By: Dr.

Akhilesh Kumar Choudhary

 Terms Used
• Population  all possible values
• Sample  a portion of the population
• Statistical inference  generalizing from a sample
to a population with calculated degree of certainty
• Two forms of statistical inference
– Hypothesis testing
– Estimation
• Parameter  a characteristic of population, e.g., population
mean µ
• Statistic  calculated from data in the sample, e.g., sample
mean ( )
 Distinctions Between Parameters
and Statistics

Parameters Statistics

Source Population Sample

Notation Greek (e.g., μ) Roman (e.g., xbar)

Vary No Yes
 Hypothesis
1. There are two hypotheses, the null and the alternative
hypotheses.
2. The procedure begins with the assumption that the null
hypothesis is true.
3. The goal is to determine whether there is enough evidence
to infer that the alternative hypothesis is true, or the null is
not likely to be true.
4. There are two possible decisions:
Conclude that there is enough evidence to support the
alternative hypothesis. Reject the null.
Conclude that there is not enough evidence to support the
alternative hypothesis. Fail to reject the null.
Characteristics of hypothesis:
(i) Hypothesis should be clear and precise. If the hypothesis is not
clear and precise, the inferences drawn on its basis cannot be
taken as reliable.
(ii) Hypothesis should be capable of being tested.
(iii) Hypothesis should state relationship between variables, if it
happens to be a relational hypothesis.
(iv) Hypothesis should be limited in scope and must be specific.
(v) Hypothesis should be stated as far as possible in most simple
terms so that the same is easily understandable by all concerned.
(vi) Hypothesis should be consistent with most known facts i.e.,
it must be consistent with a substantial body of established
facts. In other words, it should be one which judges accept as
being the most likely.
(vii) Hypothesis should be agreeable to testing within a
reasonable time.
 Null Hypothesis vs. Alternative
Hypothesis
Null Hypothesis Alternative Hypothesis

• Statement about the value • Statement about the value of

of a population parameter
• Represented by H0
• Always stated as an
Equality
a population parameter that
must be true if the null
hypothesis is false
• Represented by H1
• Stated in on of three forms
• >
• <
• 
 Nonstatistical Hypothesis Testing…

• A criminal trial is an example of hypothesis testing without the

statistics.
• In a trial a jury must decide between two hypotheses. The null
hypothesis is
• H0: The defendant is innocent

• The alternative hypothesis or research hypothesis is

• H1: The defendant is guilty

• The jury does not know which hypothesis is true. They must
make a decision on the basis of evidence presented.
 Nonstatistical Hypothesis Testing…

• In the language of statistics convicting the defendant is called

rejecting the null hypothesis in favor of the alternative
hypothesis. That is, the jury is saying that there is enough
evidence to conclude that the defendant is guilty (i.e., there is
enough evidence to support the alternative hypothesis).

• If the jury acquits it is stating that there is not enough evidence

to support the alternative hypothesis. Notice that the jury is not
saying that the defendant is innocent, only that there is not
enough evidence to support the alternative hypothesis. That is
why we never say that we accept the null hypothesis, although
most people in industry will say “We accept the null
hypothesis”
 Nonstatistical Hypothesis Testing…

• There are two possible errors.

• A Type I error occurs when we reject a true null hypothesis. That
is, a Type I error occurs when the jury convicts an innocent
person.
• A Type II error occurs when we don’t reject a false null
hypothesis [accept the null hypothesis]. That occurs when a
guilty defendant is acquitted.
Type I vs. Type II Error
 Type I and Type II Errors
True State of Nature
The null The null
hypothesis is hypothesis is
true false

Type I error
We decide to (rejecting a true Correct
reject the null hypothesis) decision
null hypothesis
Decision

Type II error
We fail to Correct (rejecting a false
reject the decision null hypothesis)
null hypothesis

 Alpha vs. Beta

·  is the probability of Type I error

·  is the probability of Type II error
· The experimenters (you and I) have the freedom to set the
-level for a particular hypothesis test. That level is called
the level of significance for the test. Changing a can (and
often does) affect the results of the test—whether you
reject or fail to reject H0.

