Understanding Business Statistics

CHAPTER 9

Statistical Hypothesis Testing

HYPOTHESIS TESTS FOR A POPULATION MEAN

LEARNING OBJECTIVES

After completing the chapter, you should be able to

1. Describe the logic of statistical hypothesis testing and its relationship to interval estimation.
2. Discuss the standard null hypothesis forms.
3. Conduct a one-tailed hypothesis test for a population mean using both the critical value approach and the p-value approach.
4. Define Type I and Type II error in hypothesis testing.
5. Conduct a two-tailed hypothesis test for a population mean and describe the situations in which such a test would be appropriate.
6. Properly use the t distribution to conduct a statistical hypothesis test for a population mean.

EVERYDAY STATISTICS

Statistician's Brew

Mention “famous pairings” and you might think of baseball and hot dogs, chicken and dumplings, Brad and Angelina, or Paris and Rome. Thanks to William Gosset, you can now add statistics and beer to the list.

William Sealy Gosset was born in Canterbury, England. A gifted student, Gosset graduated from Oxford University in 1899 at the age of 23, with degrees in chemistry and mathematics. On graduation, he was promptly recruited by the Guinness Brewing Company, one of the world's largest brewers. Guinness saw Gosset's mathematics and chemistry training as well-suited to helping them produce a consistently high quality beer.

As expected, Gosset's background ...