Next section: Differences between proportions

- Specify the null hypothesis and an alternative hypothesis.

- Compute the proportion in the sample.

- Compute

.

- If p > π
then compute

otherwise, compute

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

- Observations are sampled randomly and independently.

- 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.

Next section: Differences between proportions