Hypothesis

Hypothesis:
Hypothesis is a statement subject to verification. More precisely,
it is a quantitative statement about a population, the validity of
which remains to be tested. In other words, hypothesis is an
assumption made about a population parameter.
Steps in hypothesis testing:
1. Formulate a hypothesis
2. Set up a suitable significance level
3. Choose a test criterion
4. Compute
5. Make decisions
 Formulate a Hypothesis
The first step in testing of hypothesis is to set p a hypothesis about
population parameter. Normally, the researcher has to fix two types of
hypothesis. They are null hypothesis and alternative hypothesis.
Null Hypothesis:- Null hypothesis is the original hypothesis. It
states that there is no significant difference between the sample and
population regarding a particular matter under consideration. The
word “null” means ‘invalid’ of ‘void’ or ‘amounting to nothing’. Null
hypothesis is denoted by Ho.
For example, suppose we want to test whether a medicine is effective
in curing cancer. Hence, the null hypothesis will be stated as
follows:-
H0: The medicine is not effective in curing cancer (i.e., there is no
significant difference between the given medicine and other
medicines in curing cancer disease.)
 Example : null hypothesis
In the Market Share example:
A company that has a 10% market share launches a marketing
campaign. At the end of the campaign period the company
conducts a survey in order to assess whether its market share has
increased.
H0 : p=10%
In the Bottling Machine example:
A bottling machine is set to automatically fill each bottle with 355
ml. of soft drink. To check whether the machine needs to be
readjusted, a quality control inspector examines a random
sample of newly filled bottles.
H0 : μ=355ml
Alternative Hypothesis: Any hypothesis other than null
hypothesis is called alternative hypothesis. When a null hypothesis is
rejected, we accept the other hypothesis, known as alternative
hypothesis. Alternative hypothesis is denoted by H1. In the above
example, the alternative hypothesis may be stated as follows:-
𝐻1 : µ ≠ µ𝐻0 (The alternative hypothesis is that the population mean is
not equal to 100 i.e., it may be more or less than 100)
𝐻1 : µ > µ𝐻0 (The alternative hypothesis is that the population mean is
greater than 100)
𝐻1 : µ < µ𝐻0 (The alternative hypothesis is that the population mean is
less than 100)
The null hypothesis and the alternative hypothesis are chosen before
the sample is drawn
H1: The medicine is effective in curing cancer. (i.e., there is significant
difference between the given medicine and other medicines in curing
cancer disease.)
Example : alternative hypothesis

For the bottling machine example, we want to

test the null hypothesis that the mean is equal
to 355ml against the alternative that the mean
is either larger than or smaller than 355ml. This
is called a two sided alternative.
Ha : μ≠355ml
Set up a suitable level of significance:
After setting up the hypothesis, the researcher
has to set up a suitable level of significance.
The level of significance is the probability with
which we may reject a null hypothesis when it is
true. For example, if level of significance is 5%,
it means that in the long run, the researcher is
rejecting true null hypothesis 5 times out of
every 100 times. Level of significance is
denoted by α (alpha). α = Probability of rejecting
H0 when it is true. Generally, the level of
significance is fixed at 1% or 5%.
Decide a test criterion:
The third step in testing of hypothesis is to select
an appropriate test criterion. Commonly used
tests are z-test, t-test, 𝒳 2 – test, F-test, etc.
Compute:
After having selected the statistical technique to
verify the hypothesis, the next step is the
performance of various computations, necessary
for the application of that particular test.
 Making Decision
• Finally, we may draw conclusions and take decisions.
The decision may be either to accept or reject the null
hypothesis.
• If the calculated value is more than the table value,
we reject the null hypothesis and accept the
alternative hypothesis.
• If the calculated value is less than the table value, we
accept the null hypothesis.
 TYPES OF ERRORS IN TESTING OF HYPOTHESIS:
In any test of hypothesis, the decision is to accept or
reject a null hypothesis. The four possibilities of the
decision are:-
1. Accepting a null hypothesis when it is true.
2. Rejecting a null hypothesis when it is false.
3. Rejecting a null hypothesis when it is true.
4. Accepting a null hypothesis when it is false.
Out of the above 4 possibilities, 1 and 2 are correct,
while 3 and 4 are errors. The error included in the
above 3rd possibility is called type I error and that
in the 4th possibility is called type II error.
Type I and Type II errors:
Type I Error
The error committed by rejecting a null hypothesis when
it is true, is called Type I error. The probability of
committing Type I error is denoted by α (alpha).
α = Prob. (Type I error)
= Prob. (Rejecting H0 when it is true)
It is also called producer’s risk
Type II Error
The error committed by accepting a null hypothesis when
it is false is called Type II error. The probability of
committing Type II error is denoted by β (beta).
β = Prob. (Type II error) β
= Prob. (Accepting H0 when it is false)
It is also called consumer’s risk
Example:
let's look at the trail of an accused criminal.
The null hypothesis is that the person is innocent,
while the alternative is guilty.
There can be two error
Case 1
Person not sent to jail despite being guilty.
Or
Case 2
person is not found innocent and is sent to jail,
despite actually being innocent.
Case 1 is type 2
Case 2 is type 1
 Example:1
A company uses a semi-automatic process to fill coffee powder
in 200gm jars and this fill is known to have a standards
deviation equal to 4gm. For long, the amount of coffee powder
filled is observed to be normally distributed with a mean of
200gm. The manager is concerned with ensuring that the
process is working satisfactorily so that the average amount of
coffee filled in the jars is 200gm.She has currently taken a
sample of 25 jars, weighs the amount of coffee in each of them
and finds the average amount equal to 202gm. Now, her
problem is as to how this difference of 2gm be interpreted. Is it
a small difference and may be ignored or is it large enough to
conclude that the process is not working properly and some
action is wanted?
Q. Set up the hypothesis.

Null hypothesis, 𝐻0 : µ = 200𝑔𝑚

Alternative hypothesis, 𝐻1 : µ ≠ 200𝑔𝑚
That means, we hypothesize that the mean coffee powder is
indeed 200 gm. if the sample mean is not found to be
significantly different from this hypothesized value, we have no
reason to reject this hypothesis. However, if the sample mean is
significantly higher or lower than this value, then the null
hypothesis is rejected and the alternative hypothesis is accepted.
 Example:2
A company administered an intelligence test to all its employees
for a long period of time. For all the 80,000 employees, the mean
score was found to be 75 and the standard deviation 12. A
researcher wishes to study the theory that the top line supervisors
of the company are more intelligent than the average. For that, a
sample of 50 supervisors is chosen randomly and their mean
score is found. To test the theory, what should be the null and
alternate hypothesis?
Let the mean score of the top line supervisors
be μ . The null and alternative hypothesis would
be as under:
Null hypothesis, 𝐻0 : µ = 75
Top line supervisors are not more intelligent than
average employee
Alternative Hypothesis, 𝐻1 : µ > 75
Top line supervisors are more intelligent than
average employee