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Probability (Sampling)

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Probability (Sampling)

Uploaded by

roannicolesibya21
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© © All Rights Reserved
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CHAPTER 9

2 Types of Inferences (about a population using a random sample)


∙ Estimate the value of the parameter
∙ Make decisions concerning the value of the parameter (hypothesis testing)
These methods are actually 2 sides of the same coin: they are equivalent Goal:
Test a claim about the population
Example:
Rosie is an older sheep dog in Montawa who gets regular check ups from her
veterinarian owner. Let X= random variable representing Rosie’s resting heart rate (beats per
minute). The vet knows that X is normally distributed with σ=12 The vet checked the Merck
Veterinary Manual and found that this breed of dog has μ=115 bpm. For 6 weeks, Rosie’s
resting heart rate was taken and x
=105.0
̅ Test the claim that Rosie’s average resting heart rate is
less than 115 bpm, at a 95% confidence level
Review Exercise:
Let x be a random variable representing the dividend yield of Australian bank stocks. We
may assume x has a normal distribution with σ=2.4% A random sample of 10 Australian bank
stocks have a sample mean of x
=5.38%.
̅ For the entire Australian stock market, the mean
dividend yield is μ=4.7%. Do these data indicate that the dividend yield of all Australian banks
is higher than 4.7%? use alpha=0.1
a. What is the level of significance? Will you use a left-trailed, right-trailed, or two
tailed test? Write the hypothesis statement.
Answer: alpha = 0.1; right trailed
b. Check the requirements: what sampling distribution will you use? Explain the
rationale for your choice of sampling distribution, compute the value of the

statistics
c. Find or estimate the p-value. Sketch the sampling distribution and show the area
corresponding to the p-value
d. Based on your answers in part (a) to (c), what is your decision?
e. Interpret your conclusion in the context of application
In real life situations, we rarely know the true population, standard deviation, so we
have to use the sampling standard deviation, s. When we use s, then we need to use
the t-statistic and the t-table

Example:
Let x be a random variable representing the dividend yield of Australian
bank stocks. We may assume x has a normal distribution. A random sample of 10
Australian bank stocks have a sample mean of x
=5.38%
̅ and sample standard
deviation s=2.4%. For the entire Australian stock market, the mean dividend yield is
μ=4.7%. Do these data indicate that the dividend yield of all Australian banks is
higher than 4.7? Use alpha=.01
a. What is the level of significance? Will you use a left-trailed, right-trailed, or two-tailed
test? Write the hypothesis statement.
Answer: alpha = 0.1; right trailed
b. Check the requirements: what sampling distribution will you use? Explain the rationale
for your choice of sampling distribution, compute the value of the statistics c. Find or
estimate the p-value. Sketch the sampling distribution and show the area corresponding to
the p-value
d. Based on your answers in part (a) to (c), what is your decision?
e. Interpret your conclusion in the context of application
Example:
Bill Alther is a zoologist who studies Anna’s humming bird (Calypte Anna) Suppose that in a
were caught,
remote part of the Grand Canyon, a random sample of 6 (n=6) of these birds
weighed, and released. The sample mean is x
=3.75grams.
̅ Let x be a random variable
representing the weights of Anna’s hummingbirds in this part of Grand Canyon. We assume that
x has a normal distribution. The sample has s=0.70 grams. It is known that the mean with of all
Anna’s hummingbird is μ=4.55 grams. Do the data indicate the mean weight of these birds in
this part of the Grand Canyon is less than 4.55grams? Use alpha=0.01
We used p-value method when testing hypotheses. This is fine when we have a computer
program handy or we know sigma and can use the z-table. We found out last time that it is not
as easy to use the p-value method with the t-table. The situation is to introduce a slightly
different method called the critical value method for testing hypotheses.
Note: you always get the same decision/conclusion with either method. There are two
ways to get to the exact same answer.

Example:
Avalanches can be a real problem for travelers in the western US and Canada. A common type
of Avalanches is the slab avalanche. Slab avalanches studied in Canada have an average
region.
thickness of μ=67cm. the ski patrol at Vail, Colorado is studying slab avalanches in its
A random sample of 16 slab avalanches has a sample mean x
=61.8
̅ and a sample standard
deviation of s=10.6cm. Assume that the distribution of slab avalanche is approximately
normally distributed. Use a 1% significance level to test the claim that the mean slab thickness
in Vail, Colorado is different than in Canada.

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