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Estimation and Hypothesis

Here are the steps to solve this problem: 1) Calculate Zs1 and Zs2 for the two samples: Zs1 = 1.1513 * log(1+0.45/1-0.45) = 0.6276 Zs2 = 1.1513 * log(1+0.38/1-0.38) = 0.5051 2) Calculate the standard error: SE = sqrt(1/45-3 + 1/39-3) = 0.1134 3) Calculate the significant ratio: SR = (Zs1 - Zs2)/SE = (0.6276 - 0.5051)/0

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250 views32 pages

Estimation and Hypothesis

Here are the steps to solve this problem: 1) Calculate Zs1 and Zs2 for the two samples: Zs1 = 1.1513 * log(1+0.45/1-0.45) = 0.6276 Zs2 = 1.1513 * log(1+0.38/1-0.38) = 0.5051 2) Calculate the standard error: SE = sqrt(1/45-3 + 1/39-3) = 0.1134 3) Calculate the significant ratio: SR = (Zs1 - Zs2)/SE = (0.6276 - 0.5051)/0

Uploaded by

Atul Kashyap
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Estimation Theory

and
Hypothesis Testing
Statistical Inference
The statistical inference is the process of
arriving at conclusions concerning the
parameters of population on the basis of
information contained in the sample selected
from that population.
Statistical Inference treats two different kind of
conclusions / problems.
Estimation
Hypothesis Testing
Estimation

To provide the ‘best possible’ evaluation of


unknown parameters occurring in the population
on the basis of a finite number of observations (i.
e. A random sample obtained from a population)
is known as estimation. The population parameters
are estimated with the help of sample statistics.
There are two methods of estimation.
1. Point estimation
2. Internal Estimation
Point estimation

A point estimation is a single number that


is used to estimate an unknown population
parameter and the process of finding a
point estimation is known as point
estimation.
Internal Estimation

The process of making the statement

P[b1<= θ<=b2] = δ

i.e. , the two values b1 and b2 (based on sample


values ) will contain the true value of parameter
θ in its interior with a given probability δ, δ<1
where δ is any arbitrary positive number, is
called internal estimation
Standard Error of proportion

S.E.= PQ
n
Where P is the probability and Q = 1-P
n = sample size
Hypothesis Testing

Any assumption regarding the form of the


probability distribution or values of unknown
parameters of that distribution is called
statistical hypothesis.

To test a statistical hypothesis on the basis of a


sample is known as hypothesis testing.
Formulation of hypothesis

Hypothesis which is tested for possible rejection under the


assumption that it is true is known as Null Hypothesis and is
denoted as H0 .

In fact , the null Hypothesis is the basis for the deduction of


the theoretical distribution either of population or of statistic.

The hypothesis which differs from a given null hypothesis and


is accepted (or rejected) when H0 is rejected (or accepted) is
called Alternative Hypothesis and is denoted as H1.
CENTRAL LIMIT THEOREM

• specifies a theoretical distribution


• formulated by the selection of all possible
random samples of a fixed size n
• a sample mean is calculated for each
sample and the distribution of sample
means is considered
SAMPLING DISTRIBUTION OF THE MEAN

• The mean of the sample means is equal to


the mean of the population from which the
samples were drawn.
• The variance of the distribution is s divided
by the square root of n. (the standard
error.)
STANDARD ERROR
Standard Deviation of the Sampling Distribution
of Means

sx = /s/ \/n
How Large is Large?
• If the sample is normal, then the sampling
distribution of x will also be normal, no
matter what the sample size.
• When the sample population is approximately
symmetric, the distribution becomes
approximately normal for relatively small values of
n.
• When the sample population is skewed, the sample
x
size must be at least 30 before the sampling
distribution of becomes approximately normal
EXAMPLE
A certain brand of tires has a mean life of 25,000
miles with a standard deviation of 1600 miles.
What is the probability that the mean life of 64
tires is less than 24,600 miles?
Example continued

The sampling distribution of the means has a


mean of 25,000 miles (the population mean)
m = 25000 mi.

and a standard deviation (i.e.. standard error)


of:
1600/8 = 200
Example continued

Convert 24,600 mi. to a z-score and use the normal


table to determine the required probability.

z = (24600-25000)/200 = -2
P(z< -2) = 0.0228

or 2.28% of the sample means will be less than


24,600 mi.
CONFIDENCE INTERVAL ESTIMATES for
LARGE SAMPLES
• The sample has been randomly selected
• The population standard deviation is
known or the sample size is at least 25.
Confidence Interval Estimate of the
Population Mean

s  s
Xz    Xz
n n

-
X: sample mean
s: sample standard deviation
n: sample size
EXAMPLE
Estimate, with 95% confidence, the lifetime
of nine volt batteries using a randomly
selected sample where:
--
X = 49 hours
s = 4 hours
n = 36
EXAMPLE continued

Lower Limit: 49 - (1.96)(4/6)


49 - (1.3) = 47.7 hrs

Upper Limit: 49 + (1.96)(4/6)


49 + (1.3) = 50.3 hrs

We are 95% confident that the mean lifetime of


the population of batteries is between 47.7 and
50.3 hours.
t-test

T =x- μ
s/Sqrt(n)
If the calculated value of t is equal or less than the
tabulated value, the null hypothesis is accepted>
Exercise
The average breaking strength of steel rod is specified
to be 18.5 Thousand kg. For this a sample of 14 rods
was tested . The mean and standard deviation is 17.85
and 1.9555 respectively. Test the significance of the
deviation.
Exercise

An automobile tyre manufacturer claims that the verage life


of a particular grade of tyre is more than 20,000 km. when
used under normal conditions. A random sample of 16 tyre
was tested and a mean and standard deviation of about
22000 km and 5000 km respectively was computed. Check
claim.
Fisher’s Z-Test

Prof. Ronald Fisher developed a technique for testing the


significance of correlation coefficient in small samples.
Z is applied for solving the following issues:
1. Whether the difference between observed value of r and
some hypothetical value (value of population) of r is
significant or not?
2. Whether the difference between coefficient of correlation
of two samples is significant or not?
Fisher’s Z-Test (contd…)

Zs = 1 log e 1 + r
2 1-r
Zs = 1.1513 log10 1 + r
Zs is Observed Value 1-r
Fisher’s Z-Test (contd…)

Z ρ= 1 log e 1 + r
2 1-r
Z ρ = 1.1513 log10 1 + r
Zρ is Hypothetical value 1-r
Standard Error

S.E. = 1
(n-3)
Determination of Significant Ratio

Significant Ratio = Zs – Zρ
S.E.
Interpretation:
If SR >2.58 is considered significant at 1% level
of significance.
If SR >1.96 difference is considered significant
at 5% level of confidence
If SR > 3 the difference is considered significant
definitely
Test of Significance between two samples

S.E = 1 + 1
n1-3 n2-3
Exercise
A correlation coefficient of 0.72 is obtained from a sample of
29 paired observations. Is the coefficient significantly
different from 0.8?
Exercise
Two groups of students are given an intelligence test
(x) and arithmetic test (y) and the following results are
obtained. N1=45, n2=39, r1=0.45, r2=0.38. is the
difference between the value of r significant?

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