Shree Ganeshay Namah Shreeji

Index Sr no.
1. 2. 3. 4. 5 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Particulars
introduction Definition Characteristics Process Types of hypothesis Null and alternative hypothesis One tail and two tail Type I and Type II error Level of Significance Rejection and non-rejection criteria Hypothesis testing of one mean Hypothesis testing of two mean Hypothesis testing of one proportion Hypothesis testing of two proportion Hypothesis testing of correlation co-efficient

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Shree Ganeshay Namah Shreeji

Hypothesis
Introduction:
Hypothesis may be defined as a proposition or a set of proposition set forth as an explanation for the occurrence of some specified group of phenomena either asserted merely as a provisional conjecture to guide some investigation or accepted as highly probable in the light of established facts. Quite often a research hypothesis is a predictive statement, capable of being tested by scientific methods, that relates an independent variable to some dependent variable. In fact, many experiments are carried out with the deliberate object of testing hypotheses. Decision-makers often face situations wherein they are interested in testing hypotheses on the basis of available information and then take decisions on the basis of such testing

Definition:
A hypothesis is a conjectural statement of the relation between two or more variables. (Kerlinger, 1956) Hypotheses are single tentative guesses, good hunches assumed for use in devising theory or planning experiments intended to be given a direct experimental test when possible. (Eric Rogers, 1966) Hypothesis is a formal statement that presents the expected relationship between an independent and dependent variable.(Creswell, 1994) A hypothesis is a logical supposition, a reasonable guess, an educated conjecture. It provides a tentative explanation for a phenomenon under investigation." (Leedy and Ormrod, 2001).

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Characteristics of Hypothesis:
1. A Hypothesis must be conceptually clear and precise - Concepts should be clearly defined - The definitions should be commonly accepted - The definitions should be easily communicable 2. Hypothesis should state relationship between variables 3. The hypothesis should have empirical reference - Variables in the hypothesis should be empirical realities - If they are not it would not be possible to make the observation and ultimately the test 4. The Hypothesis must be specific and limit in scope - Place, situation and operation 5. A hypothesis should be related to available techniques of research - Either the techniques are already available or - The researcher should be in a position to develop suitable techniques 6. The hypothesis should be related to a body of theory - Hypothesis has to be supported by theoretical argumentation - It should depend on the existing body of knowledge 7. Hypothesis should be test with amenable time In this way - the study could benefit from the existing knowledge and - later on through testing the hypothesis could contribute to the reservoir of knowledge

Shree Ganeshay Namah Shreeji

Steps in hypothesis testing:

Problem Definition

Clearly state the null and alternate hypothesis

Choose the relevant test and the appropriate probability distribution Determine the significance level Choose the critical value
Determine the degree of freedom Decide if one tail or two tail test

Compare test statistics and critical vaue

Does the test statistics fall in the critical region?

Yes Reject null hypothesis

No Accept null Hypothesis

Shree Ganeshay Namah Shreeji

Procedure of Hypothesis Testing:

Testing a hypothesis refers to verifying whether the hypothesis is valid or not. Hypothesis testing attempts to check whether to accept or not to accept the null hypothesis. The procedure of hypothesis testing includes all the steps that a researcher undertakes for making a choice between the two alternative actions of rejecting or accepting a null hypothesis. The various steps involved in hypothesis testing are as follows: (i) Making a Formal Statement: This step involves making a formal statement of the null hypothesis (H0) and the alternative hypothesis (Ha). This implies that the hypotheses should be clearly stated within the purview of the research problem. For example, suppose a school teacher wants to test the understanding capacity of the students which must be rated more than 90 per cent in terms of marks, the hypotheses may be stated as follows: Null Hypothesis H0 : = 100 Alternative Hypothesis Ha : > 100 (ii) Selecting a Significance Level: The hypotheses should be tested on a pre-determined level of significance, which should be specified. Usually, either 5% level or 1% level is considered for the purpose. The factors that determine the levels of significance are: (a) the magnitude of difference between the sample means; (b) the sample size: (c) the variability of measurements within samples; and (d) whether the hypothesis is directional or non-directional (Kothari, 1988). In sum, the level of significance should be sufficient in the context of the nature and purpose of enquiry. (iii) Deciding the Distribution to Use: After making decision on the level of significance for hypothesis testing, the researcher has to next determine the appropriate sampling distribution. The choice to be made generally relates to normal distribution and the tdistribution. The rules governing the selection of the correct distribution are similar to the ones already discussed with respect to estimation. (iv) Selection of a Random Sample and Computing an Appropriate Value: Another step involved in hypothesis testing is the selection of a random sample and then computing a suitable value from the sample data relating to test statistic by using the appropriate distribution. In other words, it involves drawing a sample for furnishing empirical data. (v) Calculation of the Probability:

Shree Ganeshay Namah Shreeji

The next step for the researcher is to calculate the probability that the sample result would diverge as far as it can from expectations, under the situation when the null hypothesis is actually true. (vi) Comparing the Probability: Another step involved consists of making a comparison of the probability calculated with the specified value for , the significance level. If the calculated probability works out to be equal to or smaller than the value in case of onetailed test, then the null hypothesis is to be rejected. On the other hand, if the calculated probability is greater, then the null hypothesis is to be accepted. In case the null hypothesis H0 is rejected, the researcher runs the risk of committing the Type I error. But, if the null hypothesis H0 is accepted, then it involves some risk (which cannot be specified in size as long as H0 is vague and not specific) of committing the Type II error.

