Hypothesis Testing

by
Dr. Rajesh Moharana

Department of Mathematics
School of Advanced Sciences
Vellore Institute of Technology
Vellore, India

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Hypothesis Testing

Hypothesis: A hypothesis is a statement about a population parameter.

It is an assumption made in order to arrive at a decision regarding the
population through a sample of the population. A hypothesis should be
specific, clear and precise. It should state as far as possible in mostly
single terms so that the same is easily understood by all. It should state
the relationship between variables.

Hypothesis Testing: It is a process of testing significance which con-

cerns with the testing of some hypothesis regarding parameter of the
population on the basis of a statistics from the population.

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Types of Hypothesis

To verify our assumption which is based on a sample study, we collect

data and find out the difference between the sample value and the popu-
lation value. In general, two types of hypothesis are constructed, namely,
null hypothesis and alternative hypothesis.

Null Hypothesis: The hypothesis formulated for the purpose of its re-
jection under the assumption that it is true is called the null hypothesis.
Null hypothesis is denoted by H0 .

Alternative Hypothesis: The negation of a null hypothesis is called

an alternative hypothesis. It is denoted by H1 . If the null hypothesis is
rejected, then the alternative hypothesis is accepted. The acceptance or
rejection of a null hypothesis is based on the sample study.

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Conti...
Suppose we want to test the hypothesis that the population mean is
equal to the hypothesized mean µ0 . Symbolically µ can be expressed as

H0 : µ = µ 0 .

The possible alternative hypothesis can be stated in one of the following

forms.

H1 : µ 6= µ0 , i.e, µ > µ0 or µ < µ0 (two − tailed test)

H1 : µ > µ0 (one − tailed test (Right − tailed test))

H1 : µ < µ0 (one − tailed test (Left − tailed test))
Computation of a Test Statistic: A test statistics is computed after
stating the null hypothesis. It is based on the appropriate probability
distribution. The test statistics is used to test whether the null hypothesis
H0 should be accepted or rejected.
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Level of Significance

The level of significance is an important concept in hypothesis testing.

It is always some percentage. The level of significance is the maximum
probability of rejecting a null hypothesis when it is true and is denoted
by α. The probability of making a correct decision is 1 − α. The level of
significance may be taken as 1% or 5% or 10% (i.e., α = 0.01 or 0.05
or 0.1). If we fix the level of significance at 5%, then the probability of
making type-I error is 0.05. This also means that we are 95% confident
of making a correct decision. When no level of significance is mentioned,
it is taken as α = 0.05.

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Critical Region

A region corresponding to a statistics which amounts to rejection of the

null hypothesis H0 is known as the critical region. It is also called as
the region of rejection. The critical region is the region of the standard
normal curve corresponding to a predetermined level of significance α.
The region under the normal curve which is not covered by the normal
curve is known as the acceptance region.

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Conti...

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Important Tests of Hypothesis

For the purpose of testing a hypothesis, several tests of hypothesis were

developed. They can be classified as
1 Parametric test
2 Non-parametric test
Parametric tests are also known as the standard distribution free tests of
hypothesis. The important parametric tests are
1 Z -test (for Large Samples)
2 t-test (for Small Samples)
3 F -test (for Small Samples)

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Z -test

Z -test is used for comparing the mean of a sample to some hypothesized

mean for the population in case of a large sample. It is also used when
the population variance is known. Z -test is also used for comparing the
sample proportion to a theoretical value of population proportion.

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Procedure for Hypothesis Testing
The main question in hypothesis testing is whether to accept the null
hypothesis or not to accept the null hypothesis. The following tests are
involved in hypothesis testing.
1. Stating of the hypothesis
The null hypothesis H0 , and the alternative hypothesis H1 are con-
structed in this step.
2. Identification of test statistics
For large samples, when population n’s standard deviation is known, the
z-test statistics is used.
3. Specify the level of significance
A very important concept in hypothesis testing is the level of significance.
It may be 1% or 5% or 10% (i.e., α = 0.01 or 0.05 or 0.1).
4. Determine the value of the test statistic.
5. Check whether the probability value is less than or equal to α and
accordingly reject the null hypothesis, or accept it.
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Critical Values

The value of the test statistics which separates the critical region and the
acceptance region is called critical value. It is also called the significant
value and is depend on
1 the level of significance and
2 the alternative hypothesis
The following table gives us the critical values of Z .

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Decision of rejecting the null hypothesis or not rejecting
the null hypothesis

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Test of Significance:Large Samples (Z -test)

Test of significance for single mean

Test of significance for difference of means of two large samples
Test of significance for a single proportion
Test of significance for difference of proportions

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References

Vijay K. Rohatgi and A.K. Md. Ehsanes Saleh (2003)

An Introduction to Probability and Statistics
Wiley Series in Probability and Statistics
Kapoor, V.K. and Gupta, S.C., (1980)
Fundamentals of Mathematical Statistics
Sultan Chand & Sons
Ronald E. Walpole, Raymond H. Myers, Sharon L. Myers and Keying Ye
(2012)
Probability & Statistics for Engineers & Scientists
Pearson Education
T Veerarajan (2017)
Probability - Statistics and Random Processes
McGraw Hill Education
Rao G. S. (2011)
Probability and Statistics for Science and Engineering
Universities Press

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 Thank You

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