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Basic concepts in

HYPOTHESIS TESTING

Submitted by: Almira C. Romero

11- Patella

Lesson

Outline:

a. Definition of statistical hypothesis

b. Consequences of making a decision

c. The difference of null hypothesis

from alternative hypothesis

d. Two possible errors that could be

committed in a test of hypothesis

DEFINITION OF

STATISTICAL

HYPOTHESIS

Definition of statistical hypothesis

estimation or evaluation of a statement or

claim about a parameter or a distribution.

Evaluation of a claim about a parameter or a

distribution is done through a statistical test

of hypothesis.

Definition of statistical hypothesis

and its possible consequences

further

“The country will experience El Niño

phenomenon in the next few months.”

Definition of statistical hypothesis

2. There is a possibility that El Niño phenomenon

may not occur.

3. The effects of El Niño phenomenon are devastating

to the country.

4. Some of the consequences of the El Niño phenomenon

are tolerable while other consequences are not.

5. The validity of the statement could be tested based

on some empirical facts.

Definition of statistical hypothesis

true or false. Such claim could be referred to

as a statistical hypothesis and is usually

expressed in terms of the value of a

parameter or the distribution of the

population values.

Definition of statistical hypothesis

A statistical hypothesis is an assertion or

conjecture about the distribution of one or more

random variables.

If a statistical hypothesis completely specifies the

distribution, it is referred to as a

simple hypothesis;

if not, it is referred to as a

composite hypothesis.

CONSEQUENCES OF

MAKING A DECISION

Consequences of making a decision

one can do with the statement

These actions are either to accept the

statement or to reject it. These actions are

brought about by a decision whether the

statement is true or false.

Consequences of making a decision

Possible consequences of accepting that the statement

is true include:

(a) increase the importation of rice in anticipation

of supply shortage;

(b) buy materials for water storage;

(c) use drought-resistant varieties of rice;

(d) invest in programs to make Filipinos ready; and the like.

when the statement is rejected because we think it is false,

possible consequences are

(a) We are not prepared for rice and water shortage;

(b) Farmers experience great loss on production;

Consequences of making a decision

are severe. Experiencing a few days of water shortage is tolerable

but having rice shortage for a month or two is unbearable.

decision. If the consequences of accepting the claim that El Niño

phenomenon is going to happen are tolerable, then we may not

reject the pronouncement.

Consequences of making a decision

random sample of observations with a given

level of probability of committing an error in

making the decision, whether the hypothesis is

true or false.

DIFFERENCE OF NULL

HYPOTHESIS FROM

ALTERNATIVE

HYPOTHESIS

difference of null hypothesis from

alternative hypothesis

In hypothesis testing, we first formulate the

hypotheses to be tested.

null & alternative hypothesis

difference of null hypothesis from

alternative hypothesis

NULL HYPOTHESIS

the null hypothesis generally expresses the idea of no

difference

difference of null hypothesis from

alternative hypothesis

statement that the value of the parameter is, in

fact, equal to the claimed value. We assume that

the null hypothesis is true until we

prove that it is not.

DIFFERENCE OF NULL HYPOTHESIS FROM

ALTERNATIVE HYPOTHESIS

ALTERNATIVE

ALTERNATIVE HYPOTHESIS

HYPOTHESIS

expresses the idea of some

difference

difference of null hypothesis from

alternative hypothesis

statement that the value of the parameter differs

in some way from the null hypothesis.

The alternative hypothesis can use the

symbols, �� ≠

difference of null hypothesis from

alternative hypothesis

of no change. Thus, a statement of equality or

one which involves the equality is usually

considered in the null hypothesis.

difference of null hypothesis from

alternative hypothesis

include

(a) equality;

(b) less than orequal; and

(c) greater than or equal.

difference of null hypothesis from

alternative hypothesis

or distribution of the population values. Usually,

the parameter is represented by a symbol, like

for the population mean, we use μ.

difference of null hypothesis from

alternative hypothesis

be stated using symbols as

difference of null hypothesis from

alternative hypothesis

3. The null and alternative hypotheses are

complementary

and must not overlap.

(a) �0 : Parameter = Value versus �1: Parameter ≠ Value;

(b) �0 : Parameter = Value versus �1 : Parameter < Value;

(c) �0 : Parameter = Value versus �1 : Parameter > Value;

(d) �0 : Parameter ≤ Value versus �1 : Parameter > Value;

(e) �0 : Parameter ≥ Value versus �1 : Parameter < Value

difference of null hypothesis from

there are twoalternative hypothesis

actions that one can make on the

hypothesis. One

can either reject or fail to reject (accept) a

Action hypothesis.

Hypothesis is TRUE Hypothesis is FALSE

Reject the hypothesis Error Committed No Error Committed

Fail to reject (Accept) No Error Committed Error Committed

the hypothesis

difference of null hypothesis from

alternative hypothesis

reject a false hypothesis and when we

fail to reject a true hypothesis.

TWO POSSIBLE

ERRORS IN A TEST OF

HYPOTHESIS

Types of error

true hypothesis and such error is called

a Type I error.

Types of error

hypothesis, we are committing a

Type II error.

Types of error

TYPE

TYPE II ERROR

ERROR

incorrectly rejecting a true null

hypothesis (false negative)

Types of error

TYPE II ERROR

TYPE ERROR

denoted by α “alpha”

Types of error

TYPE II ERROR

incorrectly failing to reject an

untrue null hypothesis

(false positive)

Types of error

TYPE II ERROR

denoted by β “beta”

Key points

- A statistical hypothesis is an assertion or

conjecture about the distribution of one or more

random variables.

with the statement. These actions are

either to accept the statement or to reject it.

Key points

- There are two kinds of a statistical hypothesis:

- Null hypothesis is denoted as �0

- Alternative hypothesis is denoted as �1

-The null and alternative hypotheses are

complementary and must not overlap.

Key points

- There are two basic kinds of error:

Type I Error (α ): incorrectly rejecting a true null

hypothesis (false negative);

an untrue null hypothesis (false positive)

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