Week 3 - Statistical hypothesis testing
Week 3 - Statistical hypothesis testing
Semester 1, 2024-2025
Statistical Hypothesis
testing
Learning objectives
• Null hypothesis H0
• Alternative hypothesis H1 or HA
• H0 & H1 - Mutually exclusive & Exhaustive
• 2 possible states of nature: H0 is true or H0 is false
→ 2 possible decisions: Fail to reject H0 as true or Reject as H0
false
• 2 types of error: Type I error with probability 𝛼 & Type II error
with probability 𝛽
→ 𝛼 – level of significance, 1 − 𝛽 – power of the test
1- or 2-tailed tests
H1: 𝝁 ≠ 𝝁𝟎 ; 𝒑 ≠ 𝒑𝟎 ; 𝜹𝟐 ≠ 𝜹𝟎 𝟐
1- or 2-tailed tests
Hypothesis testing (1)
• The critical value(s) is(are) the cutoff point(s) defining the boundary
between the reject and non-reject regions of the H0
➢ The reject region (shaded
area in the tails) corresponds
to extreme values where we
would reject H0 because the
test statistic falls far from
the mean of the distribution
➢ The non-reject region is the
area where we do not have
enough evidence to reject H0
Decision rules
p-value - the
probability of the Reject H0 if p-value ≤ 𝛼
observed result
occurring by random
Fail to reject H0 if p-value > 𝛼
chance if H0 is true
Test statistic Reject H0 if |test statistic|> critical value
value(s): z-score(s),
t-score(s), χ2 -score(s)… Fail to reject H0 if |test statistic|≤ critical value
* For one-tailed tests, adjust for the direction of the test
Reject/non-reject Reject H0 if the test statistic falls in the reject area(s)
areas, or critical Fail to reject H0 if the test statistic falls within the non-reject
regions
region
Hypothesis tests
*based on a collected sample with an identified or population number
ෝ−𝒑𝟎
𝒑
➢ Using approximated normal z-distribution: z-score =
𝒑𝟎 .𝒒𝟎
𝒏