Z Test

Testing of Hypothesis
• Population
• Sample
• Parameter
• Statistic
• Standard Error – Standard deviation of the sampling

distribution of a statistic.
Test of Significance
(i) The deviation between the observed sample statistic and the
hypothetical parameter value.
(ii) The deviation between two independent sample statistics; is
significant or might be attributed to chance or the fluctuations of
sampling.
Large Sample Tests (𝒏 > 𝟑𝟎): Normal Test of significance.
Small Sample Tests(𝒏 < 𝟑𝟎): t-test, F-test and Chi-square Test.
Null Hypothesis 𝑯𝟎 : The hypothesis which is tested for possible rejection
under the assumption that it is true.
Ex: 𝑯𝟎 : 𝝁 = 𝝁𝟎 𝜇 − population mean
Alternative Hypothesis 𝑯𝟏 : Any hypothesis which is complementary to the

null hypothesis.
Ex: 𝑯𝟏 : 𝝁 ≠ 𝝁𝟎 (𝝁 > 𝝁𝟎 or 𝝁 < 𝝁𝟎 ) (Two-tailed alternative)

𝑯𝟏 : 𝝁 > 𝝁𝟎 (right-tailed alternative)
𝑯𝟏 : 𝝁 < 𝝁𝟎 (left-tailed alternative)
Type – I Error : Reject 𝑯𝟎 when it is true.
𝑃 Reject 𝑯𝟎 𝑯𝟎 } = 𝜶
Type – II Error : Accept 𝑯𝟎 when it is wrong. i.e., accept 𝑯𝟎 when 𝑯𝟏 is
true.
𝑃 Accept 𝑯𝟎 𝑯𝟏 } = 𝛃
Critical Region: A region in the sample space S which amounts to

rejection of 𝑯𝟎 is termed as critical region of rejection.
Level of Significance: The probability ′𝛼′ that a random value of the
statistic 𝑡 belongs to the critical region is known as
the level of significance. (𝟓% 𝑎𝑛𝑑 𝟏%)
Degree of Freedom: The number of independent observations, on which
a test is based, is known as d.f. of the test statistic.
𝒕−𝑬(𝒕)
Test Statistic: 𝒁= ~ 𝑵(𝟎, 𝟏) asymptotically as 𝒏 → ∞
𝑺.𝑬.(𝒕)
Critical Values or Significant Values: The critical value of the test statistic at
level of significance 𝜶 for two-tailed
test is given by:
𝑃 𝑍 > 𝑧𝛼 = 𝛼
𝑃 𝑍 > 𝑧𝛼 + 𝑃 𝑍 < −𝑧𝛼 = 𝛼
𝑃 𝑍 > 𝑧𝛼 + 𝑃 𝑍 > 𝑧𝛼 = 𝛼 (By Symmetry)
2 𝑃 𝑍 > 𝑧𝛼 = 𝛼
𝑃 𝑍 > 𝑧𝛼 = 𝛼 2
In case of one-tailed test, the critical value 𝑧𝛼 is determined as:
For Right tailed test : 𝑷 𝒁 > 𝒛𝜶 = 𝜶
For left tailed test : 𝑷 𝒁 < −𝒛𝜶 = 𝜶

The critical value of 𝒁 at commonly used level of significance are:
Critical Value Level of Significance (𝜶)

