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Week 6 Hypothesis Testing Proportions 1-Sample

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Jimmy Beam
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8 views

Week 6 Hypothesis Testing Proportions 1-Sample

Uploaded by

Jimmy Beam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Hypothesis Testing is a decision-making process called a Test of Significance.

There are 4 unique parts to Hypothesis Testing.


1) The Hypothesis Scenario. This includes the Null and Alternative scenarios.
a. Ho: Null Hypothesis
Ha or H1: Alternative Hypothesis
2) Z- Test Statistic
𝑝̂−𝑝0
Z- Test Stat =
𝑝 ∗𝑞
(√ 0 0)
𝑛

Where “𝑝0 ” is the hypothesized value and 𝑞0 = 1 − 𝑝0 .


3) P- value. The p-value tells you if something will be significant or not and if
you can Accept or Reject the claim. You will use the p-value to draw a
conclusion regarding the hypothesis test.
a. We will use =NORM.S.DIST function to find the p-value. It should
look familiar from Week 4.
4) Conclusion:
a. If the p-value is less than alpha (< α) then Reject Ho/Accept Ha.
b. If the p-value is greater than alpha (> α) then We Do Not Reject Ho.
c. The most common alpha value is .05. If no, alpha value is given it will
default to .05 but do note that alpha can also be, .10, .01, and .005 to
name a few. Essentially alpha can be any value the statistician
deems fit, but the most common values are .05, .01 and .10.
One last thing before we get to an example. There are 3 different scenarios that
are associated with the Hypothesis Scenario.
1) There is a Lower tailed (one tailed) Test or a Left Tailed Test. If the problem
asks if there a significant decrease or less than or lower than or fewer than,
then the problem is a lower tailed test. The “<” sign corresponds with the
Ha. The hypothesis scenario will look like:

a. Ho: 𝑝̂ = 𝑝0
Ha: 𝑝̂ < 𝑝0

(Here we see that “𝑝0 ” is the hypothesized value and the Less
Than Sign “<” lines up with the Ha)
2) There is an Upper tailed (one tailed) Test or a Right Tailed Test. If the
problem asks is there a significant increase or more than or greater than or
higher than, then the problem is an upper tailed test. The “>” sign
corresponds with the Ha. The hypothesis scenario will look like:
a. Ho: 𝑝̂ = 𝑝0
Ha: 𝑝̂ > 𝑝0

(Here we see that “𝑝0 ” is the hypothesized value and the


Greater Than Sign “>” lines up with the Ha)
3) There is a Two tailed Test. If the problem asks is there a significant
difference or statistical evidence or asks if it is not the same, then the
problem is a two-tailed test. The “≠” sign corresponds with the Ha. The
hypothesis scenario will look like:
a. Ho: 𝑝̂ = 𝑝0
Ha: 𝑝̂ ≠ 𝑝0

(Here we see that “𝑝0 ” is the hypothesized value and the


Greater Than Sign “≠” lines up with the Ha)
The hypothesized value is what we think should happen or what has been found
to be true in the past.
Now let’s continue to look at our car price data from Week 3. In Week 3, I asked
you to calculate the average and then find how many data points fell below the
average. We called this value p and then we found q. If we look back at my data
set, we see that p = .70 and q = .30.
We will call this 𝑝̂ = .70 and 𝑞̂ = .30.
We want to run a test to see how close our data set is to a 50/50 spread? 50% of
the data would fall above the mean and 50% of the data would fall below the
mean, in a perfect world.
In other words, is there a difference between your data set and 50%? We will
calculate a 95% hypothesis to test this claim.
(Note: YES! I realize that some of you did see in your Week 3 forum that you did
get p = .50 and q = .50. If this is the case, your Test Statistic will be 0 and the p-
value will come out to be 1. That is fine, BUT it is still a good idea to go through
this example and make sure you can run a hypothesis test to get the correct
results. Extra practice never hurt anyone.)
Getting back to our test, this tells us that the hypothesized value is .50. The
hypothesis scenario will look like this:

1) Ho: 𝑝̂ = .50
Ha: 𝑝̂ ≠ .50
𝑝̂−𝑝0 .70−.50
2) Z-Stat = = = 1.264911
̂ ∗𝑞
𝑝 ̂ .50∗.50
(√ ) (√
10
)
𝑛

Note: If your Z-Stat is negative that is fine. That does not mean the
problem is incorrect. And if your 𝑝̂ = .50, your Z-Stat would be 0 here
and that is fine also.

3) To find the p-value we will use the =NORM.S.DIST function. In Excel


type in =NORM.S.DIST(1.264911,TRUE) and hit Enter. We type in TRUE
because the hypothesis test is cumulative.
We see that the p-value = .897048. But remember this is in the Less Than form. If
we were running a Lower Tailed Test this would be our p-value. To find the p-
value for an Upper Tailed Test we would take p-value = 1 - .897048 = .102952.
Since we are running a Two Tailed Test, to get the correct p-value we would
multiply whichever p-value is smaller by 2. It will be different depending on the
test, so you need to make sure you use whichever one is smaller. Remember, p-
values CANNOT be greater than 1. If you get a p-value greater than 1, you did
something wrong.
p-value = .102952*2 = .205904. This is the p-value we will use for our conclusion.
If your Z-Stat is 0 then your p-value in this test will be 1. That is fine. Your p-value
can be 1 but it CANNOT be greater than 1.

4) Lastly, we need to state the conclusion. We will use alpha as .05. When
alpha is not stated it is defaulted to .05. .205904 > .05. The p-value is
greater than alpha. We DO NOT Reject Ho. Since we Do NOT Reject Ho,
this which means we CANNOT reject the claim that the distribution is
different from a 50/50 spread.

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