HYPOTHESIS TESTING

AND TYPES

BY
LUNATIC
HYPOTHESIS

● A Hypothesis is a conjectural statement, a tentative proposition

about relation between two or more phenomena or variables.
● Hypothesis is a theory which is not full reasoned, derived out of
the combination of two words ‘hypo’ and ‘thesis’ meaning ‘less
than’ and ‘reasoned theory of rational view point’ respectively.
● It is a systematic procedure of testing an assumption on the
sample data which is drawn from population with the objective
to estimate about the population.
 Descriptive

CLASSIFICATION OF HYPOTHESIS
On The Basis of Function

Relational

Null
On the Basis of
Formulation

Alternate
ON THE BASIS OF FUNCTION
DESCRIPTIVES HYPOTHESES
These are propositions that describe the nature or
characteristics (such as size, form or distribution) of
an object, person, organisation, situation or event.
Such an object, person, organisation, situation or
event is a variable under study. For example, in order
to study the unemployment rate (variable) of India,
the researcher proposes that the unemployment rate
in India is 3%.
RELATIONAL HYPOTHESES
These are propositions that describe the relationship
between two variables. The relationship suggested
may be a correlational relationship (positive or
negative) or a causal relationship. The hypothesis
explaining correlational relationship is called
correlational hypothesis and hypothesis explaining
causal relationship are called a causal hypothesis.
For example, the students belonging to business class
are less serious in studies depicts a negative
correlational relationship. Stress reduces
performance, indicates a causal or explanatory
relationship.
 ON THE BASIS OF FORMULATION
● NULL HYPOTHESES
● These are hypothetical statements
acceptance or rejection of which depends upon
the results of statistical texts. Generally, these
are formulated stating that no difference exists
between the parameter and the statistic being
compared to it or one variable has no relation
to the other. For ex, there is no relationship
between family income and expenditure. Null
hypotheses are so called because tests would
nullify them.
● ALTERNATE HYPOTHESES
● The researcher will formulate a hypothesis
which is in contradiction to the null hypothesis,
which is called an alternate hypothesis. If in
case the null hypothesis is not accepted , then
the alternate hypothesis will be accepted. Also,
the study must be exhaustive(comprehensive). If
the above stated null hypothesis is not accepted,
then it is statistically verified that there is a
relationship between family income and
expenditure
 Process of
Hypothesis Testing
Formulate
The first and foremost step in Hypothesis Testing is to
Formulate Null and Alternate Hypothesis which helps in

Null and 1 providing a basis for the whole research

Alternate
Hypothesis The Null Hypothesis is represented as H0 is the hypothesis
which is tested for possible rejection under the assumption

2 that it is true.

The Alternate Hypothesis is represented as H1 is the logical

opposite of the Null hypothesis.

3
● Select an Appropriate Statistical test
1. The next step is the selection of an appropriate test statistic and it’s
distribution.
2. Test statistic measures how close the sample is to the null hypothesis.
3. Selection of appropriate test depends on the type of data collected in
the sample such as: t-test, z-test, Chi-square test etc.
● Choose Level of Significance
1. It denotes the leverage in the estimation of a population parameter
such that it is having only chance variation but not the chance of
variation.
2. This helps the researcher to remove the cause variation but not the
chance of chance variation.
● Collect Sample Data
1. After deciding the Level Of Significance, the sample size is determined
on which the tests are to be performed.
2. The sample size constitutes the number of total elements to be drawn.
3. Sample Size can vary on various factors such as: Size of population,
Variability of the population etc.
● Calculate Test Statistic and Draw a Statistical Conclusion
1. Under this step the researcher has to compute the test statistic and
draw a statistical conclusion from the same.
2. If the researcher has properly computes the test statistic then only the
researcher would be able to either reject the H0 or would do not accept
the H0 using the concept of acceptance and rejection region.
Conclude Business/research
implications
The last step in the process of
hypothesis testing is to present
the information obtained using
hypothesis testing to the
stakeholders or decision
makers.
This will help the business to
take various decision from the
result of the research.
It is the ultimate right of the
decision maker to decide
whether or not the statistically
significant result is a
substantive result to be
implemented for meeting the
organisation's goals.
HYPOTHESIS PARAMETRIC TESTS NON-PARAMETRIC TESTS

TESTING ● t-test ● Chi-square test

● z-test ● Mann-Whitney U test
● Unpaired t-test ● Wilcoxon Signed Rank Sum
● Paired t-test Test
● F test ● Kruskal-Wallis Test
● One-way ANOVA ● Friedman Test
● Spearman Rank Test
PARAMETRIC TESTS
A parametric test is the hypothesis test which provides generalisations
for making inferences about one or more populations based on sample
information form those populations(s).

1. t-test

Tests for a Student’s t-distribution – ie, in a normally distributed

population where standard deviation in unknown and sample size is
comparatively small. Paired t-tests compare two samples.

2. z-test

This test is used if n ≥ 30 and population standard deviation is known.

z test for single variance is used to test a hypothesis on a specific
value of the population variance.
3. F-test
An F-test is any statistical test in which the test statistic has an F-distribution under the null
hypothesis. It is most often used when comparing statistical models that have been fitted to a
data set,

4. One-way ANOVA
Analysis of Variance (ANOVA) is a hypothesis testing technique used to test the equality of two
or more population (or treatment ) means by examining the variances of samples that are taken
from them. ANOVA is generally used to compare the equality of three or means.\

However, when the means from two samples are compared using ANOVA it is equivalent to
using a t-test.
NON-PARAMETRIC TESTS
A non-parametric test is defined as the hypothesis test which is based on non-metric (nominal or ordinal)
data. These are used when population parameters are not known. It is also referred to as a distribution-free
test because normal population assumption is not required. The test is mainly based on medians.

1. Chi-square test
Tests for an association of significance between two categorical variables in a population sample.
Typically used with random sampling.

2. Mann-Whitney U test
It is a non-parametric test that can be used in place of an unpaired t-test. It is used to test the null
hypothesis that two samples come from the same population (i.e. have the same median) or, alternatively,
whether observations in one sample tend to be larger than observations in the other.

3. Wilcoxon Signed Rank Sum test

It is used to test the null hypothesis that the median of a distribution free test which is used to test the null
hypothesis that the median of a distribution is equal to some value or the median difference between two
paired observations is 0.
4. Kruskal-Wallis Test
Kruskal - Wallis test sometimes called the one-way ANOVA on ranks (Htest) is used when the assumptions
for ANOVA aren’t met. The test determines whether the medians of two or more groups are different.

5. Friedman’s test
It is used for finding differences in treatments across multiple attempts. It is used in place of ANOVA test
when the distribution of the data is unknown. Friedman’s test is an extension of the sign test, used when
there are multiple treatments.

6. Spearman Rank Correlation

Spearman rank correlation coefficient, rs, is the non-parametric version of the Pearson correlation
coefficient. It requires data to be ordinal, interval ratio. It gives a value from -1 to 1., where:

+1 = a perfect positive correlation between ranks

-1 = a perfect negative correlation between ranks
0 = no correlation between ranks.
THANK YOU