Shree Ganeshay Namah Shreeji

Types of hypothesis:
1. Research Hypothesis: A research hypothesis is a statement of what the researcher believes will be the outcome of the experiment or a study. Some examples of the research hypothesis in business might include: a. Older workers are more loyal to a company b. The implementation of a six sigma quality approach in manufacturing will result in greater productivity. Virtually all inquisitive, thinking business have similar research hypothesis concerning relationships, approaches, and techniques in business. However, to formally test research hypothesis, it is generally best to state them as statistical hypothesis. 2. Statistical Hypothesis: In order to scientifically test research hypothesis, a more formal hypothesis structure needs to be set up using statistical hypothesis. All statistical hypotheses consist of two parts, a null hypothesis and alternate hypothesis. 3. Sustainable hypothesis A business researcher reaches a conclusion based on the data obtained in the study. If the null hypothesis is rejected and therefore the alternative hypothesis is accepted, it is common to say that a statistically significant result has been obtained. A substantive result is when the outcome of a statistical study produces results that are important to the decision maker. The importance to the researcher will vary from study to study.

Shree Ganeshay Namah Shreeji

Null Hypothesis:
The null hypothesis states that null condition exists; that is nothing new is happening, the old theory is true, the old standard is correct, and system is in control. The null hypothesis is an experiment of the independent variable has no effect on the dependent variable

Alternate Hypothesis:
On the other hand states that the new theory is true, there r new standard, the system is out of control and something is happening. The alternate to the null hypothesis is the hypothesis that the independent variable does have an effect on the dependent variable.

Shree Ganeshay Namah Shreeji

One tail n two tails:

A one sided test is a statistical hypothesis test in which the values for which we can reject the null hypothesis, Ho are located entirely in one tail of the probability distribution One tailed tests are always directional, and the alternative hypothesis uses either the greater than (>) or less than (<) sign. In one tailed problems, the researcher is trying to prove that something is in order, younger, higher, lower, more, less, greater, and so on. These words are considered directional words in that they indicate the direction of the focus of the research. Without these words, the alternative hypothesis of a one tailed test cannot be established

Shree Ganeshay Namah Shreeji

Two-sided test is a statistical hypothesis test in which the values for which we can reject the null hypotheses, Ho are located in both tails of the probability. Two tailed tests always use = and in the statistical hypothesis and directionless in that the alternative hypothesis allows for either the greater than (>) or less than (<) possibility.

Shree Ganeshay Namah Shreeji

Type I and type II error:

In the context of testing of hypotheses, there are basically two types of errors we can make. We may reject H0 when H0 is true and we may accept H0 when in fact H0 is not true. Accept Ho Reject Ho Ho (true) Correct Decision Type I error ( error) Ho (False) Type II error ( error) Correct Decision

Type one error is committed by rejecting a true null hypothesis. Type I error rejecting a null hypothesis when it is true is denote by . Thus, = probability of type I error i.e probability of rejecting Ho, when Ho is true.

Type II error is committed when we accept a wrong or incorrect hypothesis. Type II error accepting a null hypothesis when it is not true is denoted by . Thus, = probability of type II error i.e. probability of accepting Ho, when Ho is not true.

Shree Ganeshay Namah Shreeji

Level of significance:
This is a very important concept in the context of hypothesis testing. It is always some percentage (usually 5%) which should be chosen with great care, thought and reason. In case we take the significance level at 5 per cent, then this implies that H0 will be rejected when the sampling result (i.e., observed evidence) has a less than 0.05 probability of occurring if H0 is true. In other words, the 5 per cent level of significance means that researcher is willing to take as much as a 5 per cent risk of rejecting the null hypothesis when it (H0) happens to be true. Thus the significance level is the maximum value of the probability of rejecting H0 when it is true and is usually determined in advance before testing the hypothesis.

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Rejection and non-rejection criteria:

Given a hypothesis H0 and an alternative hypothesis Ha, we make a rule which is known as decision rule according to which we accept H0 (i.e., reject Ha) or reject H0 (i.e., accept Ha). For instance, if (H0 is that a certain lot is good (there are very few defective items in it) against Ha) that the lot is not good (there are too many defective items in it), then we must decide the number of items to be tested and the criterion for accepting or rejecting the hypothesis. We might test 10 items in the lot and plan our decision saying that if there are none or only 1 defective item among the 10, we will accept H0 otherwise we will reject H0 (or accept Ha). This sort of basis is known as decision rule.

Shree Ganeshay Namah Shreeji

Hypothesis testing About single Mean:

Step-by-Step 1) Formulate Hypotheses 2) Select appropriate formula 3) Select significance level 4) Calculate z or t statistic 5) Calculate degrees of freedom (for t-test) 6) Obtain critical value from table 7) Make decision regarding the Null-hypothesis

Shree Ganeshay Namah Shreeji

Shree Ganeshay Namah Shreeji