(𝒛𝜶 ) 𝟏% 𝟓% 𝟏𝟎%
Two-tailed Test 2.58 1.96 1.645
Right-tailed
2.33 1.645 1.28
Test
Left-tailed Test -2.33 -1.645 -1.28
Procedure for Testing of Hypothesis
1. Set up the Null Hypothesis 𝑯𝟎 .
2. Set up the Alternative Hypothesis (𝑯𝟏 ).
3. Choose the appropriate Level of Significance (𝜶).
𝒕−𝑬(𝒕)
4. Compute the Test Statistic: 𝒁 = , under 𝐻0
𝑺.𝑬.(𝒕)
5. Conclusion. We compare the computed value of 𝐙 in step 4 with
the significant value (tabulated value) 𝐳𝛂 at the
given level of significance.
If 𝒁𝒄𝒂𝒍 < |𝒛𝜶 | -- accept the null hypothesis 𝑯𝟎 .
If 𝒁𝒄𝒂𝒍 > |𝒛𝜶 | -- reject the null hypothesis 𝑯𝟎 ,
i.e., accept the alternative hypothesis 𝑯𝟏 .
Test for Single Mean
The test statistic for testing 𝑯𝟎 : 𝝁 = 𝝁𝟎 𝝁- population mean
vs
the alternative hypothesis: 𝑯𝟏 : 𝝁 ≠ 𝝁𝟎 (𝝁 > 𝝁𝟎 or 𝝁 < 𝝁𝟎 )
(Two-tailed alternative) or
𝑯𝟏 : 𝝁 > 𝝁𝟎 (right-tailed alternative)
𝑯𝟏 : 𝝁 < 𝝁𝟎 (left-tailed alternative)
𝒙−𝝁
Is given by: 𝒁= ~ 𝑵(𝟎, 𝟏) ; 𝒙 - sample mean
𝝈 𝒏
(i) If the population s.d. 𝝈 is unknown then the estimate of 𝝈 ,
𝒙−𝝁
the sample variance is used for test statistic. i.e., 𝒁=
𝒔 𝒏
Example 1:
A sample of 900 units has a mean 3.4 cms and standard deviation 2.61
cms. Is the sample from a large population of mean 3.25 cms and s.d.
2.61 cms at 5% level of significance ?
Solution:Given, Sample mean: 𝒙 = 3.4 Population Mean : 𝝁 = 𝟑. 𝟐𝟓
Sample size : n = 900 Population Standard deviation : 𝝈 = 𝟐. 𝟔𝟏
1. Null Hypothesis : 𝑯𝟎 : 𝝁 = 𝟑. 𝟐𝟓
2. Alternative hypothesis: 𝑯𝟏 : 𝝁 ≠ 𝟑. 𝟐𝟓 (Two-tailed test)
3. Level of Significance (𝜶) = 5% and 𝒛𝜶 = 𝟏. 𝟗𝟔
𝒙−𝝁 𝟑.𝟒 −𝟑.𝟐𝟓

4. Test statistic is given by: 𝒁= = = 𝟏. 𝟕𝟑
𝝈 𝒏 𝟐.𝟔𝟏 𝟗𝟎𝟎
𝒁𝒄𝒂𝒍 < |𝒛𝜶 | ⟹ 1.73 < 1.96
5. Accept the null hypothesis 𝑯𝟎 : 𝝁 = 𝟑. 𝟐𝟓

Example 2:
The mean height of 54 policeman is 67 inches with a population standard
deviation 3.26 inches. Can it be believed that the average height of
population is 66 inches at 5% level of significance ?
Example 3:
An insurance agent has claimed that the average age of policy holders who
insure through him is less than the average for all agents, which is 30.5 years.
A random sample of 100 policy holders who had insured through him gave
the following age distribution:
Age 16-20 21-25 26-30 31-35 36-40
No. of
12 22 20 30 16
Persons
Test the claim at 5% level of significance.

Test of Significance of Difference of Means:
Let 𝑥1 be the mean of a sample of size 𝑛1 from a population with mean 𝜇1 and
variance 𝜎12 and 𝑥2 be the mean of a sample of size 𝑛2 from a population with
mean 𝜇2 and variance 𝜎22
𝑥1 ~ 𝑁(𝜇1 , 𝜎12 𝑛1 ) and 𝑥2 ~ 𝑁(𝜇2 , 𝜎22 𝑛2 )
Also 𝑥1 − 𝑥2 being the difference of two independent normal variates is also
a normal variate. Then the test statistic :
𝑥1 −𝑥2 −𝑬( 𝑥1 − 𝑥2 )
𝒁=
𝑺.𝑬. ( 𝑥1 − 𝑥2 )
~ 𝑁(0, 1)
𝑥1 −𝑥2
i.e., 𝒁= ~ 𝑁(0, 1)
𝜎12 2 𝑛
𝑛1 +𝜎2 2
Remarks:
1. If 𝜎12 = 𝜎22 = 𝜎 2 i.e., if the sample have been drawn from the
populations with common Standard Deviation (𝜎)
𝑥1 −𝑥2
𝒁= ~ 𝑁(0, 1)
𝝈 1 𝑛1 +1 𝑛2
2. If 𝜎 is not known, then the unbiased estimator of 𝜎 2 is given by:
𝑛 𝑠 2 + 𝑛 𝑠2
𝜎2 = 1 1 2 2
𝑛1 +𝑛2
If 𝜎12 ≠ 𝜎22 and 𝜎1 and 𝜎2 are not known,
𝑥1 − 𝑥2
𝒁= ~ 𝑁(0, 1)
𝑠12 𝑛1 +𝑠22 𝑛2
The test statistic for testing
the Null hypothesis is: 𝑯𝟎 : 𝝁𝟏 = 𝝁𝟐
vs
the Alternative hypothesis: 𝑯𝟏 : 𝝁𝟏 ≠ 𝝁𝟐 (𝝁𝟏 > 𝝁𝟐 or 𝝁𝟏 < 𝝁𝟐 )

𝑯𝟏 : 𝝁𝟏 > 𝝁𝟐 (right-tailed alternative)
𝑯𝟏 : 𝝁𝟏 < 𝝁𝟐 (left-tailed alternative)

Example 4:
The means of two single large samples of 1000 and 2000 members are
67.5 inches and 68.0 inches. Can the samples be regarded as drawn from
the same population of standard deviation 2.5 inches ? (Test at 5% level
of significance)
Example 5:
The average hourly wage of a sample of 150 workers in a plant ‘A’ was
Rs. 2.56 with a s.d. of Rs. 1.08. The average hourly wage of a sample
of 200 workers in a plant ‘B’ was Rs. 2.87 with a s.d. of Rs. 1.28. Can
an applicant safety assume that the hourly wages paid by plant ‘B’ are
higher than those paid by a plant ‘A’?
Sampling of Attributes
The presence of an attribute in a sampled unit may be termed as success and
its absence as failure. If 𝑿 is the number of successes in 𝒏 independent
trials with constant probability 𝑷 of Success for each trial, then
𝐸 𝑋 = 𝑛𝑃 𝑉𝑎𝑟 𝑋 = 𝑛𝑃𝑄, 𝑄 =1−𝑃
where 𝑋~𝐵𝑖𝑛(𝑛, 𝑃) 𝑃 = Population proportion
𝑿−𝑬(𝑿) 𝑿−𝒏𝑷
and the test statistic is given by: 𝒁= = ~ 𝑵(𝟎, 𝟏)
𝑽(𝑿) 𝒏𝑷𝑸
sample Proportion of successes = 𝑝 = 𝑋
𝑛
𝑋 1 1
E 𝑝 =𝐸 𝑛 = 𝐸 𝑋 = 𝑛𝑃 = 𝑃
𝑛 𝑛
𝑋 1 1
𝑉 𝑃 =𝑉 𝑛 = 2𝑉 𝑋 = 2 𝑛𝑃𝑄 = 𝑛𝑃𝑄
𝑛 𝑛
𝑃𝑄
𝑆. 𝐸. 𝑝 =
𝑛
Test for Single Proportion
𝒑 − 𝑬(𝒑) 𝒑 − 𝑷
𝒁= = ~ 𝑵(𝟎, 𝟏)
𝑺. 𝑬. (𝒑) 𝑃𝑄
𝑛
The test statistic for testing 𝑯𝟎 : 𝑷 = 𝑷𝟎

vs
the alternative hypothesis: 𝑯𝟏 : 𝑷 ≠ 𝑷𝟎 (𝑷 > 𝑷𝟎 or 𝑷 < 𝑷𝟎 )
𝑯𝟏 : 𝑷 > 𝑷𝟎 (right-tailed alternative)
𝑯𝟏 : 𝑷 < 𝑷𝟎 (left-tailed alternative)

