Understanding Business Statistics

CHAPTER 10

Hypothesis Tests for Proportions, Mean Differences and Proportion Differences

LEARNING OBJECTIVES

After completing the chapter, you should be able to

1. Conduct a proper hypothesis test for a population proportion.
2. Conduct a proper hypothesis test for the difference between two population means.
3. Conduct a proper hypothesis test for the difference between two population proportions.
4. Conduct a proper hypothesis test for the difference between two population means for matched samples.

EVERYDAY STATISTICS

Smell Test

Can an event be both important and insignificant? Are there events that are significant but not worthy of attention? In the wild and wonderful world of statistics, the answer to both questions is an emphatic yes. When talking about statistical significance, “significant” and “important” are not the same thing. That's why not every statistically significant finding is important, and not every important finding is statistically significant.

Take an example from the drug industry. In 1999, Matrixx Initiatives introduced Zicam, an over-the-counter cold remedy. Soon after the nasal spray was introduced, users began to report side effects, the most notable of which was anosmia—the loss of one's sense of smell. Over the next 10 years, the Food and Drug Administration ...