week04-3b

week04-3b - TA session 4 Econ. 103, winter 2010 Wed., Jan....

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: TA session 4 Econ. 103, winter 2010 Wed., Jan. 27, 2010, 10:00 a.m. and 1:00 p.m. in PP2400E. 3 The equivalence of three hypothesis tests Suppose we want to test the hypothesis H : μ = 1 against the two-sided alternative H 1 : μ 6 = 1 The sample mean ˆ μ = 1 n ∑ X i and sample variance ˆ s 2 = 1 n- 1 ∑ ( X i- ˆ μ ) 2 will be used to test this hypothesis. There are three tools available to test any hypothesis. These are the “t-test,” the “p-value” and the confidence interval. It is the mission of this sheet of paper to illustrate how they are equivalent. 3.1 Estimates Let’s say n = 30, ˆ μ = 1 . 2 and ˆ s 2 = 0 . 5. The question is whether the deviation of μ from our hypothesized value of “1” can be chalked up just to randomness. Such a judgment requires some statistical standard of “randomness.” 3.2 T ratio One standard is the t-ratio, which is a number that expresses the likelihood of drawing ˆ μ from a random variable distributed with mean of μ = 1 and whose standard deviation is estimated by ˆ s ....
View Full Document

This note was uploaded on 03/15/2010 for the course ECON 103 taught by Professor Sandrablack during the Winter '07 term at UCLA.

Page1 / 3

week04-3b - TA session 4 Econ. 103, winter 2010 Wed., Jan....

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online