8/9/2019 Business Research Methods Chapter 16

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PROF.S.N.MURTHY & DR.BHOJANNA

BUSINESS RESEARCH METHODS

16

Chapter

Excel Books

Hypothesis Testing

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Hypothesis Testing

Meaning of hypothesis:Hypothesis aretentativepropositions, relatingto certainphenomenon, which

theresearcherwantstoverify.

Steps Involved in Hypothesis Testing: Formulatethehypothesis

Significance Level

Onetailed andtwotailedtest

Degreeoffreedom Selecttest criteria

Compute

Makedecisions

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Hypothesis Testing

Errors in hypothesis testing:

There aretwotypesoferrors

Hypothesisisrejected whenitistrue, is called Typed 1 error()

Hypothesisisnotrejected whenitisfalse, is called Type 2 error().

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Hypothesis Testing

Univariate Analysis: Ifwe wishto analyzeonevariable at a time, thisis calledunivariate

analysis.

Bivariate Analysis:

Therelationshipoftwovariables at a timeisexamined bymeansofbivariatedata analysis.

Types of tests:1. Parametric test

2. Non-parametric test

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Hypothesis Testing

Types of Parametric tests

Z test: Whensamplesizeis > 30

T-test: Whenthesamplesizen

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Hypothesis Testing

Types of Non-Parametric tests

1. Chi-square test:

Sampleobservationshould beindependent. i.e. 2 individualitems

should beincludedtwicein a sample.

Sampleshould contain atleast 50 observationsOr

Totalfrequencyshould begreaterthan 50.

Thereshould be a minimumof5 observationsin any cell. Thisis called

cellfrequency constraint.

ApplicationofSPSS

Refer text book for illustrations and SPSS application

2. Cox and Stuart test:

Thistestisusedtoexaminethepresenceoftrends

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Hypothesis Testing

3. Mann Whitney U test:

Thisisusedtodetermine whethertwoindependentsampleshave

beendrawnfromsamepopulation. Suppose anexperimenthas

obtainedtwosetsofsamplesfromtwopopulations andthestudy

wishestoexamine whetherthetwopopulation areidentical?

4. Rank sum test: (Kruskal -Wallis test):

Kruskal-Wallistestisused, whenmorethantwopopulations are

involved.

ApplicationofSPSS

Refer text book for illustrations and SPSS application

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Hypothesis Testing

5. Rank correlation test:

Usedtofindoutthe correlation between 2 setsofranks

6. Kolmogorov-smirmov test:

Thisisusedforexaminingthegoodnessoffit betweenobserved

samples andexpectedfrequencydistributionofdata whenthe

variableisinordinalscale.

7. Sign-test:

Signtestisused withmatchedpairs. Thetestisusedtoidentifythe

pairs anddecide whetherthepairhasmoreorlessofsomecharacteristics.

Refer text book for illustrations

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Hypothesis Testing

Advantages of non-parametric test over parametric test

They arequick andeasytouse

Whendata arenotvery accurate, thesetestsgivefairlygoodresults

Disadvantages of non-parametric test:

Non-parametric testinvolvesgreaterrisk ofaccepting a falsehypothesis

andthus committing a Type 2 error.