Example 6:
A survey was conducted by a car servicing company to know whether
70% of its customers are satisfied or not. The company contacted 260
customers and 157 of then showed satisfaction towards the service. Can
it be concluded on the basis of data 5% l.o.s. that company’s expectation
is genuinely true.
Example 7:
Twenty people were attacked by a disease and only 18 survived. Will you
reject the hypothesis that the survival rate, if attacked by this disease, is 85%
in favour of the hypothesis that it is more, at 5% level of significance.
Test of Significance of Difference of Two
Population Proportions:
Draw two independent random samples, 𝑛1 from the population 1 with
sample proportion 𝑝1 and 𝑛2 from the population 2 with sample
proportion 𝑝2
1. If 𝑃1 = 𝑃2 = 𝑃 i.e., if the sample have been drawn from the

populations with common Population proportion(𝑃)
𝑝1 −𝑝2
𝒁= ~ 𝑁(0, 1)
𝑷𝑸(1 𝑛1 +1 𝑛2 )
𝑛1 𝑝1 +𝑛2 𝑝2 𝑋1 +𝑋2
Where 𝑃 = =
𝑛1 +𝑛2 𝑛1 +𝑛2
Example 8:
In a large city A, 20% of a random sample of 900 school children had
defective eye-sight. In other city B, 15% of random sample of 1600
children had the same defect. Is this difference between the two
proportions significant ?
Example 9:
Before an increase in excise duty on tea, 800 persons out of sample of
1000 persons were found to be tea drinkers. After an increase in duty, 800
people were tea drinkers in a sample of 1200 people. Using standard error
of proportion, state whether there is a significant decrease in the
consumption of tea after the increase in excise duty?

Z Test

Uploaded by

Copyright:

Available Formats

Z Test

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Z Test

Uploaded by

Copyright:

Available Formats

Testing of Hypothesis

• Standard Error – Standard deviation of the sampling

Large Sample Tests (𝒏 > 𝟑𝟎): Normal Test of significance.

Alternative Hypothesis 𝑯𝟏 : Any hypothesis which is complementary to the

Ex: 𝑯𝟏 : 𝝁 ≠ 𝝁𝟎 (𝝁 > 𝝁𝟎 or 𝝁 < 𝝁𝟎 ) (Two-tailed alternative)

Critical Region: A region in the sample space S which amounts to

𝑃 𝑍 > 𝑧𝛼 + 𝑃 𝑍 < −𝑧𝛼 = 𝛼

𝑃 𝑍 > 𝑧𝛼 + 𝑃 𝑍 > 𝑧𝛼 = 𝛼 (By Symmetry)

For Right tailed test : 𝑷 𝒁 > 𝒛𝜶 = 𝜶

For left tailed test : 𝑷 𝒁 < −𝒛𝜶 = 𝜶

Critical Value Level of Significance (𝜶)

Two-tailed Test 2.58 1.96 1.645

2. Alternative hypothesis: 𝑯𝟏 : 𝝁 ≠ 𝟑. 𝟐𝟓 (Two-tailed test)

3. Level of Significance (𝜶) = 5% and 𝒛𝜶 = 𝟏. 𝟗𝟔

𝒙−𝝁 𝟑.𝟒 −𝟑.𝟐𝟓

5. Accept the null hypothesis 𝑯𝟎 : 𝝁 = 𝟑. 𝟐𝟓

Age 16-20 21-25 26-30 31-35 36-40

Test the claim at 5% level of significance.

the Null hypothesis is: 𝑯𝟎 : 𝝁𝟏 = 𝝁𝟐

the Alternative hypothesis: 𝑯𝟏 : 𝝁𝟏 ≠ 𝝁𝟐 (𝝁𝟏 > 𝝁𝟐 or 𝝁𝟏 < 𝝁𝟐 )

𝑯𝟏 : 𝝁𝟏 > 𝝁𝟐 (right-tailed alternative)

𝑯𝟏 : 𝝁𝟏 < 𝝁𝟐 (left-tailed alternative)

The test statistic for testing 𝑯𝟎 : 𝑷 = 𝑷𝟎

𝑯𝟏 : 𝑷 > 𝑷𝟎 (right-tailed alternative)

𝑯𝟏 : 𝑷 < 𝑷𝟎 (left-tailed alternative)

1. If 𝑃1 = 𝑃2 = 𝑃 i.e., if the sample have been drawn from the

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.