What is the significance of testing

The equal variance t-test is used when the number of samples in each group is the same, or the variance of the two data sets is similar. The following formula is used for calculating t-value and degrees of freedom for equal variance t-test:.

The unequal variance t-test is used when the number of samples in each group is different, and the variance of the two data sets is also different.

This test is also called the Welch's t-test. The following formula is used for calculating t-value and degrees of freedom for an unequal variance t-test:. The following flowchart can be used to determine which t-test should be used based on the characteristics of the sample sets. The key items to be considered include whether the sample records are similar, the number of data records in each sample set, and the variance of each sample set.

Assume that we are taking a diagonal measurement of paintings received in an art gallery. One group of samples includes 10 paintings, while the other includes 20 paintings. The data sets, with the corresponding mean and variance values, are as follows:. Though the mean of Set 2 is higher than that of Set 1, we cannot conclude that the population corresponding to Set 2 has a higher mean than the population corresponding to Set 1.

Is the difference from We establish the problem by assuming the null hypothesis that the mean is the same between the two sample sets and conduct a t-test to test if the hypothesis is plausible. The t-value is Since the minus sign can be ignored when comparing the two t-values, the computed value is 2. The degrees of freedom value is One can specify a level of probability alpha level, level of significance, p as a criterion for acceptance. Comparing this value against the computed value of 2.

Therefore, it is safe to reject the null hypothesis that there is no difference between means. The population set has intrinsic differences, and they are not by chance. Financial Ratios. Tools for Fundamental Analysis.

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I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Fundamental Analysis Tools for Fundamental Analysis. Table of Contents Expand. What Is a T-Test? Explaining the T-Test. Ambiguous Test Results. T-Test Assumptions.

Calculating T-Tests. Correlated or Paired T-Test. Equal Variance Pooled T-Test. With your report of interest selected, click the Significance Test tab.

You first need to decide the variable you want to test and the criterion by which you want to test the variable. For example, you can look across years or across jurisdictions for a variable. You can look across the values within a variable — such as "male" and "female" within "gender. Between Jurisdictions. From Preview, you can Edit make a different choice of Jurisdiction, Variable, etc.

To get a map of the U. If you want to change the focal jurisdiction, click on your choice. Select the statistic from the drop-down menu, and when you have the map you want, click Done. Type 1 errors Opens a modal. Introduction to power in significance tests Opens a modal.

Examples thinking about power in significance tests Opens a modal. Consequences of errors and significance Opens a modal. Error probabilities and power Get 3 of 4 questions to level up! Tests about a population proportion. Constructing hypotheses for a significance test about a proportion Opens a modal. Conditions for a z test about a proportion Opens a modal. Reference: Conditions for inference on a proportion Opens a modal.

Calculating a z statistic in a test about a proportion Opens a modal. Calculating a P-value given a z statistic Opens a modal. Making conclusions in a test about a proportion Opens a modal. Practice Writing hypotheses for a test about a proportion Get 3 of 4 questions to level up! Conditions for a z test about a proportion Get 3 of 4 questions to level up! Calculating the test statistic in a z test for a proportion Get 3 of 4 questions to level up!

Calculating the P-value in a z test for a proportion Get 3 of 4 questions to level up! Making conclusions in a z test for a proportion Get 3 of 4 questions to level up! Tests about a population mean. Writing hypotheses for a significance test about a mean Opens a modal.