What is a ‘P-Test’
A statistical method used to test one or more hypotheses within a population or a proportion within a population. When testing a hypothesis about a population proportion (p) within a large population (one in which the sample size, “n”, is not greater than 5% of the overall population), the formula is:
x = (m/n-P) / SqRt[P(1-P)/n]
m= “yes” response
n = random sample size
p = proportion
P = population
This formula is used to test three hypotheses:
Explaining ‘P-Test’
For example, a polling group contacted a group of investors and asked if they felt that the economy would fall into a recession. Of the 1000 people contacted, 700 said that they thought that the economy was heading toward recession. The researchers then applied the P-Test to determine if p ≤ 0.60, p ≥ 0.60, or p = 0.60; basically, what percentage of the population believe that the economy will fall into a recession.
Further Reading
- Financial development and economic growth: evidence from panel unit root and cointegration tests – www.sciencedirect.com [PDF]
- A cointegration test for market efficiency – search.proquest.com [PDF]
- Stock prices response to real economic variables: the case of Germany – www.emerald.com [PDF]
- Financial development and economic growth in India: some evidence from non-linear causality analysis – link.springer.com [PDF]
- Using economic value added as a portfolio separation criterion – www.jstor.org [PDF]
- Stationarity tests for financial time series – www.sciencedirect.com [PDF]
- The financial impact of boycotts and threats of boycott – www.sciencedirect.com [PDF]
- Impact of financial/economic crisis on demand for hotel rooms in Hong Kong – www.sciencedirect.com [PDF]
- Regional economic disparity, financial disparity, and national economic growth: Evidence from China – onlinelibrary.wiley.com [PDF]
