Chapter5
TwoSided Hypothesis concerning B(1):
Follows three steps
1)
Compute the standard error of Y, SE(Y), which is an estimator of the standard deviation of the
sampling distribution of Y.
2)
To compute the tstatistic, which has the general form given in hey concept 5.1, applied here,
the tstatisic is t= (Y – u yo)/ SE (Y)
3)
Compute the p – value., which is the smallest significant level at which the null hypothesis
could be rejected based on the test statistic actually observe.
For a null hypothesis to be correct. Tstatistic has a standard normal distribution in large
samples under the null hypothesis
The pvalue for a two sided hypothesis testis 2 phi sign ( absolute vakue of t) wjere t act is
the value of the t stat actually computed .
The third step can be replaced by simply comparing the tstatistic to the critical value
appropriate for the test with the desired significant level.
For example, if the 5% significant level would reject the nul hypothesis if t act > 1.96. In
this case, the population mean is said to be statistically significantly different than the
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
This is the end of the preview.
Sign up
to
access the rest of the document.
 Spring '11
 sani
 Economics, Statistics, Normal Distribution, Standard Deviation, Standard Error, Null hypothesis, Statistical hypothesis testing

Click to edit the document details