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Hypothesis-Fall 20

The document defines key concepts in hypothesis testing: 1. There are two types of hypotheses - the null hypothesis (H0) and alternative hypothesis (H1). H0 is what one wants to disprove, while H1 is what one wants to prove. 2. Hypothesis testing involves a 5-step process: state hypotheses, select significance level, select test statistic, formulate decision rule, make a decision. 3. Common test statistics include z-test, t-test, and chi-square test. The test statistic is compared to the critical value based on the significance level to determine whether to reject the null hypothesis.

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138 views5 pages

Hypothesis-Fall 20

The document defines key concepts in hypothesis testing: 1. There are two types of hypotheses - the null hypothesis (H0) and alternative hypothesis (H1). H0 is what one wants to disprove, while H1 is what one wants to prove. 2. Hypothesis testing involves a 5-step process: state hypotheses, select significance level, select test statistic, formulate decision rule, make a decision. 3. Common test statistics include z-test, t-test, and chi-square test. The test statistic is compared to the critical value based on the significance level to determine whether to reject the null hypothesis.

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Hypothesis

HYPOTHESIS: A statement or assumption regarding a population parameter subject to


verification.

There are two types of statistical hypothesis:

1. Null hypothesis
2. Alternative hypothesis

Null hypothesis ( H0 ): A hypothesis associated with a contradiction to a theory one would like
to prove.

Alternative hypothesis ( H1 ): A hypothesis associated with a theory one would like to prove.

Example:

1. If a researcher is assuming that the bearing capacity of a bridge is more than 10 tons, then the
hypothesis under this study will be:
Null hypothesis H0: µ= 10 tons
Alternative hypothesis H1 : µ>10 tons

2. If a researcher has question that the probability of getting head and tail is equal or not , then
the hypothesis of study will be,
Null hypothesis H0: p = q
Alternative hypothesis H1 : p ≠ q

What Is Hypothesis Testing?

A procedure based on sample evidence and probability theory to determine whether the hypothesis
is a reasonable statement or not.

**The hypothesis test consists of several components; two statements, the null hypothesis and the
alternative hypothesis, the test statistic and the critical value, which in turn gives us the p-value
and the rejection region.

Five- Step Procedure for Testing a Hypothesis


Step 1: State the Null Hypothesis (H0) and the Alternate Hypothesis (H1)

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Step 2: Select a Level of Significance

LEVEL OF SIGNIFICANCE: The probability of rejecting the null hypothesis when it is true.

Type I error: In a test of hypothesis, the type I error occurs when the null hypothesis H0 is rejected
although it was true. The probability of type I error is denoted by α, α is also known as the level
of significance.

Type II error: In a test of hypothesis, the type I error occurs when the null hypothesis H0 is not
rejected although it was False. The probability of type II error is denoted by β.

Step 3: Select the Test Statistic


TEST STATISTIC: A value, determined from sample information, used to determine whether to
reject the null hypothesis.

Some importance test of significance:

1. Normal test or z-test (applicable when sample size is more than or equal 30)
2. t-test (applicable when sample size is less than 30)
3. chi-square test (applicable to test the association between categorical variables)

**Formula for normal or z-test


𝑥̅ −𝜇
Z=𝜎/√𝑛 ~𝑁(0,1) when 𝜎 𝑖𝑠 𝑘𝑛𝑜𝑤𝑛

** if σ is not available in problem then use Sample Standard Deviation (s).

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Step 4: Formulate the Decision Rule

A decision rule is a statement of the specific conditions under which the null hypothesis
is rejected and the conditions under which it is not rejected.
Acceptance region:
The set of values of the test statistics for which we fail to reject the null hypothesis.

Rejection region:
The set of values of the test statistics for which the null hypothesis is rejected.

**A guide to decide rule:


𝐻1 𝛼 = 0.05

𝑅𝑒𝑗𝑒𝑐𝑡 𝐻0 𝑖𝑓

i) 𝜇 ≠ 𝜇0 (two tailed test) IZcal I>1.96 (Ztab)

ii) 𝜇 < 𝜇0 Zcal < - 1.64 (Ztab )


(𝑓𝑜𝑟 𝑙𝑒𝑓𝑡 𝑡𝑎𝑖𝑙𝑒𝑑 𝑡𝑒𝑠𝑡))

iii) 𝜇 > 𝜇0 Zcal >1.64 (Ztab )


(𝑓𝑜𝑟 𝑟𝑖𝑔ℎ𝑡 𝑡𝑎𝑖𝑙𝑒𝑑 𝑡𝑒𝑠𝑡)

Step 5: Make a Decision


The fifth and final step in hypothesis testing is computing the test statistic, comparing it to
the critical value, and making a decision to reject or not to reject the null hypothesis.

SUMMARY OF THE STEPS IN HYPOTHESIS TESTING

1. Establish the null hypothesis (H0) and the alternate hypothesis (H1).
2. Select the level of significance, that is α.
3. Select an appropriate test statistic.
4. Formulate a decision rule based on steps 1,2, and 3 above.
5. Make a decision regarding the null hypothesis based on the sample information.
Interpret the results of the test.

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Problem#1

The average IQ of working women in Bangladesh is suspected to be 110, on average. A random


sample of 64 of such women yielded an average IQ of 115.5 and a standard deviation of 20. Can
you conclude that the average score of the women in the population is really more than 110?
Consider the average IQ score of women follow a normal distribution at 5% level of significance.

a. Set up Null and Alternative hypothesis


b. State the tabulated value of test statistic of this test at 5% level of significance.
c. Calculate the test statistic value.
d. Make comparison between tabulated and calculated value of test statistic through
diagram and conclude the result.

Problem#2

The mean and standard deviation of GPA scores obtained from a random sample of 40 students of
IUBAT were 2.4 and 0.35 respectively. Consider that, sample has come from the entire group of
students, which has a mean score of 2.8. Can you conclude that the average GPA of the population
really less than 2.8 considering 5% level of significance.

a. Set up Null and Alternative hypothesis


b. State the tabulated value of test statistic of this test at 5% level of significance.
c. Calculate the test statistic value.
d. Make comparison between tabulated and calculated value of test statistic through
diagram and conclude the result.

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