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Unformatted text preview: Stat 104: Quantitative Methods for Economists Class 22: Hypothesis Testing Part I (verbage) 1 Hypothesis Testing (intro) We have discussed two methods of making inference on parameters in a population based on a random sample ( in English, how do we figure out the true mean or proportion) Point estimates give us a single guess 2 Confidence intervals give us a region. Alternatively, we might be interested in using the information in a sample to test hypothesis about parameters in the population. A hypothesis (or claim) is simply a belief (usually based on some relevant information). Some examples of a hypothesis might be: What is a hypothesis ? 3 Assigning weekly homework in a statistics class increases scores on course exams. Taking ColdEeze reduces the time of your cold The Atkins diet is better than the South Beach diet. b A company that has a 10% market share launches a marketing campaign. At the end of the campaign period the company conducts a survey in order to assess whether its market share has increased. Business Examples 4 b A bottling machine is set to automatically fill each bottle with 355 ml. of soft drink. To check whether the machine needs to be readjusted, a quality control inspector examines a random sample of newly filled bottles. Recap : Confidence Intervals s Allow us to use sample data to estimate a population value, like the true mean or the true proportion, and then put bounds on our estimate. 5 s Example: Give a 95% confidence interval for the true average amount students spend weekly on alcohol. Recap : Hypothesis Testing s Allows us to use sample data to test a claim about a population, such as testing whether a population proportion or population mean equals ome number. 6 some number. s Example: Is the true average amount that students spent weekly on alcohol $20? Parameter Identification s Hypothesis tests can be carried out on all the population parameters (the Greeks), such as the population median or variance. 7 s But in this section, we will conduct tests of hypothesis only regarding the population mean or the population proportion p . Parameter Identification (cont) s In the Market Share example: A company that has a 10% market share launches a marketing campaign. At the end of the campaign period the company conducts a survey in order to assess whether its market share has increased 8 The parameter of interest may be defined as p = the true proportion of customers who would purchase the company's products at the conclusion of the marketing campaign. Parameter Identification (cont) s In the Bottling Machine example: A bottling machine is set to automatically fill each bottle with 355 ml. of soft drink. To check whether the machine needs to be readjusted, a quality control inspector examines a random sample of newly filled bottles....
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This note was uploaded on 03/27/2012 for the course STATS 104 taught by Professor Michaelparzen during the Fall '11 term at Harvard.
 Fall '11
 MichaelParzen

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