1. Section 10.1 Goodness of Fit © 2012 Pearson Education, Inc. All rights reserved. 1 of 91

2. Section 10.1 Objectives Use the chi-square distribution to test whether a frequency distribution fits a claimed distribution © 2012 Pearson Education, Inc. All rights reserved. 2 of 91

3. Multinomial Experiments Multinomial experiment A probability experiment consisting of a fixed number of trials in which there are more than two possible outcomes for each independent trial. A binomial experiment had only two possible outcomes. The probability for each outcome is fixed and each outcome is classified into categories. © 2012 Pearson Education, Inc. All rights reserved. 3 of 91

4. Multinomial Experiments Example: A radio station claims that the distribution of music preferences for listeners in the broadcast region is as shown below. Distribution of music Preferences Classical4%Oldies2% Country36%Pop18% Gospel11%Rock29% Each outcome is classified into categories. The probability for each possible outcome is fixed. © 2012 Pearson Education, Inc. All rights reserved. 4 of 91

5. Chi-Square Goodness-of-Fit Test Used to test whether a frequency distribution fits an expected distribution. The null hypothesis states that the frequency distribution fits the specified distribution. The alternative hypothesis states that the frequency distribution does not fit the specified distribution. © 2012 Pearson Education, Inc. All rights reserved. 5 of 91

6. Chi-Square Goodness-of-Fit Test Example: To test the radio station’s claim, the executive can perform a chi-square goodness-of-fit test using the following hypotheses. H0Ha:H0Ha: © 2012 Pearson Education, Inc. All rights reserved. 6 of 91

7. Chi-Square Goodness-of-Fit Test To calculate the test statistic for the chi-square goodness-of-fit test, the observed frequencies and the expected frequencies are used. The observed frequency O of a category is the frequency for the category observed in the sample data. © 2012 Pearson Education, Inc. All rights reserved. 7 of 91

8. Chi-Square Goodness-of-Fit Test The expected frequency E of a category is the calculated frequency for the category. – Expected frequencies are obtained assuming the specified (or hypothesized) distribution. The expected frequency for the i th category is E i = where n is the number of trials (the sample size) and p i is the assumed probability of the i th category. © 2012 Pearson Education, Inc. All rights reserved. 8 of 91

9. Example: Finding Observed and Expected Frequencies A tax preparation company randomly selects 300 adults and asks them how they prepare their taxes. The results are shown at the right. Find the observed frequency and the expected frequency for each tax preparation method. (Adapted from National Retail Federation) Survey results (n = 300) Accountant71 By hand40 Computer software 101 Friend/family35 Tax preparation service 53 © 2012 Pearson Education, Inc. All rights reserved. 9 of 91

10. Distribution Distribution of tax preparation methods Accountant25% By hand20% Computer software 35% Friend/family5% Tax preparation service 15%

11. Solution: Finding Observed and Expected Frequencies Observed frequency: The number of adults in the survey naming a particular tax preparation method Survey results (n = 300) Accountant71 By hand40 Computer software 101 Friend/family35 Tax preparation service 53 observed frequency © 2012 Pearson Education, Inc. All rights reserved. 11 of 91

12. Solution: Finding Observed and Expected Frequencies Expected Frequency: E i = np i Tax preparation method % of people Observed frequency Expected frequency Accountant 25%71 By hand20%40 Computer Software35%101 Friend/family 5%35 Tax preparation service 15%53 n = © 2012 Pearson Education, Inc. All rights reserved. 12 of 91

13. Chi-Square Goodness-of-Fit Test For the chi-square goodness-of-fit test to be used, the following must be true. 1.The observed frequencies must be obtained by using a random sample. 2.Each expected frequency must be greater than or equal to 5. © 2012 Pearson Education, Inc. All rights reserved. 13 of 91

14. Chi-Square Goodness-of-Fit Test If these conditions are satisfied, then the sampling distribution for the goodness-of-fit test is approximated by a chi-square distribution with k – 1 degrees of freedom, where k is the number of categories. The test statistic for the chi-square goodness-of-fit test is where O represents the observed frequency of each category and E represents the expected frequency of each category. The test is always a right-tailed test. © 2012 Pearson Education, Inc. All rights reserved. 14 of 91

