HYPOTHESIS

TESTING
THE statistical variables
Some criteria in the selection of variables

1. appropriateness
2. clarity
3. measurability
4. comparability
Two types of variables
1.Dependent variable
 - a factor, property, characteristics or attribute that is
measured and made the object of analysis.

2. Independent variable

 - a factor, property, attribute, characteristic or
approach that is introduced, manipulated or treated to
determine if it influenced or causes change on the
dependent variable.
Sample Problems
• Can the number of customers and price
increase be used to predict weekly sales?

• Can consumer’s perceptions of quality be

determined by their perceptions of prices,
brand image, and brand attitudes?
Level of Measurements
Recall

Two Types of Statistics

Descriptive Statistics
Inferential Statistics
 Descriptive Statistics

 Descriptive statistics is the term given to the analysis of data

that helps describe, show or summarize data in a meaningful
way.
 Descriptive statistics do not, however, allow us to make
conclusions beyond the data we have analyzed or reach
conclusions regarding any hypotheses we might have made.
They are simply a way to describe our data.
 When we use descriptive statistics it is useful to summarize
our group of data using a combination of tabulated description
(i.e., tables), graphical description (i.e., graphs and charts) and
statistical commentary (i.e., a discussion of the results).
Sample Problems for Descriptive Statistics
Application

 What is the monthly allowance of all the

students of ABC University?
 What are the political views of the youth in the
urban areas with respect to inflation rate in
Southeast Asia?
 What are the possible risks encountered in
purchasing a life insurance as perceived by
policy holders?
 Inferential Statistics
 With inferential statistics, you are trying to reach
conclusions that extend beyond the immediate data alone.
For instance, we use inferential statistics to try to infer
from the sample data what the population might think. Or,
we use inferential statistics to make judgments of the
probability that an observed difference between groups is
a dependable one or one that might have happened by
chance in this study. Thus, we use inferential statistics to
make inferences from our data to more general conditions;
we use descriptive statistics simply to describe what's
going on in our data.
Sample Problems for Inferential Statistics
Application

 Is there a significant difference between the performance

of U.E. graduates in the October CPA board examination
and May CPA board examination?
 Is there a significant difference in the performance of
students when classified according sex, year level, and
socio-economic status?
 Is there a significant relationship between the mathematics
and competency levels of first year students of a
University?
Hypothesis Testing
Hypothesis testing is a statistical method
that is used in making statistical decisions
using experimental data. Hypothesis testing
is basically an assumption that we make
about the population parameter.
Procedure in Hypothesis Testing

1. State the null hypothesis and alternative hypothesis.

2. Choose the level of significance.
3. Select appropriate test statistic.
4. Determine the critical values that divide the rejection
and nonrejection regions (if the decision is to be based
on P value it is not necessary to state the critical region).
5. Compute for the value of the test statistic from the
sample data.
6. Make a statistical decision.
7. State the conclusion.
Two Types of Statistical Hypotheses
 Null Hypothesis (H0 – “H sub Zero/ H null”)

The null hypothesis states that a population parameter is

equal to a value. The null hypothesis is often an initial claim
that researchers specify using previous research or
knowledge. It is a statement of no effect, relationship, or
difference between two or more groups or factors. In
research studies, a researcher is usually interested in
disproving the null hypothesis. .
Examples:

 There is no difference between the average ages

of male and female customers.

 Theintervention and control groups have the

same survival rate (or, the intervention does not
improve survival rate).

 Thereis no association between the atmospheric

temperature and the total sales of fruit shake.
 Alternative Hypothesis (H1 or Ha)

An alternative hypothesis states that the population

parameter is different than the value of the population
parameter is different than the value of the population
parameter in the null hypothesis. The alternative
hypothesis is what you might believe to be true or hope
to prove true. It is the statement that there is an effect
or difference. This is usually the hypothesis the
researcher is interested in proving.
Examples:

 The average age of male customers differs with

the average age of female customers.

 The time to resuscitation from cardiac arrest is

lower for the intervention group than for the
control.

 Thereis an association between the atmospheric

temperature and the total sales of fruit shake.
 The alternative hypothesis can be one-
sided (only provides one direction) or
two-sided. We often use two-sided tests
even when our true hypothesis is one-
sided because it requires more evidence
against the null hypothesis to accept the
alternative hypothesis.
 In order to state the hypothesis correctly, the researcher must
translate correctly the claim into mathematical symbols.
There are three possible sets of statistical hypotheses.

