Tests of Proportions (4 of 4)


Summary of Computations
  1. Specify the null hypothesis and an alternative hypothesis.

  2. Compute the proportion in the sample.

  3. Compute


  4. If p > π then compute

    otherwise, compute

  5. Use a z table to compute the probability value from z.

  1. Observations are sampled randomly and independently.

  2. The adequacy of the normal approximation depends on the sample size (N) and π. Although there are no hard and fast rules, the following is a guide to needed sample size: If π is between 0.4 and 0.6 then an N of 10 is adequate. If π is as low as 0.2 or as high as 0.8 then N should be at least 25. For π as low as 0.1 or as high as 0.9, N should be at least 30. A conservative rule of thumb is that both Nπ and N(1 - π) should be greater than 10.