Testing of Hypothesis

LECTURE-1
Introduction
Problem of Testing of Hypothesis

In many experimental studies estimation of the numerical value of a parameter

may not be of direct interest to us. Instead, we may be interested in making decisions
about population on the basis of sample information. For example, we may wish to
decide on the basis of sample data whether a new pesticide is really effective in
controlling incidence of pest as compared to the old one, a new variety of paddy will
give better yield than a ruling variety, a particular crop management method will result
in better yield of a crop, the cross fertilization of two specific crop verities will result in
a better hybrid, etc. For this we need statistical tests to support such decisions because
results of experiments are usually not clear cut.

Exigency of testing of hypothesis

There is always some contention about the value(s) of a parameter. When

parametric value is unknown, we estimate them through sample values. If the sample
value is exactly the same as per our contentions, there is no hitch in accepting it. And, if
it is far from our contention, there is no reason to accept it. But the problem arises when
the sample provides a value which is neither exactly equal to the parametric value, nor
too far. In that situation one has to develop some procedure(s) which enable one to
decide whether to accept a contended (hypothetical) value or not on the basis of sample
values. Such a procedure is known as testing of hypothesis

Statistical Hypothesis

In attempting to reach decisions about the populations, it is useful to make

assumptions or guesses about the population involved called hypothesis. When the
assumption or statement about a phenomenon occurring under certain conditions is
formulated as a proposition it is called scientific hypothesis. We can construct criteria
by which a scientific hypothesis is either rejected or provisionally accepted. For this
purpose, the scientific hypothesis is translated in to a statistical language. The translated
from of scientific hypothesis is known as statistical hypothesis.

Example: The yield of a new paddy variety will be 3500 kg per hectare is a scientific
hypothesis while the random variable (yield of paddy) is distributed normally with
mean 3500 kg per hectare is a statistical hypothesis. If the statistical hypothesis is an
assertion about a parameter of a population then it is known as parametric statistical
hypothesis.

Test of a Statistical Hypothesis

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 A test of a statistical hypothesis is a rule or procedure which makes one to
decide about the acceptance or rejection of the hypothesis.

Simple and composite hypothesis

If a hypothesis specifies the distribution of population completely is known as

simple hypothesis, otherwise the hypothesis is known as composite hypothesis.

Example: For a normal distribution N (μ, σ2) with σ2 known, the hypothesis μ = 20 is a
simple while μ ≠ 20 or μ < 20 or μ > 20 are composite hypotheses.

Null and Alternative hypothesis

A hypothesis regarding the parametric values which is tested for its possible
rejection under the assumption that it is true is called as null hypothesis and is generally
denoted by Ho. Alternative hypothesis is a statement about the parameter which
provides an alternative to the null hypothesis within the range of pertinent values of
parameter. It is denoted by H1.
Example: Ho: μ = 20 H1: μ ≠ 20

Test
A test is a procedure which decides whether to reject or do not reject H o. In
case H0 is rejected then the alternative hypothesis is accepted

Errors in decision making

By performing a test we make a decision on the hypothesis by accepting or

rejecting the null hypothesis Ho. In the process we make a correct decision on H o or
commit one of two kinds of errors. We may reject H0 when, in fact, it is true. This error
in decision is known as Type I error. We may accept H 0 when, in fact, it is not true. It is
known as type-II error.
The consequences of type-I and type-II errors are different. In some cases type-I
error may be more serious than type-II error and in some cases it may be vice versa.
Generally we find type-II error is more serious than type-I error. Hence the probability
of committing type-I error (α) may be relatively large than the probability of
community type-II error (β).
The relationship between Type-I and Type-II errors is that if one increases the
other will decrease therefore both the errors can’t be controlled simultaneously. Hence
effort is made to minimize for certain fixed risk of type-I error (usually .01 or .05 or
even more) in advance.

Critical Region (CR) and Acceptance Region (AR)

Testing of statistical hypothesis is made on the basis of division of sample space

in two mutually exclusive regions. One region for acceptance and other for rejection of

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Ho as soon as the value of statistic falls in this part of the sample space is called
rejection or critical region and the other part is known as acceptance region. In other
words, if the calculated value of a test statistic is more than the critical values in
magnitude we reject Ho. The critical values for different distributions are available from
statistical table.

Level of Significance

The maximum probability of committing type-I error which we are willing to

risk is known as level of significance. Usually 5% or 1% are employed.

Power of the test

The power of a test or of a critical region is the probability of rejecting H o when

Ho is false and that is equal to 1-P (Type-II) or 1- β.

Most powerful test (MPT)

Of all the critical regions having the same size (α) the CR with minimum β is
called the best CR and the corresponding test is called the most powerful test.

One tail and two tailed tests

If the total critical region is divided at both end of the frequency/ probability
curve, the test is called two tailed test and if whole critical region is at one end, the test
is called one tail test. The decision about one/two tailed test is taken on the basis of the
form of alternative hypothesis.

Test Statistic

The sampling distribution of a statistic such as Z, t, F and χ 2 are known as test

criterion or test statistic. Test statistic measures the extent to which the sample departs
from the null hypothesis in some relevant aspects. The theoretical value of the test
statistic is the critical value. If the value of test statistic based on sample data
(calculated value) exceeds its theoretical value is said to be significant and the H 0
rejected. The choice of test statistic depends on the nature of the variable, the statistic
involved and the sample size.

Steps in testing of hypothesis

1. Formulation of Null and Alternative hypotheses

2. Specification of the level of significance
3. Selection of test statistic and its computation
4. Finding out the critical value from tables using the level of significance,
sampling distribution and its degree of freedom
5. Determination of the critical region

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6. Decision about the null hypothesis based on the critical region
7. Conclusion in such a way that it answers question in hand