1. H0 : parameter = specific value(two-tailed

Ha: parameter ≠ specific value test)
2. H0 : parameter = specific value (left-tailed
Ha: parameter < specific value test)
3. H0 : parameter = specific value (right-tailed
Ha: parameter > specific value test)
Hypothesis Testing Common Phrases

> <
 is greater than is less than
 is above is below
 is higher than is lower than
 is longer than is shorter than
 is bigger than is smaller than
 is increased is decreased or
reduced from
Hypothesis Testing Common Phrases

≥
 is greater than or equal to
 is at least
 is not less than

≤
 is less than or equal to
 is at most
 is not more than
Hypothesis Testing Common Phrases

=
 is equal to
 is exactly the same as/ is the same as
 has not changed from

≠
 is not equal to
 is different from
 has changed from
 is not the same as
Errors in decision making
Possible situations in testing a statistical hypothesis

Statistical
H0 is TRUE H0 is FALSE
Decision
Type II error
Accept H0 Correct Decision
(β)
Correct
Reject H0 Type I error (α)
Decision
Level of Significance

 The probability of committing a Type I error is called the

level of significance, denoted by the Greek letter alpha
(α). The probability of committing a Type II error,
denoted by β, is difficult to determine unless we have a
specific alternative hypothesis. In hypothesis testing, the
level of significance refers to the degree of significance
in which we accept or reject the null hypothesis which is
assumed as true.
 Inhypothesis testing, 100% accuracy is not
possible for accepting or rejecting a null
hypothesis. So, we therefore select a level of
significance that is usually 0.01, 0.05and 0.10.
That is, if the null hypothesis is rejected, the
probability of a type I error will be 10%, 5% or
1%, and the probability of a correct decision
will be 90%, 95%, or 99%, depending on
which level of significance is used.
 For example, a 0.05 or 5% level of significance is
chosen in designating a test of hypothesis, then there
are about 5 chances in 100 that we would reject the
hypothesis when it should be accepted, i.e., we are
about 95% confident that we made the right decision.
 In a hypothesis-testing situation, the researcher
decides what level of significance to use. it can be any
level, depending on the seriousness of the type I error.
Some properties of α and β
 The Type I and Type II errors are related. A decrease in the
probability of one results in an increase in the probability of
other.
 The size of the critical region, therefore the probability of
committing Type I error can always be reduced by adjusting
the critical value(s).
 An increase in the sample size will reduce α and β
simultaneously.
 If the null hypothesis is false, β is maximum when the true
value of a parameter approaches the hypothesized value. The
greater the distance between the true value and the
hypothesized value, the smaller the β will be.
Critical/Rejection Region

 Aftera significance level is chosen, a

critical value is selected from a table for
the appropriate test. The critical value
determines the critical and the noncritical
regions.
 The critical region or the rejection region
is the range of values of the test value that
indicates that there is a significant
difference and that the null hypothesis
should be rejected. The noncritical or
nonrejection region is the range of values
of the test value that indicates that the
differences was probably due to chance
and that the null hypothesis should not be
rejected.
0.025 0.025
 P value Wording Summary

< 0.001 Extremely Significant ***

0.001 to 0.01 Very Significant **

0.01 to 0.05 Significant *

> 0.05 Not Significant ns

 P value Interpretation
Less than 0.01 Highly statistically significant

(very strong evidence against the null

hypothesis)

0.01 to 0.05 Statistically significant

(Adequate evidence against the null hypothesis)

Not Significant
Greater than 0.05
(Insufficient evidence against the null hypothesis)
Definition of Terms
 Statistical hypothesis – an assertion or conjecture
concerning the population or more populations.
 Null hypothesis – the hypothesis or assumption about the
population parameter we wish to test.
 Alternative hypothesis – the conclusion we accept when
the data fail to support the null hypothesis.
 Significance level - a value indicating the percentage of
sample values that is outside a certain limits, assuming the
null hypothesis is correct; i.e. the probability of rejecting
the null hypothesis.
Definition of Terms
 Power of the test – the probability of rejecting the null
hypothesis when it is false, i.e. it is measure of how well
the hypothesis test is working.
 Test statistic – a statistic used in deciding whether to
reject or to accept the null hypothesis.
 Confidence level – the probability that the parameter
tested is within the specified values in the hypothesis.
 Critical region or rejection region – part of the set of all
possible values of a sample statistic for which the
hypothesis to be tested is rejected.
Definition of Terms
 Critical value – the last number observed in passing from
the acceptance region into the rejection region.
 Dependent samples – samples drawn from two
populations in such a way that the elements were not
chosen independently of one another, in order to allow a
more precise analysis or to control for some extraneous
factors.
 One-tailed test – a hypothesis test in which there is only
one rejection regions, i.e. we are concerned only with
whether the observed values deviates from the hypothesis
value in one direction.
Definition of Terms

