Hypothesis Testing

What is a Hypothesis?
I assume that
A hypothesis is an average(mean) Marks in
assumption about the PS is 24
population parameter.
 A parameter is a
Population mean or
proportion
 The parameter must be
identified before
analysis.

© 1984-1994 T/Maker Co.

 The Null Hypothesis, H0
• States the Assumption (numerical) to be tested
e.g. The average Marks in PS is equals to 24
(H0: m = 24)
• Begin with the assumption that the null
hypothesis is TRUE.
(Similar to the notion of innocent until proven guilty)

•Refers to the Status Quo

•Always contains the ‘ = ‘ sign
•The Null Hypothesis may or may not be rejected.
The Alternative Hypothesis, H1

• Is the opposite of the null hypothesis

e.g. The average Marks in PS is
not equals to 24 (H1: m  24)
• Challenges the Status Quo
• Never contains the ‘=‘ sign
• The Alternative Hypothesis may or may
not be accepted
 Identify the Problem

Steps:
 State the Null Hypothesis (H0: m = 24)

 State its opposite, the Alternative

Hypothesis (H1: m  24)
 Hypotheses are mutually exclusive &
exhaustive
 Sometimes it is easier to form the
alternative hypothesis first.
 Hypothesis Testing Process

Assume the
population
mean age is 50.
(Null Hypothesis) Population

Is X = 20  m = 50? The Sample

Mean Is 20
No, not likely!

REJECT
Null Hypothesis Sample
 Reason for Rejecting H0

Sampling Distribution
It is unlikely
that we would ... Therefore, we
get a sample reject the null
mean of this hypothesis that
value ... m = 50.
... if in fact this were
the population mean.

20 m = 50 Sample Mean
H0
 Level of Significance, a
• Defines Unlikely Values of Sample
Statistic if Null Hypothesis Is True
 Called Rejection Region of Sampling
Distribution
• Designated a (alpha)
 Typical values are 0.01, 0.05, 0.10
• Selected by the Researcher at the Start
• Provides the Critical Value(s) of the Test
 Level of Significance, a and
the Rejection Region
H0: m  24 a Critical
H1: m < 24 Value(s)
Rejection 0
Regions a
H0: m  24
H1: m > 24
0
a/2
H0: m = 24
H1: m  24
0
 Errors in Making Decisions

• Type I Error
 Reject True Null Hypothesis
 Has Serious Consequences

 Probability of Type I Error Is a

 Called Level of Significance

• Type II Error
 Do Not Reject False Null Hypothesis
 Probability of Type II Error Is b (Beta)
 Result Possibilities
H0: Innocent
Jury Trial Hypothesis Test
Actual Situation Actual Situation
Verdict Innocent Guilty Decision H0 True H0 False
Do Not Type II
Innocent Correct Error Reject 1-a
Error (b )
H0
Type I Power
Guilty Error Correct Reject Error
H0 (1 - b)
(a )
 Z-Test Statistics (s Known)

• Convert Sample Statistic (e.g., X ) to

Standardized Z Variable
X  mX X m
Z= = Test Statistic
sX s
n

• Compare to Critical Z Value(s)

 If Z test Statistic falls in Critical Region,
Reject H0; Otherwise Do Not Reject H0
 p Value Test

• Probability of Obtaining a Test Statistic

More Extreme  or ) than Actual
Sample Value Given H0 Is True
• Called Observed Level of Significance
 Smallest Value of a H0 Can Be Rejected
• Used to Make Rejection Decision
 If p value  a Do Not Reject H0
 If p value < a, Reject H0
 Hypothesis Testing: Steps

Test the Assumption that the mean Marks

in PS is equals to 24.
1. State H0 H0 : m = 24
2. State H1 H1 : m  24
3. Choose a a = .05
4. Choose n n = 40
5. Choose Test: Z Test (or p Value)
 Hypothesis Testing: Steps
(continued)

Test the Assumption that the average

Marks in PS is equals to 24.
6. Set Up Critical Value(s) Z = -1.96 to 1.96
7. Collect Data 40 students are surveyed
8. Compute Test Statistic Computed Test Stat.= -2
9. Make Statistical Decision Reject Null Hypothesis
10. Express Decision The true mean marks in PS is
either greater than 24 or
less tan 24.