15. Chi - Square Goodness - of - Fit Test 1.Identify the claim. State the null and alternative hypotheses. 2.Specify the level of significance. 3.Identify the degrees of freedom. 4.Determine the critical value. State H 0 and H a. Identify . Use Table 6 in Appendix B. d.f. = k – 1 In WordsIn Symbols © 2012 Pearson Education, Inc. All rights reserved. 15 of 91

16. Chi - Square Goodness - of - Fit Test If χ 2 is in the rejection region, reject H 0. Otherwise, fail to reject H 0. 5.Determine the rejection region. 6.Calculate the test statistic. 7.Make a decision to reject or fail to reject the null hypothesis. 8.Interpret the decision in the context of the original claim. In WordsIn Symbols © 2012 Pearson Education, Inc. All rights reserved. 16 of 91

17. Example: Performing a Goodness of Fit Test Use the tax preparation method data to perform a chi-square goodness-of-fit test to test whether the distributions are different. Use α = 0.01. Survey results (n = 300) Accountant71 By hand40 Computer software 101 Friend/family35 Tax preparation service 53 Distribution of tax preparation methods Accountant25% By hand20% Computer software 35% Friend/family5% Tax preparation service 15% © 2012 Pearson Education, Inc. All rights reserved. 17 of 91

18. Solution: Performing a Goodness of Fit Test H 0 : H a : α = d.f. = Rejection Region Test Statistic: Decision: Conclusion: © 2012 Pearson Education, Inc. All rights reserved. 18 of 91

19. Solution: Performing a Goodness of Fit Test Tax preparation method Observed frequency Expected frequency Accountant7175 By hand4060 Computer hardware 101105 Friend/family3515 Tax preparation service 5345 © 2012 Pearson Education, Inc. All rights reserved. 19 of 91

20. Solution: Performing a Goodness of Fit Test H 0 : H a : α = d.f. = Rejection Region Test Statistic: Decision: χ 2 = © 2012 Pearson Education, Inc. All rights reserved. 20 of 91

21. Example: Performing a Goodness of Fit Test The manufacturer of M&M’s candies claims that the number of different-colored candies in bags of dark chocolate M&M’s is uniformly distributed. To test this claim, you randomly select a bag that contains 500 dark chocolate M&M’s. The results are shown in the table on the next slide. Using α = 0.10, perform a chi- square goodness-of-fit test to test the claimed or expected distribution. What can you conclude? (Adapted from Mars Incorporated) © 2012 Pearson Education, Inc. All rights reserved. 21 of 91

22. Example: Performing a Goodness of Fit Test ColorFrequency Brown80 Yellow95 Red88 Blue83 Orange76 Green78 Solution: The claim is that the distribution is uniform, so the expected frequencies of the colors are equal. To find each expected frequency, divide the sample size by the number of colors. n = 500 © 2012 Pearson Education, Inc. All rights reserved. 22 of 91

23. Solution: Performing a Goodness of Fit Test H 0 : H a : α = d.f. = Rejection Region Test Statistic: Decision: Conclusion: χ2χ2 0 © 2012 Pearson Education, Inc. All rights reserved. 23 of 91

24. Solution: Performing a Goodness of Fit Test Color Observed frequency Expected frequency Brown8083.3 Yellow9583.3 Red8883.3 Blue8383.3 Orange7683.3 Green7883.3 © 2012 Pearson Education, Inc. All rights reserved. 24 of 91

25. Solution: Performing a Goodness of Fit Test H 0 : H a : α = d.f. = Rejection Region Test Statistic: Decision: χ2χ2 0 χ 2 = © 2012 Pearson Education, Inc. All rights reserved. 25 of 91

26. Section 10.1 Summary Used the chi-square distribution to test whether a frequency distribution fits a claimed distribution © 2012 Pearson Education, Inc. All rights reserved. 26 of 91