Chapter No.

12

Hypothesis Testing

Hypothesis Testing
What is a Hypothesis?
A hypothesis is an empirically-testable statement about a relationship involving two or more variables. Examples of hypotheses from the social sciences include: Investors seek low-risk investments in economic downturns. Students' feelings of connectedness to educational area an essential element of their academic success.

They are testable statements about relationships between different factors.

Characteristic of a good hypothesis

It should be clear and precise so that inferences drawn are reliable it should be capable of being tested. A hypothesis is testable if other deductions can be made from it which, in turn can be confirmed or disproved by observations

Hypothesis should state relationship between variables

Hypothesis should be limited in scope and must be specific. A narrower hypothesis is more testable Hypothesis should be stated as far as possible in most simple terms so that it is easily understandable by all concerned

Hypothesis Testing
Types of Hypothesis
Null Hypothesis : H0 If we are comparing two attributes or quantities and assume that both are equal then this hypothesis is known as Null Hypothesis Alternative Hypothesis : H1 Other than Null Hypothesis

Hypothesis Testing
Types of Hypothesis
Null Hypothesis : H0 A type of hypothesis used in statistics that proposes that no statistical significance exists in a set of given observations. The null hypothesis attempts to show that no variation exists between variables, or that a single variable is no different than zero. It is presumed to be true until statistical evidence nullifies it for an alternative hypothesis. Alternative Hypothesis : H1 Other than Null Hypothesis

Hypothesis Testing
A question?
Are the English more intelligent than the Dutch?
Null Hypothesis (H0): H0 Null hypothesis: The English and Dutch have the same mean IQ

Alternate Hypothesis (H1):

In this, against Null hypothesis, we are considering one attribute or quantity to be superior than the other than it is known as Alternate Hypothesis The mean IQ of the English is greater than the Dutch

Hypothesis Testing
Error in Hypothesis Testing
Type I Error
Type I error, also known as an "error of the first kind,a "false positive": the error of rejecting a null hypothesis when it is actually true. It is represented by an error e.g. Telling a patient he is sick when in fact he is not In other words, a Type I error indicates "A Positive Assumption is False"

Type II Error
Type II error, also known as an "error of the second kind", "false negative": the error of failing to reject a null hypothesis when in fact we should have rejected the null hypothesis. It is represented by error e.g. Telling a patient he is not sick when in fact he is.

Hypothesis Testing
Error in Hypothesis Testing

Decision Accept Reject

H0 is True Correct Decision Type II Error

H0 is False Type I Error

error
Correct Decision

error

Hypothesis Testing
Error in Hypothesis Testing

Hypothesis Testing

Types of Hypothesis Testing

1. Parametric test of Hypothesis 2. Non - Parametric test of Hypothesis

Hypothesis Testing
Types of Hypothesis Testing
1. One - Tail Test 2. Two - Tail Test
1. One - Tail Test a) Right Tail Test b) Left Tail Test

Hypothesis Testing
Hypothesis Testing : One - Tail Test : Right
When the alternative hypothesis H1 is one-sided like > H0 or, < H0 then the rejection region is taken only on one side of the sampling distribution. It is called one-tailed test or one-sided test. When H1 is one-sided to the right like > H0 , the entire rejection region equal to Is taken in the right end of the sampling distribution. The test is called one-sided to the right.

Hypothesis Testing
Hypothesis

Hypothesis Testing
Hypothesis : One - Tail Test : Left
If the alternative hypothesis is one-sided to the left like < H0 , the entire rejection region equal to is taken on the left tail of the sampling distribution. The test is called one-sided or onetailed to the left. The critical value is which cuts off the area equal to to its left. The critical region is and is shown in Figure. For some important values of , the critical values of Z for twotailed and one tailed tests are given below:

Hypothesis Testing
Hypothesis

Hypothesis Testing
Hypothesis : Two - Tail Test
When the rejection region is taken on both ends of the sampling distribution, the test is called two-sided test or twotailed test. When we are using a two-sided test, half of the rejection region equal to is taken on the right side and the other half equal to is taken on the left side of the sampling distribution. Suppose the sampling distribution of the statistic is a normal distribution and we have to test the hypothesis against the alternative hypothesis which is two sided.
is rejected when the calculated value of Z is greater than or it is less than. Thus the critical region is or it can also be written as

When

is rejected, then H1 is accepted.

Hypothesis Testing
Hypothesis : Two - Tail Test

Hypothesis Testing
Hypothesis