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Hypothesis
A hypothesis is an assumption or a statement that may or may
not be true
The hypothesis is tested on the basis of information obtained
from a sample
Instead of asking, for example, what the mean assessed value
of an apartment in a multistoried building is, one may be
interested in knowing whether or not the assessed value equals
some particular value, say Rs.80 lakh
Example whether a new drug is more effective than the
existing drug based on the sample data?
Example whether the proportion of smokers in a class is
different from 0.30?
Null Hypothesis
The hypotheses that are proposed with the intent of receiving a
rejection for them are called null hypotheses
This requires that we hypothesize the opposite of what is
desired to be proved
For example, if we want to show that sales and advertisement
expenditure are related, we formulate the null hypothesis that
they are not related
If we want to prove that the average wages of skilled workers
in town 1 is greater than that of town 2, we formulate the null
hypotheses that there is no difference in the average wages of
the skilled workers in both the towns
A null hypothesis is denoted by H0
Alternative Hypothesis
Rejection of null hypotheses leads to the acceptance of
alternative hypotheses
The rejection of null hypothesis indicates that
Decision
sample
based
on
H0 is true
H0 is false
Reject H0
Type-1 error
Correct Decision
Accept H0
Correct Decision
Type-2 error
Formulation of Hypothesis
While designing any hypotheses, there are a few criteria that the
researcher must fulfill. These are:
It must be formulated in simple, clear, and declarative form
Testing of Hypothesis
The following steps are followed in the testing of a hypothesis: