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o Null hypothesis-mutually exclusive alternative hypothesis

Null hypothesis=H0

Alternative hypothesis= H1; is the opposite of the alternative hypothesis

o The alternative hypothesis serves as the focus of research oftentimes

You can never prove that the null hypothesis is correct because the decision is based on

only sample information, but you can conclude that there is insufficient evidence to

warrant its rejection

Statement of the null hypothesis always contains an equal sign

Statement of the alternative hypothesis never contains an equal sign

Regions of Rejection and Nonrejection

Sampling distribution of the test statistic is divided into two regions, region of rejection

and region of nonrejection

o If the test statistic falls into the region of nonrejection, you do not reject the null

hypothesis

You conclude that there is insufficient evidence that the population mean

fill is different from null

o If the test statistic falls into the rejection region, you reject the null hypothesis

Region of rejection consists of the values of the test statistic that are unlikely to occur if

the null hypothesis is true

o These values are much more likely to occur if the null is false

To make a decision concerning the null hypothesis, you first determine the critical value

of the test statistic

o Critical value divides the nonrejection region from the rejection region

Risks in Decision Making Using Hypothesis Testing

Type 1 error-occurs if you reject the null when it is true and should not be rejected; is a

false alarm

o Probability of Type 1 error occurring is (level of significance)

Chapter 9: Fundamentals if Hypothesis Testing: One-Sample Tests

(1-) is the confidence coefficient, probability that you will not reject the

null when it is true

Type 2 error-occurs if you do no reject the null when it is false and should be rejected;

represents a missed opportunity to take some corrective action

o Probability of Type 2 error occurring is

Depends on the difference btwn the hypothesized and actual values of the

population parameter

When the difference is large, is small

(1- ) is the power of a statistical test, probability that you will

reject the null when it is false and should be rejected

you can reduce the probability of type 2 error by increasing the sample

size, allowing to detect small differences

however when reduce you increase and vice cersa

when standard deviation is know, you use the Z test for the mean if population is normally

distributed

o if population is not normally distributed, you can still use Z test if the sample size

is large enough for the Central Limit Theorem to take effect

two-tail test: when rejection region is divided into two tails of the distribution

Chapter 9: Fundamentals if Hypothesis Testing: One-Sample Tests

p-value: probability of getting a test statistic equal to or more extreme than the sample

result given that null is true

o aka observed level of significance

decisions rules for rejecting null in p-value approach:

o if the p-value is greater than or equal to , do not reject the null

o if the p-value is less than , reject the null

Chapter 9: Fundamentals if Hypothesis Testing: One-Sample Tests

t test is robust, meaning that it does not lose power if the shape of the population

departs somewhat from the normal distribution as long as the sample size is large

One-Tail Tests

have an alternative hypothesis that focuses on a particular direction

Z Test of Hypothesis for the Proportions

sample proportion, p=X/n

if the numbers of events of interest(X) and the number of events that are not of interest

(n-X) are each at least five, you can use the Z test for the propotion

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