Intro to Probability for Business

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One-Sample T-Test

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Intro to Probability for Business

Definition

A one-sample t-test is a statistical method used to determine if the mean of a single sample significantly differs from a known population mean. This test is especially useful when the sample size is small (typically less than 30) and the population standard deviation is unknown, making it crucial for situations where data is limited or hard to obtain.

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5 Must Know Facts For Your Next Test

  1. The one-sample t-test assumes that the data is approximately normally distributed, especially important for small samples.
  2. It calculates a t-statistic that measures the difference between the sample mean and the population mean relative to the sample's standard deviation.
  3. The degrees of freedom for a one-sample t-test is equal to the sample size minus one (n - 1).
  4. In hypothesis testing, you typically use a significance level (alpha) to determine whether to reject the null hypothesis, often set at 0.05.
  5. If the p-value obtained from the t-test is less than the significance level, it indicates strong evidence against the null hypothesis.

Review Questions

  • What are the assumptions that must be met for conducting a one-sample t-test, and why are they important?
    • For conducting a one-sample t-test, it's important that the sample is randomly selected, the data is approximately normally distributed, and the observations are independent. These assumptions ensure that the results of the test are valid and can be generalized to the population. Violating these assumptions may lead to inaccurate conclusions about whether there is a significant difference between the sample mean and the population mean.
  • How does a one-sample t-test differ from a one-sample z-test in terms of application and conditions?
    • A one-sample t-test differs from a one-sample z-test mainly in its application and underlying conditions. The t-test is used when the sample size is small (less than 30) and the population standard deviation is unknown, while the z-test applies when the sample size is large or when the population standard deviation is known. Additionally, because of its reliance on sample data for estimating variability, the t-distribution used in t-tests accounts for more uncertainty with smaller samples compared to z-tests.
  • Evaluate how changing your significance level (alpha) from 0.05 to 0.01 would affect your conclusions when using a one-sample t-test.
    • Changing your significance level from 0.05 to 0.01 increases the threshold for rejecting the null hypothesis, making it harder to find statistical significance. This means that even if there is an observable effect or difference between your sample mean and population mean, it may not be considered significant at this stricter alpha level unless there is strong evidence (i.e., a smaller p-value). As a result, you may fail to reject the null hypothesis more frequently with an alpha of 0.01 compared to 0.05, potentially leading to different interpretations of your data.
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