# Some variations in the Z-test â€“ I

- What if Christos surveyed the market and found that the student behavior is estimated to be:
- They would found the training too expensive if their household income is < US$19,000 and hence would not have the buying power for the course?
- They would perceive the training to be of inferior quality, if their household income is > US$19,000 and hence not buy the training?
- How would the decision criteria change? What should be the testing strategy?

- Hint:
- From the question wording infer: Two tailed testing
- Appropriately modify the significance value and other parameters
- Use the Z-test

- Appropriate change in the decision making and testing process:
- Students will not attend the course if:
- The household income >$19,000 and the students perceive the course to be inferior
- The household income is <$19,000

- This becomes a two tailed test wherein the student will join the course only when the household lie between a particular boundary. i.e. the household income should be neither very high neither very low

- Students will not attend the course if:

# Two â€“ Tailed test

- Now the test is modified to two-tailed test, which signifies that all z-values that would cause Christos to reject H
_{0}, are in both the tails of the sampling distribution- Î¼ -> Population Mean
- H0: Î¼ = $19,000
- Ha: Î¼ â‰ $19,000

- Since we are checking for significance difference on both the ends, so itâ€™s a two tailed test
- The lower boundary =

- Conclusion: If the household income lies between $18,216 and $19,784 then the student will attend the course at 95% confidence