A traditional guideline for choosing the level of significance is as follows:

(a) the 0.10 level for political polling, (b) the 0.05 level for consumer
research projects, and (c) the 0.01 level for quality assurance work.
 Alpha vs. Beta, Part II
• It would be wonderful if we could force both  and  to
equal zero. Unfortunately, these quantities have an
inverse relationship. As  increases,  decreases and
vice versa.
• The only way to decrease both  and  is to increase the
sample size. To make both quantities equal zero, the
sample size would have to be infinite—you would have
to sample the entire population.
 Forming Conclusions

• Every hypothesis test ends with the experimenters (you

and I) either
• Rejecting the Null Hypothesis, or
• Failing to Reject the Null Hypothesis
• As strange as it may seem, you never accept the Null
Hypothesis. The best you can ever say about the Null
Hypothesis is that you don’t have enough evidence,
based on a sample, to reject it!
 Seven Steps to Hypothesis Testing Happiness
(Traditional or Classical Method)

1) Describe in words the population characteristic about which hypotheses are to

be tested
2) State the null hypothesis, Ho
3) State the alternative hypothesis, H1 or Ha
4) Display the test statistic to be used
5) Identify the rejection region
• Is it an upper, lower, or two-tailed test?
• Determine the critical value associated with , the level of significance of
the test
6) Compute all the quantities in the test statistic, and compute the test statistic
itself.
7) State the conclusion. That is, decide whether to reject the null hypothesis,
Ho, or fail to reject the null hypothesis. The conclusion depends on the level
of significance of the test. Also, remember to state your result in the context
of the specific problem.
 Types of Hypothesis Tests

• Large Sample Tests, Population Mean (known population

standard deviation)

• Large Sample Tests, Population Proportion (unknown

population standard deviation)

• Small Sample Tests, Mean of a Normal Population

 Concepts of Hypothesis Testing

• The two hypotheses are called the null hypothesis and the
other the alternative or research hypothesis. The usual
notation is:
pronounced
H “nought”

• H0: — the ‘null’ hypothesis

• H1: — the ‘alternative’ or ‘research’ hypothesis

• The null hypothesis (H0) will always state that the parameter
equals the value specified in the alternative hypothesis (H1)
 Test Statistic
This is an example of a one-sample test of a mean when σ is
known. Use this statistic to test the problem:

If the population standard deviation, σ, is known and either the data is

normally distributed or the sample size n > 30, we use the normal
distribution (z-statistic).
 Test Statistic

When the population standard deviation, σ, is unknown and either the

data is normally distributed or the sample size is greater than 30
(n > 30), we use the t-distribution (t-statistic). s is sample standard deviation
 Illustrative Example: “Body Weight”

• The problem: In the 2015s, 20–29 year old men in the India
had a mean μ body weight of 170 pounds. Standard deviation
σ was 40 pounds. We test whether mean body weight in the
population now differs.
• Null hypothesis H0: μ = 170 (“no difference”)
• The alternative hypothesis can be either Ha: μ > 170 (one-
sided test) or
Ha: μ ≠ 170 (two-sided test)
• Significant level,  =0.05 (say)
• Critical Region for z test , Z < ± 1.96
 Illustrative Example: z statistic

• For the illustrative example, μ0 = 170

• We know σ = 40
• Take an SRS of n = 64. Therefore

• If we found a sample mean of 173, then

 Illustrative Example: z statistic
If we found a sample mean of 185, then
 Illustrative Example: z statistic
A consumer group, concerned about the mean fat content of a
certain grade of steakburger submits to an independent laboratory a
random sample of 12 steakburgers for analysis. The percentage of
fat in each of the steakburgers is as follows.

21 18 19 16 18 24 22 19 24 14 18 15

The manufacturer claims that the mean fat content of this grade of
steakburger is less than 20%. Assuming percentage fat content to be
normally distributed with a standard deviation of 3,

carry out an appropriate hypothesis test in order to advise the

consumer group as to the validity of the manufacturer's claim.
Illustrative Example: z statistic
Illustrative Example: z statistic
 Illustrative Example: t statistic
Consider again the previous example on steakburgers and now suppose that it
can be assumed that the percentage fat content is normally distributed but with
an unknown standard deviation.
Illustrative Example: t statistic
Illustrative Example: t statistic