the acceptance of the desired
conclusion. The alternative hypothesis
represents the conclusion for which evidence
is sought.
H0: 0.40
H1: > 0.40
A General Procedure for Hypothesis Testing
Step 2: Select an Appropriate Test
• The test statistic measures how close the
sample has come to the null hypothesis.
• The test statistic often follows a well-known
distribution, such as the normal, t, or chi-
square distribution.
A General Procedure for Hypothesis Testing
Step 3: Choose a Level of Significance
Type I Error
• Type I error occurs when the sample results
lead to the rejection of the null hypothesis when
it is in fact true.
• The probability of type I error ( ) is also called
the level of significance.
• Null Hypothesis: Person is not guilty of the crime
• Person is judged as guilty when the person
actually did not commit the crime
(convicting an innocent person)
A General Procedure for Hypothesis Testing
Step 3: Choose a Level of Significance
Type II Error
• Type II error occurs when, based on the sample
results, the null hypothesis is not rejected when
it is in fact false.
• The probability of type II error is denoted by .
• Null Hypothesis: Person is not guilty of the crime
• Person is judged not guilty when they actually
did commit
the crime (letting a guilty person go
free)
A General Procedure for Hypothesis Testing
Step 3: Choose a Level of Significance
Power of a Test
• The power of a test is the probability (1 - ) of
rejecting the null hypothesis when it is false and
should be rejected.
A General Procedure for Hypothesis Testing
Step 4: Collect Data and Calculate Test Statistic
• The required data are collected and the value
of the test statistic computed.
A General Procedure for Hypothesis Testing
Step 5: Determine the Probability (Critical Value)
• Using standard normal tables
A General Procedure for Hypothesis Testing Steps 6 &7:
Compare the Probability (Critical Value) & Making the Decision
• If the probability associated with the calculated or observed
value of the test statistic (TSCAL) is less than the level of
significance ( ), the
null hypothesis is rejected.
• Alternatively, if the absolute calculated value of the test
statistic (|TSCAL|) is greater than the absolute critical value of
the test statistic (|TSCR |), the null hypothesis is rejected.
A General Procedure for Hypothesis Testing Steps 6 & 7:
Compare the Probability (Critical Value) & Making the
Decision
• Note that the two ways of testing the null hypothesis are
equivalent but mathematically opposite in the direction of
comparison.
• If the probability of TSCAL < significance level ( ) then
reject H0 but if |TSCAL | > |TSCR| then reject H0.
A General Procedure for Hypothesis Testing
Step 8: Marketing Research Conclusion
• The conclusion reached by hypothesis testing
must be expressed in terms of the marketing
research problem.
A Broad Classification of Hypothesis Tests
Hypothesis Tests
Tests of Tests of
Association Differences
Median/
Distribution Means Proportions
Rankings
s
Hypothesis Testing Related to Differences
• Parametric tests assume that the variables of interest are measured on
at least an interval scale.
• Nonparametric tests assume that the variables are measured on a
nominal or ordinal scale.
• These tests can be further classified based on whether one or two or more
samples are involved.
• The samples are independent if they are drawn randomly from different
populations. For the purpose of analysis, data pertaining to different
groups of respondents, e.g., males and females, are generally treated as
independent samples.
• The samples are paired when the data for the two samples relate to the
same group of respondents.
A Classification of Hypothesis Testing
Procedures for Examining Differences
Hypothesis Tests
Parametric Non-parametric Tests
Tests (Metric (Nonmetric Tests)
Tests)
One Sample Two or More One Sample Two or More
Samples Samples
* t test * Chi-Square
* Z test * K-S
* Runs
* Binomial
Independen Paired
t Samples Samples Independen Paired
t Samples Samples
* Two-Group t * Paired
test * Chi-Square * Sign
t test * Mann-Whitney * Wilcoxon
* Z test
* Median * McNemar
* K-S * Chi-Square
