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Chapter 17

Business Research
Methods
Donald Cooper
Pamela Schindler
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Chapter 17
Hypothesis Testing

Irwin/McGraw-Hill

The McGraw-Hill Companies, Inc.,

Approaches to
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Hypothesis Testing
Slide 17 - 1

Classical Statistics
sampling-theory approach
objective view of probability
decision making rests on analysis of available
sampling data

Bayesian Statistics
extension of classical statistics
consider all other available information
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Hypotheses
Slide 17 - 2

Null
that no statistically significant difference
exists between the parameter and the statistic
being compared

Alternative
logical opposite of the null hypothesis
that a statistically significant difference does
exist between the parameter and the statistic
being compared.
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Logic
Slide 17 - 3

Two tailed test


nondirectional test
considers two possibilities

One tailed test


directional test
places entire probability of an unlikely
outcome to the tail specified by the alternative
hypothesis
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Decision
Testing
Slide 17 - 4

Type I error
a true null hypothesis is rejected

Type II error
one fails to reject a false null hypothesis

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Testing for Statistical


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Significance
Slide 17 - 5

State the null hypothesis


Choose the statistical test
Select the desired level of significance
Compute the calculated difference
value
Obtain the critical value
Interpret the test
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Classes
of Significance
Tests
Slide 17 - 6

Parametric tests
Z or t test is used to determine the statistical
significance between a sample distribution
mean and a population parameter

Assumptions:
independent observations
normal distributions
populations have equal variances
at least interval data measurement scale
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Classes
of Significance
Tests
Slide 17 - 7

Nonparametric tests
Chi-square test is used for situations in which a
test for differences between samples is required

Assumptions
independent observations for some tests only
normal distribution not necessary
homogeneity of variance not necessary
appropriate for nominal and ordinal data, may be used
for interval or ratio data

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How
Nulltitle
Hypothesis
Slide 17 - 8

Analysis of variance (ANOVA)


the statistical method for testing the null
hypothesis that means of several
populations are equal

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Multiple
Tests
Slide 17 - 9

Multiple comparison procedures


test the difference between each pair of means
and indicate significantly different group
means at a specified alpha level (<.05)
use group means and incorporate the MSerror
term of the F ratio

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a Test
Slide 17 - 10

Which does the test involve? one sample,


two samples
k samples
If two or k samples,are the individual cases
independent or related?
Is the measurement scale nominal, ordinal,
interval, or ratio?
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K Related
Samples
Slide 17 - 11

Use when:
The grouping factor has more than two levels
Observations or subjects are
matched . . . or
the same subject is measured more than once

Interval or ratio data

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