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Hypothesis PDF
Hypothesis PDF
“HYPOTHESIS TESTING”
∝ = Level of Significance SS = Sample Statistic
TS = Test Statistics CV = Critical Value
TV = Table Value SE = Standard Error
Statistical Significance vs
Economical Significance
Statistically significant results
may not necessarily be
economically significant.
A very large sample size may
result in highly statistically
significant results that may be
quite small in absolute terms.
σ2 known x −µ 0
•
z= Ho:µ ≤ µ0 vs Ha: µ >µ0
• N. dist. σ n •
• N. dist.
n
( x1 − x2 ) − ( µ1 − µ 2 )
t( + −
=
n n 2
1 2
)
1 1
sP +
n1 n2 • Ho:µ1 - µ2 ≤ 0 vs Ha: µ1 -µ2 > 0
Unknown variances
where;
Equality of the assumed equal. Reject H0 if TS > TV
( n1 − 1) s1 + ( n2 − 1) s 2
2 2
Means of Two sP =
n1 + n2 − 2
Normally • Ho:µ1 - µ2 > 0 vs Ha: µ1 -µ2 < 0
df = n1+n2 - 2
Distributed Reject H0 if TS < -TV
Populations based
on Independent Ho:µ1 - µ2 = 0 vs Ha: µ1 - µ2 ≠ 0
( x1 − x 2 ) − ( µ1 − µ 2 ) •
Unequal unknown t=
Samples. Reject H0 if | TS | > TV
s12 s 22
variances. +
n1 n2
= ;
>
the population.
̅ = . ∑
1
Decision Rule Non-Parametric Test
Decision Rule Don’t consider a particular
Reject H0 if TS > TS
Reject H0 if TS > TV population parameter.
S
√n
S = Chi-Square Or
Distribution F- Distribution Have few assumptions
∑ ( − ̅ )
Right skewed. regarding population.
=
Asymmetrical.
−1
Bounded from below Bounded by zero.
by zero.
Chi-Square values
can never be –ve.
Decision Rule
H0: µd ≤ µd0 vs Ha: µd > µd0
Reject H0 if TS > TV.
H0: µd ≥ µd0 vs Ha:µd < µd0
Reject H0 if TS <-TV
H0: µd = µd0 vs Ha: µd ≠ µd0
Reject H0 if TS > TV.