9696 thepvalueforthetestis10969600304 10 chapter 10

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Unformatted text preview: Chapter 10 A question that arises from the above example is: What is the smallest significance level at which the null hypothesis H0 can be rejected ? For the example, this must be something more than 0.01 (since the null hypothesis was not rejected at this level) but less than 0.05 (since the null hypothesis was rejected at this level). The answer is found as: calculated test statistic ↓ P(Z > 1.875) = 1 − P(Z < 1.875) = 1 − F(1.875) = 1 − 0.9693 look ‐ up in Appendix Table 1 = 0.03 This probability is called the p‐value of the test. 9 Chapter 10 For the example, the calculation of the p‐value of the test can be illustrated with a graph. X − a X − 80 = σ σ n n f(z) PDF of p-value = 0.03 0 z=1.875 z With Microsoft Excel the p‐value is calculated by selecting Insert Function NORMSDIST(1.875) This returns the probability 0.9696. The p‐value for the test is 1 – 0.9696 = 0.0304. 10 Chapter 10 The p‐value gives useful information. For a hypothesis testing application, the computer software can be used to: • calculate summary statistics for the data...
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