In: Accounting
1. What does Levene’s test do? How do we know which line to use for this test when writing up the results?
2. How can we use confidence intervals to do hypothesis testing?
ANSWER 1
LEVENE’S
TEST
- For a given set of sample data
arising out of a non normal type of distribution , Levens’s test is
used to check and ensure that variances are equal for all of the
presented data
- This equality of variances amongst
the data presented is known as homogeneity of the
variances
- Levene’s test is also used for
verifying the assumptions that in types of statistical tests
being
Analysis of variance it is assumed
that value of variances falls equal amongst the group of sample
data
- Levene’s test is generally used as
an alternative to the Bartlett's test because , Levene test is less
sensitive than the Bartlett test to the factor of departures from
normality.
- Levene’s test is presented
as
H0: σ12 =
σ22 = … = σk2.
H1: σ12 ≠
σ22 ≠… ≠ σk2. ( for at least
one pair )
What needs to be checked while
writing up the results
- If in the case the given
distribution is skewed distribution or there is not much surety
about the particular underlying shape of the distribution then
Median is the best option to be chosen
- If in the case the given
distribution is symmetric or can also tag along with some
moderately tailed distribution , in that particular scenario Mean
should be checked
ANSWER 2
Using confidence intervals to
do hypothesis testing
- Both of the methods mentioned in the
question be it confidence intervals and hypothesis text work on the
same fundamental ground and are similar in ways like they both
depend upon approximated sampling distribution as both of them are
inferential methods
- For any Hypothesis testing a
hypothesized parameter is a necessity to be there in the data , and
hypothesis tests generally test the data from a sample to test a
particular hypothesis.
- On the contrary , Confidence
intervals use data from a particular sample for estimating a
specific population parameter
- Generally confidence intervals
maintain a specific range of reasonable estimates of the given
population parameter , the two-tailed confidence interval works
well with a two-tailed hypothesis
- Any conclusion drawn from a
particular confidence interval be it a two tailed confidence
interval would be usually the same as a particular conclusion drawn
from any other hypothesis test be it a two-tailed hypothesis
test