 Two-tailed test – a hypothesis test in which the null

hypothesis is rejected if the sample is significantly
higher or lower than the hypothesized value of the
population parameter; a test involving two rejection
regions.
 Type I error – rejection of the true hypothesis.
 Type II error – acceptance of the false hypothesis.
Sample problems
Example 1

 Problem 1
 The average baptismal cost includes 50 guests. A
random sample of 32 baptismal during the past year
in the National Capital Region had a mean of 53
guests and a standard deviation of 10. Is there
sufficient evidence at the 0.05 level of significance
that the average number of guests differs from the
national average?
Solution:
 Given: sample mean = 53 sample sd = 10
population mean = 50 n = 32

Step 1. Ho : µ = 50
Ha : µ ≠ 50 (claim)
Step 2. α = 0.05
Step 3. The z critical value is ± 1. 960
(it is two-tailed test, since it does not mention about the
direction of the distribution).
  
Step 4. Computation
one sample z test value
z = sample mean – population mean
sample sd/
= 53 – 50 (
10
= 1.697

Step 5. Do not reject the null hypothesis at α = 0.05, since

1.697 < 1.960
Step 6. Conclusion

Since we do not reject the null hypothesis, we can

conclude that there is no enough evidence to support the
claim that the average guest in a baptismal is not equal to
50.
Example 2
As an aid for improving employees working habits,
eight employees were randomly selected to attend a
seminar-workshop on the importance of work. The
table shows the number of workload done per week
before and after the seminar-workshop. At 0.05 alpha
level, was there a significant difference in the
performance level of employees before and after the
seminar-workshop?
Before 14 13 9 9 10 10 12 7

After 11 15 10 14 14 13 11 12
 Answer

Step
   1.
Ho: There is no significant difference in the performance
level of employees before and after the seminar-workshop.
()

Ha: There is a significant difference in the performance

level of employees before and after the seminar-workshop.
()
Step 2. The level of significance is α = 0.05.

Step 3. Test statistic is Paired sample t – test

Step 4. Determine the degrees of freedom and

the critical region
df = n – 1 = 8 – 1 = 7 and t critical = 2.365
Step 5. Computation of t value for paired samples.

Before (x1) After (X2) D = X2 – X1

14 11 -3 9

13 15 2 4

9 10 1 1

9 14 5 25

10 14 4 16

10 13 3 9

12 11 -1 1

7 12 5 25

ƩD = 16 Ʃ = 90
Continuation…
 Determine
  the mean of the differences.
= =2
 Determine the standard deviation of the differences.
= = 2.878
 Determine the test value
t = = = 1.966
Step 6. Decision Rule
Since the computed t value of 1.966 is less than the t
critical of 2. 365 at level of significance of 0.05, the
statistical decision is not to reject the null hypothesis.

Step 7. Conclusion.
Since we do not reject the Ho, we can conclude that
there is no significant difference in the performance level of
employees before and after the seminar-workshop.
Example 3
The operations manager of sales company wants to see
whether there is a significant difference in the ages of male
and female customers. He selects a sample of 35 samples for
each group. The ages are shown here. At α = 0.05, decide if
there is enough evidence to reject the claim of no difference
in the ages of the two groups.

Male Female
= 27.3 = 28
s = 2.4 s = 3.1
n = 35 n = 35 
 Answer

Step
   1.
Ho: There is no significant difference between the average
ages of male and female customers. ()
Ha: There is a significant difference between the average
ages of male and female customers. ()
Step 2. The level of significance is α = 0.05.

Step 3. Test statistic is z test for comparing two means from

independent populations

Step 4. The critical value is ± 1.960.

Step
   5. Compute the test value.
z=
=
z = -1.056
Step 6. Decision rule:
Do not reject the null hypothesis at α = 0.05, since /-
1.056/ < /±1.960/.

Step 7. Conclusion.
There is no evidence of significant differences between
the averages ages of male and female customers.
Some Statistical Tools
Purpose of Test Parametric Nonparametric
(Random (Non-random
sampling) sampling)
Significant difference T –test (Independent Mann – Whitney U test
between 2 groups samples)
Paired samples Paired t – test Wilcoxon Signed -Rank
Test
Degree of association Pearson’s r (Pearson’s Spearman’s rho (spearman
between the two variables product-moment rank correlation)
correlation coefficient)
Difference between chi-square test Chi-square goodness-of-fit
categorical variables (Pearson’s chi-square test) test
Significant difference One – way Analysis of Kruskal Wallis Test
between 3 or more groups Variance (ANOVA)