Basic Concepts - Hypothesis Testing

Hypothesis testing Lesson outcomes • Define the hypothesis testing • Identify the general steps of hypothesis testing • Describe • null & alternative hypothesis • level of significance • test statistic • critical & p-values • rejection region • Differentiate between two-tailed test & one-tailed test • Clarify Type I & Type II errors

Basic concepts Hypotheses: • Null hypothesis • Alternative hypothesis

Rejection region: • Significance level

Decision rule: • Critical value • P-value

Definition Hypothesis • A statement about the parameters of one or more populations • Population mean • Population proportion

Definition Hypothesis • A statement about the parameters of one or more populations • Population mean • Population proportion

1.Definition Hypothesis testing • A method/ standard procedure for testing a statement • A process that uses sample statistics to test a claim • An inferential method • To analyze evidence that data provide • To make decisions based on data

2. Types of error Possibility of making the wrong decision • decision is based on a sample

Types of error Type I error • the mistake of rejecting the null hypothesis when it is actually true.

• The symbol α (alpha) is used to represent the probability of a type I error.

Type II error • the mistake of failing to reject the null hypothesis when it is actually false.

• The symbol  (beta) is used to represent the probability of a type II error

3. Steps for hypothesis testing ≠

STEP 1: • State the hypotheses

STEP 2: • Select the significance level

STEP 3: • Identify the test statistic to use

STEP 4: • Formulate the decision rule

STEP 5: • Make the statistical desicion