Intro to Business Statistics

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Z-statistic

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Intro to Business Statistics

Definition

The z-statistic is a standardized test statistic used to determine the probability of a sample statistic occurring under the assumption that the null hypothesis is true. It is commonly employed when comparing the means or proportions of two independent populations.

5 Must Know Facts For Your Next Test

  1. The z-statistic is used to determine if there is a significant difference between the proportions of two independent populations.
  2. The z-statistic follows a standard normal distribution, allowing for the calculation of p-values and the construction of confidence intervals.
  3. The formula for the z-statistic when comparing two independent population proportions is: $z = \frac{\hat{p}_1 - \hat{p}_2}{\sqrt{\frac{\hat{p}_1(1-\hat{p}_1)}{n_1} + \frac{\hat{p}_2(1-\hat{p}_2)}{n_2}}}$
  4. The null hypothesis for a z-test comparing two independent population proportions is that the two proportions are equal: $H_0: p_1 = p_2$.
  5. The alternative hypothesis can be two-tailed (p_1 ≠ p_2) or one-tailed (p_1 > p_2 or p_1 < p_2), depending on the research question.

Review Questions

  • Explain the purpose of the z-statistic in the context of comparing two independent population proportions.
    • The z-statistic is used to determine if there is a statistically significant difference between the proportions of two independent populations. It allows researchers to calculate the probability of observing a difference in sample proportions as extreme or more extreme than the one observed, under the assumption that the null hypothesis (the two population proportions are equal) is true. This enables researchers to make informed decisions about whether to reject or fail to reject the null hypothesis, and draw conclusions about the relationship between the two populations.
  • Describe the key components of the formula used to calculate the z-statistic when comparing two independent population proportions.
    • The formula for the z-statistic when comparing two independent population proportions is: $z = \frac{\hat{p}_1 - \hat{p}_2}{\sqrt{\frac{\hat{p}_1(1-\hat{p}_1)}{n_1} + \frac{\hat{p}_2(1-\hat{p}_2)}{n_2}}}$. The key components are: $\hat{p}_1$ and $\hat{p}_2$, which represent the sample proportions for the two populations; $n_1$ and $n_2$, which represent the sample sizes for the two populations; and the square root term, which accounts for the variability in the sample proportions. This formula allows researchers to standardize the difference between the two sample proportions, so that it can be compared to the standard normal distribution and a p-value can be calculated.
  • Analyze the role of the null and alternative hypotheses in a z-test comparing two independent population proportions, and explain how the choice of hypotheses can impact the interpretation of the results.
    • In a z-test comparing two independent population proportions, the null hypothesis is typically that the two population proportions are equal: $H_0: p_1 = p_2$. The alternative hypothesis can be two-tailed (p_1 ≠ p_2) or one-tailed (p_1 > p_2 or p_1 < p_2), depending on the research question. The choice of hypotheses can significantly impact the interpretation of the results. A two-tailed test examines whether there is any difference between the proportions, while a one-tailed test examines whether the proportion in one population is greater or less than the proportion in the other population. The p-value obtained from the z-test is then used to determine whether the null hypothesis should be rejected or not, and to draw conclusions about the relationship between the two populations. The choice of hypotheses should be guided by the research question and the expected direction of the relationship between the populations.
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