10- 1

One-Sample Tests of Hypothesis

Plan

1. What is a hypothesis and what is hypothesis testing?

2. Hypothesis testing procedure.
3. Null and Alternative Hypotheses. Type I and Type II
errors hypothesis testing.
4. One-tailed and a two-tailed tests of significance.

5. Test of hypothesis about a population mean.

6. Test of hypothesis about a population proportion.

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 10- 2

1. What is a Hypothesis?
A Hypothesis is a statement about the value of a
population parameter developed for the purpose
of testing.
Examples of hypotheses made about a population
parameter are:
The mean monthly income for systems
analysts is $3,625.
Twenty percent of all customers at Bovine’s
Chop House return for another meal within a
month.

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 10- 3

What is a Hypothesis?

A hypothesis about population mean

Example: The mean monthly cell phone bill

in this city is μ = $42

A hypothesis about population proportion

Example: The proportion of adults in this
city with cell phones is π = 0.68

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 10- 4

1. What is Hypothesis Testing?

Hypothesis testing is a procedure, based on
sample evidence and probability theory, used to
determine whether the hypothesis is a reasonable
statement and should not be rejected, or is
unreasonable and should be rejected.

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 10- 5

2. Hypothesis Testing Procedure

Step 1: State null and alternate hypotheses

Step 2: Select a level of significance

Step 3: Identify the test statistic

Step 4: Formulate a decision rule

Step 5: Take a sample, arrive at a decision

Do not reject null Reject null and accept alternate

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 10- 6

3. Null and Alternative Hypotheses

 Null Hypothesis H0: A statement about the value
of a population parameter.
Alternative Hypothesis H1: A statement that is
accepted if the sample data provide evidence that the
null hypothesis is false.
Level of Significance: The probability of rejecting
the null hypothesis when it is actually true.
Type I Error: Rejecting the null hypothesis when it is
actually true.

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 10- 7

Definitions

 Type II Error: Accepting the null hypothesis

when it is actually false.
Test statistic: A value, determined from sample
information, used to determine whether or not to
reject the null hypothesis.
Critical value: The dividing point between the
region where the null hypothesis is rejected and the
region where it is not rejected.

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 10- 8

The Null Hypothesis, H0

States the claim or assertion to be tested

Example: The mean diameter of a manufactured bolt
is 30mm (H 0 : μ  30)

Is always about a population parameter,

not about a sample statistic

H 0 : μ  30 H0 : X  30

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 10- 9

The Null Hypothesis, H0

(continued)

 Begin with the assumption that the null

hypothesis is true
 Similar to the notion of innocent until
proven guilty

 Refers to the status quo or historical value

 Always contains “=“, or “≤”, or “≥” sign
 May or may not be rejected

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 10- 10

The Alternative Hypothesis, H1

 Is the opposite of the null hypothesis

 e.g., The mean diameter of a manufactured bolt is not
equal to 30mm ( H1: μ ≠ 30 )
 Challenges the status quo
 Never contains the “=“, or “≤”, or “≥” sign
 May or may not be proven
 Is generally the hypothesis that the researcher is
trying to prove

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 10- 11

The Hypothesis Testing Process

 Claim: The population mean age is 50.

 H0: μ = 50, H1: μ ≠ 50
 Sample the population and find the sample mean.
Population

Sample

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 10- 12

The Hypothesis Testing Process

(continued)
 Suppose the sample mean age was X = 20.

 This is significantly lower than the claimed mean

population age of 50.

 If the null hypothesis were true, the probability of getting

such a different sample mean would be very small, so you
reject the null hypothesis .

 In other words, getting a sample mean of 20 is so unlikely if

the population mean was 50, you conclude that the population
mean must not be 50.

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 10- 13
(continued)
The Hypothesis Testing Process

Sampling
Distribution of X

X
20 μ = 50
If H0 is true ... then you reject
If it is unlikely that you
the null hypothesis
would get a sample
that μ = 50.
mean of this value ... ... When in fact this were
the population mean…

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 10- 14

4. One-Tailed Tests of Significance

A test is one-tailed when the alternate hypothesis, H1 ,
states a direction, such as:

H1: The mean yearly commissions earned by full-

time realtors is more than $35,000. (µ>$35,000)
H1: The mean speed of trucks traveling on I-95 in
Georgia is less than 60 miles per hour. (µ<60)
H1: Less than 20 percent of the customers pay cash
for their gasoline purchase. (µ<0.20)

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 10- 15
The Test Statistic and
Critical Values
 If the sample mean is close to the stated population
mean, the null hypothesis is not rejected.
 If the sample mean is far from the stated population
mean, the null hypothesis is rejected.
 How far is “far enough” to reject H0?
 The critical value of a test statistic creates a “line in
the sand” for decision making -- it answers the
question of how far is far enough.

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 10- 16
The Test Statistic and
Critical Values
Sampling Distribution of the test statistic

Region of Region of
Rejection Rejection
Region of
Non-Rejection

Critical Values

“Too Far Away” From Mean of Sampling Distribution

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 10- 17
Risks in Decision Making Using
Hypothesis Testing
DCOVA
 Type I Error
 Reject a true null hypothesis

 A type I error is a “false alarm”

 The probability of a Type I Error is 

 Called level of significance of the test

 Set by researcher in advance
 Type II Error
 Failureto reject a false null hypothesis
 Type II error represents a “missed opportunity”

 The probability of a Type II Error is β

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 10- 18
Significance tests are conducted at
a particular level.
For example, at the

5% or 1% level of significance

These percentages represent the chance

of drawing the wrong conclusion.

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 10- 19
Possible Errors in Hypothesis Test
Decision Making

Possible Hypothesis Test Outcomes

Actual Situation

Decision H0 True H0 False

Do Not No Error Type II Error

Reject H0 Probability 1 - α Probability β
Reject H0 Type I Error No Error
Probability α Power 1 - β

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 10- 20
Possible Errors in Hypothesis Test
Decision Making
 The confidence coefficient (1-α) is the probability of not
rejecting H0 when it is true.

 The confidence level of a hypothesis test is

(1-α)*100%.

 The power of a statistical test (1-β) is the probability of

rejecting H0 when it is false.

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 10- 21

Type I & II Error Relationship

DCOVA

 Type I and Type II errors cannot happen at

the same time
 A Type I error can only occur if H0 is true
 A Type II error can only occur if H0 is false

If Type I error probability () , then

Type II error probability (β)

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 10- 22
Figure 1 Rejection regions corresponding to
one- and two-tailed tests

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 10- 23
Table 1 Rejection Regions for Common
Values of α, large n

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 r a l i t r b u i o n :  = 0 ,  = 1

Sampling Distribution for the Statistic Z for 10-

a 24
One-Tailed Test, .05 Level of Significance
0 . 4

0 . 3

.95 probability
.05 region of
0 . 2
rejection
f ( x

0 . 1
Critical
Value
z=1.65
. 0

- 5

0 1 2 3 4

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 10- 25

4. Two-Tailed Tests of Significance

A test is two-tailed when no direction is specified in
the alternate hypothesis H1 , such as:
H1: The mean amount spent by customers at the
Wal-Mart in Georgetown is not equal to $25.
(µ ≠ $25).

H1: The mean price for a gallon of gasoline is not

equal to $1.54. (µ ≠ $1.54).

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 10- 26
Level of Significance
and the Rejection Region
H0: μ = 30 Level of significance = 
H1: μ ≠ 30
 /2  /2

30

Critical values

Rejection Region

This is a two-tail test because there is a rejection region in both tails

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 r a l i t r b u i o n :  = 0 ,  = 1 10- 27
Sampling Distribution for the Statistic Z for a
Two-Tailed Test, .05 Level of Significance
0 . 4

0 . 3

.95 probability

2 .025 regions
0 . 2

of rejection
f ( x

0 . 1
Critical
Value
z=1.96
. 0

- 5

-4 -3 -2 -1 0 1 2 3 4

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 10- 28

5. Test of Hypothesis about a Population Mean

Testing for the Population Mean: Large

Sample, Population Standard Deviation
Known
When testing for the population mean from a
large sample and the population standard
deviation is known, the test statistic is given
by:
X 
z
/ n
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 10- 29

Hypothesis Tests for the Mean

DCOVA

Hypothesis
Tests for 

 Known  Unknown
(Z test) (t test)

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 10- 30
Z Test of Hypothesis for the Mean
(σ Known)
 Convert sample statistic ( X ) to a ZSTAT test statistic
Hypothesis
Tests for 

σKnown
Known σUnknown
Unknown
(Z test) (t test)
The test statistic is:
X μ
ZSTAT 
σ
n

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 10- 31
Critical Value
Approach to Testing
DCOVA
 For a two-tail test for the mean, σ known:
 Convert sample statistic (X ) to test statistic (ZSTAT)
 Determine the critical Z values for a specified
level of significance  from a table or by using
computer software
 Decision Rule: If the test statistic falls in the rejection
region, reject H0 ; otherwise do not reject H0

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 10- 32

Two-Tail Tests

H0: μ = 30
 There are two
H1: μ  30
cutoff values
(critical values),
defining the
regions of /2 /2
rejection
30 X
Reject H0 Do not reject H0 Reject H0

-Zα/2 0 +Zα/2 Z

Lower Upper
critical critical
value value
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 10- 33

EXAMPLE 1

 The processors of Fries’ Catsup indicate on the

label that the bottle contains 16 ounces of catsup.
The standard deviation of the process is 0.5
ounces. A sample of 36 bottles from last hour’s
production revealed a mean weight of 16.12
ounces per bottle. At the .05 significance level is
the process out of control? That is, can we
conclude that the mean amount per bottle is
different from 16 ounces?

