Basic Concepts of Hypothesis TestingIntroduction
A hypothesis is a statement or a tentative theory that may or may not be true, but is initially assumed to be true until new evidence suggests otherwise. It may be proposedfrom a preliminary observation, a guess or based from previous experiences.In hypothesis testing problem, the researcher has in mind a specific notion concerning the characteristics of the population under study before the sample data aregathered. Then investigate the sample information to examine how consistent the data with the hypothesis in questioned. If the sample information deviate much from the statedhypothesis, then researcher tend to disbelieved and reject the proposed statement. Although the proposed statement may be true, it is expected that any single sample (or samples)will differ slightly from the true characteristic of the population and other will not, because of the sampling variation, have the same exact value as the population parameter. Hence,differences between the sample information and the population under study might be due chance. The procedure of statistical test will provide the basis in deciding whether differencesbetween the sample observation and the hypothesized value could be due to sampling variation alone, or are so large enough as to make the proposed statement untenable.
Types of Hypothesis
Null hypothesis – the null hypothesis is denoted by Ho, it is the hypothesis of “no difference” and usually formulated for the purpose of being rejected.Alternative hypothesis – the alternative hypothesis is denoted by Ha or H1. This is the hypothesis that contradicts the hull hypothesis. If the null hypothesis is rejected, thealternative is being supported. The alternative hypothesis is the operational statement of the experimenter’s research hypothesis.
Types of Errors
Type I error – usually committed if the Ho is rejected when the Ho is true
Type II error – usually committed if the Ho is accepted when the Ho is falseIn actual situation a given table below summarizes the kind of action and the type of error when one accepts or rejects a hypothesis.
Status of Hypothesis Accept Ho Reject Ho
Ho is True Correct Decision Type I errorHo is False Type II error Correct Decision
One-sided and Two-sided TestDirectional/Nondirectional Test
In one-sided test the Ha specifies that the unknown population parameter is entirely above or entirely below the specified value of the Ho. It is called one-tailed or a directionaltest. While the two- sided test, the Ha specifies that the unknown population parameter can lie on either side of the value specified by Ho. It is called two-tailed ornondirectional test. The following are classified as one-tailed testHo : µ = 100 Ha : µ < 100Ho : µ = 100 Ha : µ > 100 The Ha is either entirely below 100 or entirely above 100 The following are classified as two-tailed testHo : µ = 100 Ha : µ ‡ 100Ho : µ1 = µ2 Ha : (µ1 - µ2) ‡ 0 The Ha can fall in either side of the Ho
Note : For a directional test the inequality symbol of the Ha is less than (<) or greater than (>) while a non-directional test the symbol is not equal ( ‡ ).Testing Level of Significance
The probability of committing type I error is called the level of significance or margin of error of the test and it is denoted by
(alpha), and one minus the level of significance is calledconfidence level. The probability of committing type II error is denoted by ß, and (1– ß) is called the power of the test. This will indicate the ability of the test statistics to determine correctly that the Hois false, hence it should be rejected.Rather compute the actual chance of committing type I error, the researcher conventionally establish the level of significance before hand by considering the consequences of committing type I error. There are 2 most commonly used level of significance 0.05 and 0.01. At 0.05 level, the researcher is willing to accept a 5% chance of being wrong decisionwhen Ho is rejected. At 0.01 level, the researcher is willing to accept a 1% chance of being wrong when Ho is rejected.If Ho is rejected at 0.05 level, then it is usually labeled as "significant”, otherwise the result is labeled “not significant”. If Ho is rejected at 0.01 level, then the result is labeled “Highlysignificant”.For a fixed sample size n, decreasing one type of error would mean increasing the other type of error. The only way to decrease both type of errors simultaneously is by increasing thesample size.
The Critical Region
The level of significance determines which values would be considered improbable or probable if the hypothesis were true. Thus, the range of possible values (sampling distribution) isdivided into two sections or regions, the acceptance region (the probable values) and the rejection region (improbable values). The size of both region is completely specified by thelevel of significance. The acceptance region is equal to (1 –
) and the critical region or the rejection region is equal to
. The experimenter will decide to reject the null hypothesisonly if the probability of observing of such an observed value is equal to or less than
. The size of the critical region is being determined by
, in general the location of the critical region is determined by the nature of the alternative hypothesis. The difference in thelocation of the critical region differentiates the statistical hypothesis into one-tailed or two-tailed test.Critical region is the set of all values of the test statistics that would cause to reject the null hypothesis.
Basic Steps in Hypothesis Testing
The following steps should be properly observed so as to make sure that the thinking is logical.1. State the Ho and Ha, decide what data to collect and under what conditions2. Specify the level of significance Âµ and the sample size n3. Find the sampling distribution of the test statistics under the assumption that Ho is true4. Establish the critical region for the test statistics5. Computation of the test statistics, for a sample size n6. Decision.
Suppose that X1, X2, . . . Xn are sample observations from a normal populations with unknown mean and known variance. The appropriate test statistics in comparing the samplemean and the population iswhich is normally distributed with mean 0 and variance 1.