Skip to main content

Quantitative Techniques

NIST/SEMATECH Section 1.3.5

Classical confirmatory methods that complement the graphical EDA techniques. These 18 methods cover interval estimation, hypothesis testing, measures of location and scale, distributional fit, outlier detection, and designed experiment analysis.

Confirmatory Statistics

The techniques in this section are classical statistical methods as opposed to EDA techniques. EDA and classical techniques are not mutually exclusive and can be used in a complementary fashion. For example, the analysis can start with graphical techniques such as the 4-plot followed by the classical confirmatory methods discussed here to provide more rigorous statements about the conclusions. If the classical methods yield different conclusions than the graphical analysis, some effort should be invested to explain why — often this indicates that assumptions of the classical techniques are violated.

Many of the quantitative techniques fall into two broad categories:

  1. Interval estimation
  2. Hypothesis tests

Interval Estimates

It is common in statistics to estimate a parameter from a sample of data. The value of the parameter using all possible data, not just the sample data, is called the population parameter or true value of the parameter. An estimate of the true parameter value made using sample data is called a point estimate or sample estimate.

For example, the most commonly used measure of location is the mean. The population mean is the sum of all members of the population divided by the number of members. As it is typically impractical to measure every member, a random sample is drawn and the sample mean is used as a point estimate of the population mean.

Interval estimates expand on point estimates by incorporating the uncertainty of the point estimate. Different samples from the same population generate different values for the sample mean. An interval estimate quantifies this uncertainty by computing lower and upper values of an interval which will, with a given level of confidence (i.e., probability), contain the population parameter.

Hypothesis Tests

Hypothesis tests also address the uncertainty of the sample estimate. However, instead of providing an interval, a hypothesis test attempts to refute a specific claim about a population parameter based on the sample data. For example, the hypothesis might be that two population means are equal, or that a population standard deviation equals a target value.

To reject a hypothesis is to conclude that it is false. However, to accept a hypothesis does not mean it is true — only that we do not have sufficient evidence to believe otherwise. Thus hypothesis tests are stated in terms of both a condition that is doubted (null hypothesis, H0) and a condition that is believed (alternative hypothesis, Ha).

A common format for a hypothesis test:

H0:
A statement of the null hypothesis, e.g., two population means are equal.
Ha:
A statement of the alternative hypothesis, e.g., two population means are not equal.
Test Statistic:
Based on the specific hypothesis test being performed.
Significance Level:
The significance level, α, defines the sensitivity of the test. A value of α = 0.05 means that we inadvertently reject the null hypothesis 5% of the time when it is in fact true (Type I error). Values of 0.1, 0.05, and 0.01 are commonly used. The probability of rejecting H0 when it is false is called the power of the test (1 − β). Its complement β is the Type II error — accepting H0 when Ha is true.
Critical Region:
The values of the test statistic that lead to rejection of H0. Based on the distribution of the test statistic and the significance level, a cut-off value is computed. Values above, below, or both sides of this cut-off (depending on the direction of the test) define the critical region.

Practical Versus Statistical Significance

It is important to distinguish between statistical significance and practical significance. Statistical significance simply means that we reject the null hypothesis. The ability of the test to detect differences depends on the sample size. For a particularly large sample, the test may reject the null hypothesis that two process means are equivalent, yet the actual difference may be too small to have real engineering significance. Similarly, if the sample is small, a difference that is large in engineering terms may not lead to rejection of H0. The analyst should combine engineering judgement with statistical analysis.

Bootstrap Uncertainty Estimates

In some cases, it is possible to mathematically derive appropriate uncertainty intervals — particularly for intervals based on the assumption of a normal distribution. However, there are many cases where this is not possible. In these cases, the bootstrap provides a method for empirically determining an appropriate interval.

All 18 Quantitative Techniques