Two-tailed and one-tailed tests, Applied Statistics

Assignment Help:

If the test is two-tailed, H1:  μ ≠  μ0 then the test is called two-tailed test and in such a case the critical region lies in both the right and left tails of the sampling distribution of the test statistic, with total area equal to the level of significance as shown in diagram.

If the test is one-tailed either right-tailed or left-tailed), then the test is called a one-tailed test.

For example, to test whether the population mean   μ =  μ0  , we may have the Alternative Hypothesis H1 given by H1:  μ <  μ0 (Left-tailed) or H1:  μ > μ0  (Right-tailed). In this case, the test is a single-tailed or one-tailed test. In the right-tailed test where H1: 

μ >  μ0  , the critical region (or rejection region) z > zα lies entirely in the right tail of the sampling distribution of sample statistic with area equal to the level of significance a.  Similarly, in the left-tailed (H1:  μ < μ0  ), the critical region z < -  zα  lies entirely in the left tail of the sampling distribution of q with area equal to the level of significance α is shown.

Figure 

2342_one tailed and two tailed test.png

The type of the tests to be applied depends on the nature of the Alternative Hypothesis H1. We apply one-tailed or two-tailed test accordingly as Alternate Hypothesis is one-tailed or two-tailed.

Critical values of z for both two-tailed and one-tailed tests at 10%, 5% and 1% level of significance are given below.

Critical Values of Z

Level of significance (a)

10%

5%

1%

Critical values for Two-tailed tests

   850_one tailed and two tailed test1.png  1.64

   850_one tailed and two tailed test1.png  1.96

   850_one tailed and two tailed test1.png 2.58

Critical values for Left-tailed tests

-1.28

-1.64

-2.33

Critical values for Right-tailed tests

1.28

1.64

2.33

For large samples (n > 30), the sampling distributions of many statistics are approximately normal distribution. In such cases, we can use the results of the table given above to formulate decision rules. We will focus primarily on large samples.


Related Discussions:- Two-tailed and one-tailed tests

Option price binomial tree, Modify your formulas from (1) to compute the pr...

Modify your formulas from (1) to compute the price at time 0 of an American put option with the same contract speci cations in the binomial model. Report the price of the American

Write down the payoff matrix, Two individuals, player 1 and player 2, are  ...

Two individuals, player 1 and player 2, are  competing in an auction to obtain a valuable object. Each player bids in a sealed envelope, without knowing the bid of the other player

Population variance, Examining the Population Variance Business decisio...

Examining the Population Variance Business decision making does not limit itself to setting up the hypothesis to test for the equality of more than two means or proportions sim

Business statistics, Betting on sporting events is big business both in the...

Betting on sporting events is big business both in the US and abroad. Consider, for instance, next winter’s American football tournament known as the Superbowl. Billions of dollars

Inverse market demand, There are two types of drivers, high-risk drivers wi...

There are two types of drivers, high-risk drivers with an accident probability of 2=3 and low risk drivers with an accident probability of 1=3. In case of an accident the driver su

Regression lines, Regression Lines It has already been discussed that t...

Regression Lines It has already been discussed that there are two regression lines and they show mutual relationship between two variable . The regression line Yon X gives   th

Evaluate minimum capability requirement, You are currently working wit...

You are currently working with a supplier who is producing a shaft whose diameter specification is 6.00 ± .003 inches.  Currently, the process is yielding shafts wit

Principal components analysis, In the context of multivariate data analysis...

In the context of multivariate data analysis, one might be faced with a large number of v&iables that are correlated with each other, eventually acting as proxy of each other. This

the six conditions are equally likely, A medical researcher has 100 bone c...

A medical researcher has 100 bone cancer patients in a study. Every patient's condition is one of six types, type \A" to type \F". The 100 patients split as follows: x There

Enumerate the set, Grid is the set of pairs {1, 2, 3, 4} x {1, 2, 3, 4}. ...

Grid is the set of pairs {1, 2, 3, 4} x {1, 2, 3, 4}. Image is the power set of Grid. An element of Image is a subset of Grid and can be represented by a diagram on a 4 by 4

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd