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Unformatted text preview: the critical value that satisfies: P(t ( n − 1 ) > t c ) = α The critical value can be found from the Appendix Table for the t‐distribution using (n–1) degrees of freedom. That is, the null hypothesis is rejected for t‐test statistic values that are suitably large negative numbers. A p‐value for the test, that gives the smallest significance level at which the null hypothesis can be rejected, is calculated as: p‐value = P(t ( n − 1 ) < t ) ↑ calculated ttest statistic
Note that the calculation of the p‐value uses the probability from the t‐distribution with (n–1) degrees of freedom that is the area under the probability density function to the left of the t‐test statistic. For a negative test statistic this will be the lower tail probability. The null hypothesis is rejected if: 15 p‐value < α Chapter 10 Example: Exercise 10.23, page 352 of the textbook A company selling licenses for a franchise operation claims that, in the first year, the yield on an init...
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This note was uploaded on 02/06/2014 for the course ECON ECON 325 taught by Professor Whistler during the Spring '10 term at The University of British Columbia.
 Spring '10
 WHISTLER

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