HYPOTHESIS TESTING

A hypothesis is an assumption or a claim about some

characteristic of a population, which we should be
able to support or reject on the basis of empirical
evidence. For example, an electrical bulb manufacturing
company may claim that the average life of its bulb is at
least 1000 hours.

Hypothesis testing is the process of testing between

different alternatives. The alternatives have to be
mutually exclusive and exhaustive. Being mutually
exhaustive means that there should not be any
possibility of any other relationship between the
parameters.
In the example of the of the electric bulb manufacturer,
the following two options will have to be considered to
verify the manufacturer’s claim:
Average life of the bulb is greater than or equal to 1000
Average life of the bulb is less than 1000 hours.
We can see that these options are mutually exhaustive as
well exclusive.
Typically in hypothesis testing we have two options to
choose from. These are term as null hypothesis
And alternative hypothesis

Null hypothesis ( H0 ) is the presumption that is

accepted as correct unless there is a strong evidence
against it. It represents the status quo
Alternative hypothesis ( H1 ) is accepted when null
hypothesis is rejected .it is the negation of the status qou
situation.
The negation of the null hypothesis also means that
some corrective action is needed to ensure that
e.g the average life of bulbs is at least 1000 hours.
Significance Level ( P-value)
P value is a statistical measure that helps scientists
determine whether or not their hypotheses are correct. P
values are used to determine whether the results of their
experiment are within the normal range of values for the
events being observed. Usually, if the P value of a data
set is below a certain pre-determined amount (like, for
instance, 0.05), scientists will reject the "null hypothesis"
of their experiment - in other words, they'll rule out the
hypothesis that the variables of their experiment had no
meaningful effect on the results.
There is always aprobabilistic component involved in the
accept-reject decision in testing hypothesis.
The criterion that is used in accepting or rejecting a null
hypothesis is called the significance or the P-value
P-value represents the probability of concluding
(incorrectly)that there is a difference in your samples no
true difference exists. It is a stastitics calculated by
comparing the distribution of given samples data and an
expected distribution ( normal,t ,F,etc) and is dependent
upon the stastistical test being pperformed. e.g if two
samples are being compared in a t- test ,a P-value of
0.05 means that there is only 5% chance that you would
be wrong in concluding that the population are different
or 95% confident of making a right decision.

One-tailed and Two- tailed Tests

A directional hypothesis is tested with One-tailed test

whereas a non directional hypothesis is tested
with Two- tailed test.
The following three relationships are only possible
between any two parameters,

a) u1=u2

b) u1<u2

c) u1>u2

To be able to formulate mutually exclusive and exhaustive null and

alternative hypotheses from these relations we can choose either

b) or c) as alternative hypothesis and combine one of these two

with a) to formulate null hypothesis. Thus we have H0 and H1 as:

H0: u1,>=u2 OR u1,<=u2

H1: u1,<u2 OR u1,>u2
The above hypotheses are called directional hypotheses
and one tailed tests are done for their analysis.
If the null hypothesis is given by a) only and b) and c) are
combined to formulate alternative hypothesis we have
the following H0 and H1 as:

H0: u1, =u2

H1: u1, < u2 OR u1, > u2

The above hypotheses called non directional as we are only

concerned about the equality or non directional equality of a

relationship.
non directional hypothesis
non directional hypothesis
non directional hypothesis
directional hypothesis