Statistics

MODULE 25: Test on Population Mean

LEARNING OUTCOMES

At the end of the module, you are expected to exhibit the following competencies:
1. Formulate appropriate null and alternative hypotheses on the population mean.
2. Identify the appropriate form of the test statistic on the population mean when the population
variance is assumed to be known.
3. Identify the appropriate rejection region for a given level of significance when the population
variance is assumed to be known.

IMPORTANT CONCEPTS

The following are the steps identified in the previous lesson:

1. Formulate the null and alternative hypotheses.

Use the first step of the procedure which is to formulate the appropriate null and alternative hypotheses. This
way, the learners can review on how to formulate the null and alternative hypotheses by asking them to do it
with each of the following real life problems. Through this, learners will be able to identify the population
parameter of interest in the problem.

Here are some real life problem situations that you can use:

1. The father of a senior high school student is lists down the expenses he will incur when he sends his daughter
to the university. At the university where he wants his daughter to study, he hears that the average tuition
fee is at least Php20,000 per semester. He wants to do a test of hypothesis.

In this problem, the parameter of interest is the average tuition fee or the true population mean of the tuition
fee. In symbol, this parameter is denoted as µ. As applied to the problem, the appropriate null and alternative
hypotheses are:

Ho: The average tuition fee in the targeted university is at least Php20,000. In symbols,
Ho: µ ≥ Php20,000. Ha: The average tuition fee in the targeted university is less than Php20,000. In symbols, Ha: µ
< Php20,000.

2. The principal of an elementary school believes that this year, there would be more students from the school
who would pass the National Achievement Test (NAT), so that the proportion of students who passed the NAT
is greater than the proportion obtained in previous year, which is 0.75. What will be the appropriate null and
alternative hypotheses to test this belief?

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In this problem, the parameter of interest is the proportion of students of the school who passed the NAT this
year. In symbol, this parameter is denoted as P. As applied to the problem, the appropriate null and alternative
hypotheses are:

Ho: The proportion of students of the school who passed the NAT this year is equal to 0.75. In symbols,
Ho: P = 0.75. Ha: The proportion of students of the school who passed the NAT this year is greater than 0.75. In
symbols, Ho: P > 0.75.

• A statistical hypothesis is a statement about a parameter and deals with evaluating the value of the parameter.
• The null and alternative hypotheses should be complementary and non-overlapping.
• Generally, the null hypothesis is a statement of equality or includes the equality condition as in the case of ‘at
least’ (greater than or equal) or ‘at most’ (less than or equal).

Choose the first problem or the problem on the average tuition fee to further develop the lesson. In the problem,
the parameter is the population mean. To identify the test statistics, which is part of the second step, certain
assumptions have to be made.

With the assumption of known population variance (σ2 ) and the variable of interest is measured at least in the
interval scale and follows the normal distribution, the appropriate test statistic, denoted as ZC is computed as

where X is the sample mean computed from a simple random sample of n observations; µ0 is the
hypothesized value of the parameter; and σ is the population standard deviation. The test statistic follows the
standard normal distribution which means the tabular value in the Z-table will be used as critical or tabular value.
With this, the decision rule can be one of the following possibilities:

1. Reject the null hypothesis (Ho) if ZC < -Zα. Otherwise, we fail to reject Ho.
2. Reject the null hypothesis (Ho) if ZC > Zα. Otherwise, we fail to reject Ho.
3. Reject the null hypothesis (Ho) if |ZC|> Zα/2. Otherwise, we fail to reject Ho.

For the problem, the first is the appropriate decision rule. Suppose the level of significance (α) is set at 0.05, then
the decision rule for the problem could be stated as ‘Reject Ho if ZC < -Z0.05 = - 1.645. Otherwise, we fail to reject
Ho.” Note that this test procedure is referred to as “one-tail Z-test for the population mean when the population
variance is known’ and the rejection region is illustrated as follows:

• The third step is to compute for the value of the test statistic using a random sample of observations gathered
or collected for the purpose of the test of hypothesis. Suppose from a simple random sample of 16 students, a
sample mean of Php19,750 was obtained. Further, the variable of interest, which is the tuition fee in the
university, is said to be normally distributed with an assumed population variance equal to Php160,000. Hence,
the computed test statistic is

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Test on Population Mean

• With the computed value of the test statistic equal to -2.50, the next step is to use the decision rule to make a
decision and this is to reject Ho.

• Lastly, as a consequence of the decision, conclusions are made which are in relation to the purpose of the test
of hypothesis. With the rejection of the null hypothesis, the father can then say that the average tuition fee in
the university where he wants his daughter to study is less than Php20,000.

To summarize the lesson:

PRACTICE SKILLS

1. Using the problem in the assessment of the previous lesson, perform the test of hypothesis on the statistician
who wants to test the claim of Brain Philippines. The random sample of 30 graduates he obtains recorded a
mean score of 560 in GRE.

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REFERENCES

Richardson, M, Using Dice to Introduce Sampling Distributions. STatistics Education Web (STEW). Retrieved from
http://www.amstat.org/education/stew/pdfs/UsingDicetoIntroduceSamplingDistributio ns.doc

De Veau, R. D., Velleman, P. F., and Bock, D. E. (2006). Intro Stats. Pearson Ed. Inc.

Workbooks in Statistics 1: 11th Edition. Institute of Statistics, UP Los Baños, College Laguna 4031

Probability and statistics: Module 24. (2013). Australian Mathematical Sciences Institute and Education Services
Australia. Retrieved from http://www.amsi.org.au/ESA_Senior_Years/PDF/InferenceProp4g.pdf

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