HYPOTHESIS TESTING

PRESENTED BY:-

Richa Rekha Ashok Sunny

INTRODUCTION
HYPOTHESIS:A hypothesis is a tentative proposition relating to certain phenomenon, which the researcher wants to verify when required.

TYPES OF HYPOTHESIS There are several basis on which hypothesis are classified:y Descriptive hypothesis y Relational hypothesis .

Why youngster prefer ´xµ soft drinks The above tell us the characteristics of some entity. an individual or even an organization. EXAMPLE1.DESCRIPTIVE HYPOTHESIS y This describes some characteristics of an object . a situation . 2.Students from autonomous institutions are placed faster than other institutions. .

y .RELATIONAL HYPOTHESIS This describes relationship between two variables y EXAMPLE 1. Why rich people shop at lifestyle? 2. Rate of attrition is high in those jobs where there is night shift working.

Null hypothesis is very exact.NULL HYPOTHESIS WHAT IS NULL HYPOTHESIS ? y This hypothesis state that there is no difference between the parameter and the statistic that is being compared. Null hypothesis are framed for testing statistical significance. .There is no relationship between marks obtained in the examination and the success of the same student in the corporate world. y Example :.

Case studies THEORY. Observation 3.SOURCES OF HYPOTHESIS Hypothesis can be derived from many sources:1.We start of from a general premise and then formulate hypothesis. Past experience 4. . Theory 2.Theory on the subject can act as a source of hypothesis.

This is indirect method of attitude measurement.People·s behaviour is observed . In this method we use observed behaviour to infer the attitudes.Contd. OBSERVATION. .Case studies can be used as a source for hypothesis.. CASE STUDIES. PAST EXPERIENCE. Direct observation is used to get insights into research behavior and other related issues.Here researcher goes by past experience to formulate the hypothesis.

. What is to be studied is clear to the researcher through hypothesis. if it is found to be true becomes a part of accepted theory. Hypothesis formulated and tested. The type of research be it exploratory. descriptive or causal is decided by the hypothesis.Role of Hypothesis      Hypothesis helps to guide the investigator in the right direction. Statistical techniques is determined.

 Whether possible to test or not?  Whether µ what is to be tested is clear or not?  Whether appropriate statistical techniques are available for testing?  Whether logical derivation is possible or not?  Whether bias or subjectively is eliminated or not? objectively should be sole criteria?  Whether the hypothesis is simple or not?  Adequate theoretical backing is a prerequisite for hypothesis testing's.  Clarity .Characteristics of Hypothesis of concepts.

A parameter is a characteristic of the population.What is a Hypothesis? yA hypothesis is an assumption about the population parameter. The parameter must be identified before analysis. I assume the mean CGPA of this class is 3. . like its mean or variance.5! © 1984-1994 T/Maker Co.

The grade point average of juniors is at least 3.0 (H0: Qu 3. H0 ‡ y y States the Assumption (numerical) to be tested e. (Similar to the notion of innocent until proven guilty) ‡Refers to the Status Quo ‡Always contains the µ = µ sign ‡The Null Hypothesis may or may not be rejected.g.The Null Hypothesis.0) ‡ Begin with the assumption that the null hypothesis is TRUE. .

The grade point average of juniors is less than 3.0 (H1: Q < 3.0) hallenges the Status Quo ‡ Never contains the µ=µ sign ‡ The Alternative Hypothesis may or may not be accepted ‡ Is generally the hypothesis that is believed to be true by the researcher ‡ .The Alternative Hypothesis. H1 ‡ Is the opposite of the null hypothesis e.g.

0) State its opposite. the Alternative Hypothesis (H1: Q < 3.Identify the Problem y Steps: State the Null Hypothesis (H0: Q u3.0) x x Hypotheses are mutually exclusive & exhaustive Sometimes it is easier to form the alternative hypothesis first. .

(Null Hypothesis) The Sample Population I X ! 20 $ Q !50? No. not likely! REJECT Null Hypothesis Mean Is 20 Sample .Hypothe i Te ting Proce Assume the population mean age is 50.

20 Q = 50 Sample Mean H0 ...Reason for Rejecting H0 Sampling Distribution It is unlikely that we would get a sample mean of this value . ... . Therefore... if in fact this were the population mean. we reject the null hypothesis that Q = 50.

0. 0.10 ‡ ‡ ‡ Selected by the Researcher at the Start Provides the Critical Value(s) of the Test .05.Level of Significance. E Designated E (alpha) Typical values are 0.01.

E and the Rejection Region H0: Q u3 H1 : Q < 3 Rejection Regions 0 E Critical Value(s) H0 : Q e 3 H1 : Q > 3 0 E E/2 H0: Q !3 H1 : Q { 3 0 .Level of Significance.

1 vs. 2 Sided Tests Two-sided test No a priori reason 1 group should have stronger effect Used for most tests y One-sided test Specific interest in only one direction Not scientifically relevant/interesting if reverse situation true y .

and Two-Tail OneTwoTests« One-Tail Test (left tail) Two-Tail Test One-Tail Test (right tail) 11.Summary of One.20 .

Step 4:Test static . . Define and compute the test statistic under H0 Step5:Obtain the critical value and the critical region of the test statistic from appropriate tables.STEPS INVOLVED IN HYPOTHESIS TESTING y y y y y Step 1:Set up the null hypothesis Step 2:Set up the alternative hypothesis. Step 3:Choose level of significance.

. we reject Ho at the level of significance ¶ ·. we fail to reject Ho Step7:Write the conclusion of the test in simple language.. If the computed value of the test statistic lies outside the rejection region . . y y Step6: If the computed value of the test statistic lies in the rejection region . Cntd.Cntd.

y Reject Ho when it is true. y Accept Ho when it is false. y Accept Ho when it is true. .Types of errors y In any test procedure the four possible decisions are : y Reject Ho(null hypothesis) when it is false.

: when a = . the probability of rejecting true hypothesis is 1% y Type 1 &2 error can be reduced by : increasing the sample size.g. . y Type 2 error ( ) : hypothesis is not rejected when it is false.10 . y e.Two types of errors y Type 1 error ( ) : hypothesis is rejected when it is true.

Action Competent Retailer Correct decision Incorrect decision Error ( ) Incompetent Retailer Incorrect decision Error ( ) Correct decision Performance bonus is awarded Performance bonus is not awarded.Example of type 1 & type 2 error y Suppose a marketing company has 2 retailers with varying capabilities. .

Thank you .

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