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Unformatted text preview: Click to edit Master subtitle style ECON1203/ECON2292 Business and Economic Statistics Week 8 22 Week 8 topics l Hypothesis testing l Type I & type II errors l Test about the mean when population variance is known l p-values l Key references l Keller 11, esp. 11.1-11.2 33 Basic inference problems l Estimation l Process of obtaining reliable information about population parameters l Could be point or interval estimates l Hypothesis testing l Does the data support a contention/belief/hypothesis about this parameter of interest? l Know from our estimation work that there can be no definitive answer to this type of question l Estimators are random variables l This process is potentially subject to incorrect conclusions 44 Hypothesis testing examples and concepts l The judicial system l Defendant is presumed innocent l Given evidence defendant is either found not guilty or guilty l Possible for these verdicts to be in error l Sometimes a guilty person goes free l Sometimes a miscarriage of justice innocent person jailed l Required proof? l Beyond reasonable doubt (criminal court) l On the balance of probabilities (civil court) Hypothesis testing examples and concepts l Concepts are similar in statistical inference when compared to those in the judicial system l Business example: Quality control at McDonalds l Quarter-pounder with cheese is presumed to comprise 0.25 pounds (0.11 kg) of precooked meat l Given data (sample of hamburgers) is McDonalds claim correct or not? l May conclude hamburgers do contain 0.25 pounds when in fact they dont or vice versa 55 66 Hypothesis testing examples and concepts l Maintained or null hypothesis l Some statement about a population parameter l Let X be weight of precooked meat with mean l Then null hypothesis is H 0: = 0.25 l Alternative hypothesis l Will depend on the research objective l Some possibilities here...
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This note was uploaded on 07/28/2011 for the course ECON 1203 taught by Professor Denzilgfiebig during the Three '11 term at University of New South Wales.

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Slides-08 - Click to edit Master subtitle style...

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