In this tutorial we will learn how to perform Z Test in Excel. When we want to compare two means when variance are known, then we use Z Test. Z Test is the test of null hypothesis, which states the mean of two population are equal.
H0: μ1 – μ2 = 0
H1: μ1 – μ2 ≠ 0
Alternate hypothesis H1 states that the two population means are not equal.
Note: Z test is performed when the variance of the two population are known
We will be using the scores of students across two different subjects to depict example on Z test in Excel, Which is shown below.
Step 1: calculate population variance of variable 1 and variable 2 with VAR.P formula as shown below
Step 2: On the top right corner of the data tab click data analysis.
Note: if you can’t able to find the Data Analysis button? Click here to load the Analysis ToolPak add-in.
Step 3: Select Z – Test: Two Sample for Means and click ok
Step 4: Click in the Input Range boxes and select the Variable 1 Range A2:A10 and Variable 2 Range B2:B10. Mention the variable 1 variance and variable 2 variance that we have calculated and also mention the output range as shown below and click ok
So the result will be
If z < – z Critical two-tail or z Stat > z Critical two-tail, we reject the null hypothesis. In our case 0.213 > -1.959 and 0.213 < 1.959, so we cannot reject null hypothesis. So both the means do not differ significantly.