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stat104_lecture22_v1_1up

# stat104_lecture22_v1_1up - Stat 104 Quantitative Methods...

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Stat 104: Quantitative Methods for Economists Class 22: Hypothesis Testing- Part I (verbage) 1

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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 Cold-Eeze reduces the time of your cold • The Atkins diet is better than the South Beach diet.

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boxshadowdwn 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 boxshadowdwn 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 square6 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 square6 Example: Give a 95% confidence interval for the true average amount students spend weekly on alcohol.

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Recap : Hypothesis Testing square6 Allows us to use sample data to test a claim about a population, such as testing whether a population proportion or population mean equals some number. 6 square6 Example: Is the true average amount that students spent weekly on alcohol \$20?
Parameter Identification square6 Hypothesis tests can be carried out on all the population parameters (the Greeks), such as the population median or variance. 7 square6 But in this section, we will conduct tests of hypothesis only regarding the population mean μ or the population proportion p .

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Parameter Identification (cont) square6 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) square6 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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