Transcript Chapter 20

Chapter 17
Hypothesis
Testing
McGraw-Hill/Irwin
Business Research Methods, 10e
Copyright © 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved.
17-2
PulsePoint: Research Revelation
96
The percent of U.S. college students
interviewed at 375 universities in
2006 who misidentified the country of
origin of products made in Finland
(Nokia).
17-3
Hypothesis Testing
Inductive
Reasoning
Deductive
Reasoning
17-4
Statistical Procedures
Inferential
Statistics
Descriptive
Statistics
17-5
Hypothesis Testing
and the Research Process
17-6
Types of Hypotheses
• Null
– H0:  = 50 mpg
– H0:  < 50 mpg
– H0:  > 50 mpg
• Alternate
– HA:  = 50 mpg
– HA:  > 50 mpg
– HA:  < 50 mpg
17-7
Two-Tailed Test of Significance
17-8
One-Tailed Test of Significance
17-9
Decision Rule
Take no corrective action if the
analysis shows that one cannot
reject the null hypothesis.
17-10
Statistical Decisions
17-11
Probability of Making a Type I Error
17-12
Exhibit 17-4 Probability of Making A Type
I Error
17-13
Factors Affecting Probability of
Committing a  Error
True value of parameter
Alpha level selected
One or two-tailed test used
Sample standard deviation
Sample size
17-14
Probability of Making A Type II Error
17-15
Statistical Testing Procedures
State null
hypothesis
Interpret the
test
Stages
Obtain critical
test value
Choose
statistical test
Select level of
significance
Compute
difference
value
17-16
Tests of Significance
Parametric
Nonparametric
17-17
Assumptions for Using Parametric Tests
Independent observations
Normal distribution
Equal variances
Interval or ratio scales
17-18
Advantages of Nonparametric Tests
Easy to understand and use
Usable with nominal data
Appropriate for ordinal data
Appropriate for non-normal
population distributions
17-19
How to Select a Test
How many samples are involved?
If two or more samples are involved,
are the individual cases independent or related?
Is the measurement scale
nominal, ordinal, interval, or ratio?