Section

8.1:

Hy potheses

and Testing Pr ocedure

Concepts

and Form ulae:

Sup pose there is a claim or a statem ent. T he null hy pothesis is an ans wer in which the claim or the statem ent is true, and denoted by H0. The alternative hy pothesis an ans wer in which claim or the statem ent is N T true, O denoted by Ha (HA or H1). is the and

If we conclude H0 , we say we accept H0 or fail to reject H0 ; if we conclude Ha, we say we reject H0 and conclude Ha .

A testing steps:

procedure is specified by the foll owing

Ch oose a test statistic. A test statistic is a function of data w hich m kes the decision a about the rejection or acceptance of H0. A rejection range is a set in which we reject H0 if the test statistic is in the set and accept H0 if the test statistic is outside of the set. re Let T be the test statistic and R be the jection range. Then, we conclude

H0 Ha

if T 6 R if T R

In general, a test foll owing table.

can be sum arized into the m

Conclude H0 Ha

Truth H0 Ha Correct Type II Err or Type I Err or Correct

Type I err or rate (probabili ty) is defined by P (Conclude Ha|Truth is H0)

and type II err or rate (probabili ty) is defined by P (Conclude We H0|Truth is Ha).

want to ma ke both probabilities sm all. However, this is usually impossible in real applications. Thus classicall y, we only control type I err or probabilities.

The significance level denoted by is the maximum of type I err or probabilities. Therefore, if we ch oose = 0.05, we gu arantee the type I err or probabili ty is less than or equal to 0.05.
4

First exam ple of Section 8.1: Exam ples 8.1 and 8.3 on text book. Sup pose old rate of no visible dam age is 25% An experim . ent took 20 samples and want to know whether the rate increases with a new m eth od. Null hy pothesis is

H0 : rate does not increase versus the alternative Ha : rate increase s. U nder H0 , the count X of visible damage follows Bin(20 , 0.25). Under Ha, X Bin(20 , p) with p > 0.25. Then, we can write H0 : p = 0.25 Ha : p > 0.25 . Assume the rejection range is

R = {8, 9, 10 , 11 , , 20 }.

 T hen,

the type I err or probabili ty is P (X 8|p = 0.25) = B(7; 20 , 1 0.25) = .102 . 0 level = 0.102.

The significance

T he type II err or probabili ty is P (X < 8|p > 0.25) = B(7; 20 , p) which is a function of p. the testing problem as

Sup pose we change

H0 : p 0.25 Ha : p > 0.25 . T hen, the type I err or probabili ty is 1 B(7; 20 , p) for p 0.25 and the type II err or probabili ty is B(7; 20 , p) for p > 0.25. In this case, we still have the significance level = 0.102.

0.10

0.08

Type II Error Probability 0.00 0.05 0.10 0.15 0.20 0.25

Type I Error Probability

0.06

0.04

0.00

0.02

0.0

0.2

0.4

0.6

0.8

0.4

0.6 True Proportion

0.8

1.0

True Proportion

Graph of Type I and Type II err or probabilities The significance level is the m axim um I err or probabilities, which gives = 0.102 .
7

of type

Second exam ple of Section 8.1: Exam ples 8.2 and 8.4 on text book. Assume we ch oose 25 sam ples from N (, 81) and sup pose we test H0 : = 7 Ha : < 75 . 5 Sup pose we use R = X
(

< 70 .8, i.e., we conclude

H0 Ha

if X 70 .8 if X < 70 .8

T hen,

the type I err or is P (X 70 .8 if = 7 ) 5 = ( 70 .8 75

q

81 /25

= ( 2.33) = 0.01 . Then, the significance II err or probabili ty is () = P (X level is = 0.01 and type 70 .8 1.8

70 .8) = 1 (

).

for < 75, which is a function For exam ple, we have

of for < 75.

(72) = 1 0.67) = 0.7486 . (

0.010

0.008

Type II Error Probability 75 76 77 78 79 80

Type I Error Probability

0.006

0.004

0.002

0.000

0.4 70

0.5

0.6

0.7

0.8

0.9

1.0

71

72

73

74

75

True Expected value

True Expected value

Graph of Type I and Type II err or probabilities The significance level is the m axim um I err or probabilities, which gives = 0.01 .
9

of type