HYPOTHESIS TESTING

 A STATISTICAL HYPOTHESIS IS A CLAIM

(BELIEF OR ASSUMPTION) ABOUT AN
UNKNOWN POPULATION PARAMETER VALUE.
THE METHODOLOGY THAT ENABLES A
DECISION-MAKER TO DRAW INFERENCES
ABOUT POPULATION CHARACTERISTICS BY
ANALYZING THE DIFFERENCE BETWEEN THE
VALUE OF SAMPLE STATISTIC AND THE
CORRESPONDING HYPOTHESIZED
PARAMETER VALUE IS CALLED HYPOTHESIS
TESTING.
THE STATISTIC USED TO TEST A
HYPOTHESIS IS CALLED A TEST
STATISTIC.
THE PROBABILITY LEVEL AT WHICH
THE DECISION-MAKER CONCLUDES
THAT OBSERVED DIFFERENCE
BETWEEN THE VALUE OF THE TEST
STATISTIC AND HYPOTHESIZED
PARAMETER VALUE CANNOT BE DUE
TO CHANCE IS CALLED THE LEVEL OF
SIGNIFICANCE OF THE TEST.
A GENERAL PROCEDURES FOR HYPOTHESIS
TESTING
STATE THE NULL HYPOTHESIS (H0)
AND ALTERNATIVE HYPOTHESIS (H1)
H0: μ = μ0
States the Assumption (numerical) to be
tested
e.g. The average number of maize
seedlings to be planted is at least 5
(H0: μ =5)
Begin with the assumption that the null
hypothesis is TRUE.
The Null Hypothesis may or may not be
rejected.
The Alternative Hypothesis H1
Is the opposite of the null hypothesis
e.g. The average number of maize
seedlings to be planted is less than 5
H1: μ >5
• Challenges the Status Quo
• Never contains the ‘=‘ sign
• The Alternative Hypothesis may or may
not be accepted
STATE THE LEVEL OF SIGNIFICANCE, α
(ALPHA) FOR THE TEST , 5% FOR SOCIAL
SURVEY, 1% FOR HEALTH/
DRUGS…ACCORDING TO UNITED NATIONS
• Defines Unlikely Values of Sample Statistic if Null
Hypothesis Is True
• Called Rejection Region of Sampling Distribution
• It is usually selected by the researcher at the start
• It provides the critical value of the test
ESTABLISH CRITICAL OR REJECTION REGION
If the value of the test statistic falls into the
acceptance
region, the null hypothesis is accepted; otherwise,
it is rejected.
CALCULATE THE SUITABLE TEST
STATISTIC

  REACH A CONCLUSION
 DEFINITION OF TERMS
 TWO-TAILED TEST
IF AN ALTERNATIVE HYPOTHESIS IS
SUCH THAT IT LEADS
TO TWO-SIDED ALTERNATIVES TO THE
NULL HYPOTHESIS, THAT IS THE
DIRECTION OF THE TEST IS NOT
STATED
IT IS SAID TO BE A TWO-TAILED TEST.
H0: μ = 5 VS H1: μ ≠ 5
 ONE-TAILED TEST

IF THE ALTERNATIVE HYPOTHESIS

PROVIDES ONE-SIDED ALTERNATIVE
TO H0, E.G., THAT IS THE DIRECTION
OF THE TEST IS STATED
H0: μ = 5 VS. H1: μ < 5 (LEFT-TAILED
TEST)
OR
H0: μ = 5 VS. H1: μ > 5 (RIGHT-TAILED
TEST)
 ERRORS IN HYPOTHESIS
TESTING
Type I error: Error of rejecting H 0

when it is true
Probability of Type I Error is α
Called Level of Significance

Type II error: Error of accepting H 0

when it is False Probability of Type

II Error Is β (Beta)
.
 HYPOTHESIS TESTING FOR
POPULATION PARAMETERS WITH
LARGE SAMPLES
• Hypothesis testing, which
involves large samples (n
≥30) is based on the
assumption that the
population from which the
sample is drawn has a
normal distribution.
 One-Tail Z Test for
Mean ( Known)
• Assumptions
– Population Is Normally Distributed
– If Not Normal, use large samples
– Null Hypothesis Has  or  Sign Only
• Z Test Statistic: x  x x
z 
x 
n
 EXAMPLES
• A company claims that a can of
watermelon seeds contain more than
368 grams of seeds? A random sample
of 25 boxes showed the mean 372.5
grams with standard deviation of 15.
Test at the a=0.05 level.
• H0:   368
• H1:  > 368
 Finding Critical Values:
One Tail
Standardized Normal Probability
What Is Z Given  = 0.05? Table (Portion)

.50
-.05 Z = 1 Z .04 .05 .06
.45 1.6 .5495 .5505 .5515
 = .05
1.7 .5591 .5599 .5608

0 1.645 Z 1.8 .5671 .5678 .5686

Critical Value =
1.645
1.9 .5738 .5744 .5750
 Example Solution: One
TailTest Statistic:
H0:   368
H1:  > 368
• = 0.025
•n = 25
•Critical Value: 1.645
Reject
Decision: Since Tabulated value is
.05 greater than calculated value, we
Do Not Reject the null hypothesis at 
= .05
Conclusion: No
0 1.645 Z Evidence True Mean
Is More than 368
 HYPOTHESIS TESTING FOR
POPULATION PARAMETERS
WITH SMALL SAMPLES
• When a sample size is
small (less than 30), the
central limit theorem does
not guarantee us to assume
that the sampling
distribution of a sample
statistic is normal.
 HYPOTHESIS TESTING FOR
DIFFERENCE OF TWO
POPULATION MEANS VALUES
• WITH
For INDEPENDENT
two normally SAMPLES
distributed populations, say
population- 1 and population- 2, let the mean
values of a common variable be μ and μ 1 2

respectively. The corresponding population

standard deviations are σ and σ respectively.
1 2

Let two independent random samples of small

size n and n be drawn from the first and second
1 2

populations respectively. Let the sample means

so calculated be and .
• Hypotheses
• H : μ = μ against H : μ ≠ μ
0 1 2 1 1 2