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 10- 34

EXAMPLE 1 continued

 Step 1: State the null and the alternative

hypotheses:
H0: μ = 16; H1: μ≠ 16
Step 2: Select the level of significance.
In this case we selected the .05 significance
level.

Step 3: Identify the test statistic.

Because we know the population standard
deviation, the test statistic is z.
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 10- 35

EXAMPLE 1 continued

 Step 4: State the decision rule:

Reject H0 if z > 1.96 or z < -1.96
 Step 5: Compute the value of the test statistic and arrive

at a decision.
X  16 .12  16 .00
z   1.44
 n 0.5 36

Do not reject the null hypothesis. We cannot

conclude the mean is different from 16 ounces.

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 10- 36

P-Value in Hypothesis Testing

A p-Value is the probability, assuming that the null
hypothesis is true, of finding a value of the test statistic
at least as extreme as the computed value for the test.

If the p-Value is smaller than the significance level, H0 is

rejected.
If the p-Value is larger than the significance level, H0 is
not rejected.
The p-value is also called the observed level of
significance.

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 10- 37

Computation of the p-Value

 One-Tailed Test: p-Value = P{z  absolute value

of the computed test statistic value}
 Two-Tailed Test: p-Value = 2P{z  absolute value
of the computed test statistic value}
 From EXAMPLE 1, z = 1.44, and because it was a
two-tailed test, the p-Value = 2P{z  1.44} =
=2(0.5-.4251) = 0.1498. Because 0.1498 > 0.05,
do not reject H0.

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 10- 38
Testing for a Population Mean: Small Sample,
Population Standard Deviation Unknown

The test statistic is the t distribution.

The test statistic for the one sample case is given

by:
X 
t
s/ n

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 10- 39
Testing for the Population Mean: Large Sample,
Population Standard Deviation Unknown

 Here σ is unknown, so we estimate it with the

sample standard deviation s.
 As long as the sample size n > 30, z can be
approximated with:

X 
z
s/ n

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 10- 40

EXAMPLE 2
 Roder’s Discount Store chain issues its own credit
card. Lisa, the credit manager, wants to find out if
the mean monthly unpaid balance is more than
$400. The level of significance is set at .05. A
random check of 172 unpaid balances revealed the
sample mean to be $407 and the sample standard
deviation to be $38. Should Lisa conclude that the
population mean is greater than $400, or is it
reasonable to assume that the difference of $7
($407-$400) is due to chance?

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 10- 41

EXAMPLE 2 continued

X  $407  $400
z   2.42
s n $38 172
H0 is rejected. Lisa can conclude that the mean
unpaid balance is greater than $400.

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 10- 42

Example 3
The current rate for producing 5 amp fuses at Neary
Electric Co. is 250 per hour. A new machine has been
purchased and installed that, according to the supplier,
will increase the production rate. A sample of 10
randomly selected hours from last month revealed the
mean hourly production on the new machine was 256
units, with a sample standard deviation of 6 per hour. At
the .05 significance level can Neary conclude that the
new machine is faster?

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 10- 43

Example 3 continued


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 10- 44

Example 3 continued
 Step 4: State the decision rule. There are 10 – 1 = 9 degrees of
freedom. The null hypothesis is rejected if t > 1.833.

 Step 5: Make a decision and interpret the results.

X  256  250
t   3.162
s n 6 10
The null hypothesis is rejected. The mean number produced is
more than 250 per hour.
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 10- 45
6. Test of hypothesis about a
population proportion
A Proportion is the fraction or percentage that indicates
the part of the population or sample having a particular
trait of interest.
 The sample proportion is denoted by p and is found by:

Number of successesin the sample

p
Number sampled

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 10- 46
Test of hypothesis about a
population proportion
p 
z
 (1   )
n

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 10- 47

EXAMPLE 4
 In the past, 15% of the mail order solicitations for a certain
charity resulted in a financial contribution. A new solicitation
letter that has been drafted is sent to a sample of 200 people
and 45 responded with a contribution. At the .05 significance
level can it be concluded that the new letter is more effective?

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 10- 48

Example 4 continued


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 10- 49

Example 4 continued
 Step 4: State the decision rule.
The null hypothesis is rejected if z is greater than 1.65.
 Step 5: Make a decision and interpret the results.

45
 .15
p  200
z   2.97
 (1   ) .15 (1  .15 )
n 200
The null hypothesis is rejected. More than 15 percent are
responding with a pledge. The new letter is more
effective.

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