We have just discussed the rejection region approach

This preview shows 7 out of 11 pages.

We have just discussed the “rejection region” approach for decision making. There is another approach for decision making, it is “p-value” approach. *Definition: p-value – it is the probability that we observe a test statistic value that is as extreme, or more extreme, than the one we observed. Observed value of test statistic p-value p-value p-value (1) the area under N(0,1) pdf to the right of (2) the area under N(0,1) pdf to the left of (3) twice the area to the right of 7
Image of page 7

Subscribe to view the full document.

(1) (2) (3) 8
Image of page 8
The way we make conclusions is the same for all hypotheses. “We reject in f avor of iff p-value” Any population, the population variance is unknown However – the sample size is large 5. the “large sample” scenario Thm The Central Limit Theorem Let be a random sample from a population with mean and variance * When n is large enough , (approximately) – by CLT and Slutsky’s Theorem 9
Image of page 9

Subscribe to view the full document.

It is the pivotal quantity ( P.Q. ) for The derivation of the hypothesis tests (rejection region and the p-value) are almost the same as the derivation of the exact Z-test discussed above.
Image of page 10
Image of page 11
You've reached the end of this preview.
  • Fall '10
  • WeiZhu
  • Statistical hypothesis testing, significance level, OJ

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern