Hypothesis Testing

Learning Outcomes:
After careful study of this chapter, you should be able to:
 Understand the concept and general procedure of hypothesis testing.
 Conduct and interpret hypothesis tests for a single population mean, population
standard deviation known.
 Conduct and interpret hypothesis tests for two population means, population
standard deviations known.
 Conduct and interpret hypothesis tests for a single population mean, population
standard deviation unknown.
 Conduct and interpret hypothesis tests for two population means, population
standard deviations unknown.
 Conduct and interpret hypothesis tests for a single population proportion.
 Conduct and interpret hypothesis tests for two population proportions.
 Conduct and interpret chi-square goodness-of-fit hypothesis tests.
 Conduct and interpret chi-square test of independence hypothesis tests.

Hypothesis testing:
Hypothesis testing or significance testing is a method for testing a claim or hypothesis
about a parameter in a population, using data measured in a sample. In this method, we
test some hypotheses by determining the likelihood that a sample statistic could have been
selected, if the hypothesis regarding the population parameter were true.
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Hypothesis: Any statement about any phenomenon is known as a hypothesis.
Statistical hypothesis: Statistical hypothesis is a hypothesis about population
characteristics that can be tested on the basis of sample data.
[From textbook]
There are two types of statistical hypotheses:
Null Hypothesis (H0) – A statistical hypothesis that states that there is no difference
between a parameter and a specific value, or that there is no difference between two
parameters.
Alternative Hypothesis (H1) – A statistical hypothesis that states the existence of a
difference between a parameter and a specific value, or states that there is a difference
between two parameters.
We tend to want to reject the null hypothesis so we assume it is true and look for enough
evidence to conclude it is incorrect. We tend to want to accept the alternative hypothesis. If
the null hypothesis is rejected then we must accept that the alternative hypothesis is true.
Note: H0 will ALWAYS have an equal sign (and possibly a less than or greater than symbol,
depending on the alternative hypothesis).
The alternative hypothesis has a range of values that are alternatives to the one in H0 .
The null and alternative hypotheses are stated together. The following are typical
hypothesis for means, where k is a specified number.
After stating the hypotheses, the researcher designs the study.
 Select the correct statistical test
 Choose an appropriate level of significance
 Formulate a plan for conducting the study
Statistical Test – uses the data obtained from a sample to make a decision about whether
the null hypothesis should be rejected.
Test Value (test statistic) – the numerical value obtained from a statistical test.

Types of Statistical Error

When we make a conclusion from a statistical test there are two types of errors that we
could make. They are called: Type I and Type II Errors

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Type I Error
A Type I Error occurs when the statistical test rejects the null hypothesis, when the null
should have been retained. In other words, you claim that you have found a difference (or
a relationship), when really, there was no difference (no relationship).
You can control for this type of error in several ways:
 Increase your sample size
 Select a smaller alpha
Type II Error
A Type II Error occurs when the statistical test retains (fails to reject) the null hypothesis,
when the null should have been rejected. In other words, you claim that you did not find
evidence of a difference (or a relationship), when really, there was difference (no
relationship).
You can control for this type of error in several ways:
 Increase your sample size
 Select a bigger alpha
 Increase the strength of your independent variable with better measuring
 Decrease the variability within your sample
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Significance level - is the maximum probability of committing a Type I error. This
probability is symbolized by  
P(Type I error|H0 is true) = 
Critical or Rejection Region – the range of values for the test value that indicate a
significant difference and that the null hypothesis should be rejected.
Acceptance region or Non-critical or Non-rejection Region – the range of values for the
test value that indicates that the difference was probably due to chance and that the null
hypothesis should not be rejected.
Critical Value (CV) – separates the critical region from the non-critical region, i.e., when
we should reject H0 from when we should not reject H0.
 The location of the critical value depends on the inequality sign of the alternative
hypothesis.
 Depending on the distribution of the test value, you will use different tables to find
the critical value.
Degrees of Freedom:
Degrees of freedom refers to the maximum number of logically independent values, which
are values that have the freedom to vary, in the data sample.
The formula for degrees of freedom equals the size of the data sample minus one:
Df=N−1
where:Df =degrees of freedom, N=sample size

Finding the Critical Values for Specific α Values, Using Table Z

Step 1: Draw a figure for the distribution of the test values and indicate the appropriate
area for the rejection region.
 If the test is left-tailed, the critical region, with area equal to α, will be on the left
side of the distribution curve.
 If the test is right-tailed, the critical region, with area equal to α, will be on the right
side of the distribution curve.
 If the test is two-tailed, α must be divided by 2; the critical regions will be in each
end of the distribution curve - half the area in the left part of the distribution and
half of the area in the right part of the distribution.
Step 2:
 For a left-tailed test, use the z value that corresponds to the area equivalent to  in
Table Z, i.e., Z1-α , the  percentile of the distribution.
 For a right-tailed test, use the z value that corresponds to the area equivalent to 1-
 in Table Z, i.e., Zα , 1- the percentile of the distribution.
  For a two-tailed test, use the z value that corresponds to /2 for the left lower CV. It
will be negative. Change the sign to positive and you will get the critical value for the
right side.
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FOUR STEPS TO HYPOTHESIS TESTING
The goal of hypothesis testing is to determine the likelihood that a population parameter,
such as the mean, is likely to be true. In this section, we describe the four steps of
hypothesis testing that were briefly introduced in Section 8.1:
Step 1: State the hypotheses.
Step 2: Set the criteria for a decision.
Step 3: Compute the test statistic.
Step 4: Make a decision.
Step 1: State the hypotheses. We begin by stating the value of a population mean in a null
hypothesis, which we presume is true. For the children watching TV example, we state the
null hypothesis that children in the United States watch an average of 3 hours of TV per
week. This is a starting point so that we can decide whether this is likely to be true, similar
to the presumption of innocence in a courtroom. When a defendant is on trial, the jury
starts by assuming that the defendant is innocent. The basis of the decision is to determine
whether this assumption is true. Likewise, in hypothesis testing, we start by assuming that
the hypothesis or claim we are testing is true. This is stated in the null hypothesis. The
basis of the decision is to determine whether this assumption is likely to be true.
Keep in mind that the only reason we are testing the null hypothesis is because we think it
is wrong. We state what we think is wrong about the null hypothesis in an alternative
hypothesis. For the children watching TV example, we may have reason to believe that
children watch more than (>) or less than (<) 3hoursTV per week. When we are uncertain
of the direction, we can state that the value in the null hypothesis is not equal to (≠) 3
hours.
In a courtroom, since the defendant is assumed to be innocent (this is the null hypothesis
so to speak), the burden is on a prosecutor to conduct a trial to show evidence that the
defendant is not innocent. In a similar way, we assume the null hypothesis is true, placing
the burden on the researcher to conduct a study to show evidence that the null hypothesis
is unlikely to be true. Regardless, we always make a decision about the null hypothesis
(that it is likely or unlikely to be true). The alternative hypothesis is needed for Step 2.
Step 2: Set the criteria for a decision. To set the criteria for a decision, we state the level
of significance for a test. This is similar to the criterion that jurors use in a criminal trial.
Jurors decide whether the evidence presented shows guilt beyond a reasonable doubt (this
is the criterion). Likewise, in hypothesis testing, we collect data to show that the null
hypothesis is not true, based on the likelihood of selecting a sample mean from a
population (the likelihood is the criterion). The likelihood or level of significance is
typically set at 5% in behavioral research studies. When the probability of obtaining a
sample mean is less than 5% if the null hypothesis were true, then we conclude that the
sample we selected is too unlikely and so we reject the null hypothesis.
The alternative hypothesis establishes where to place the level of significance. Remember
that we know that the sample mean will equal the population mean on average if the null
hypothesis is true. All other possible values of the sample mean are normally distributed
(central limit theorem). The empirical rule tells us that at least 95% of all sample means fall
within about 2 standard deviations (SD) of the population mean, meaning that there is less
than a 5% probability of obtaining a sample mean that is beyond 2 SD from the population
mean. For the children watching TV example, we can look for the probability of obtaining a
sample mean beyond 2 SD in the upper tail (greater than 3), the lower tail (less than 3), or
both tails (not equal to 3).

Figure 8.2 shows that the alternative hypothesis is used to determine which tail or tails to
place the level of significance for a hypothesis test.
Step 3: Compute the test statistic. Suppose we measure a sample mean equal to 4 hours
per week that children watch TV. To make a decision, we need to evaluate how likely this
sample outcome is, if the population mean stated by the null hypothesis (3 hours per week)
is true. We use a test statistic to determine this likelihood. Specifically, a test statistic tells
us how far, or how many standard deviations, a sample mean is from the population mean.
The larger the value of the test statistic, the further the distance, or number of standard
deviations, a sample mean is from the population mean stated in the null hypothesis. The
value of the test statistic is used to make a decision in Step 4.
Step 4: Make a decision. We use the value of the test statistic to make a decision about the
null hypothesis. The decision is based on the probability of obtaining a sample mean, given
that the value stated in the null hypothesis is true. If the probability of obtaining a sample
mean is less than 5% when the null hypothesis is true, then the decision is to reject the null
hypothesis. If the probability of obtaining a sample mean is greater than 5% when the null
hypothesis is true, then the decision is to retain the null hypothesis. In sum, there are two
decisions a researcher can make:
1. Reject the null hypothesis. The sample mean is associated with a low probability of
occurrence when the null hypothesis is true.
2. Retain the null hypothesis. The sample mean is associated with a high probability of
occurrence when the null hypothesis is true.
The probability of obtaining a sample mean, given that the value stated in the null
hypothesis is true, is stated by the p value. The p value is a probability: It varies between 0
and 1 and can never be negative. In Step 2, we stated the criterion or probability of
obtaining a sample mean at which point we will decide to reject the value stated in the null
hypothesis, which is typically set at 5% in behavioral research. To make a decision, we
compare the p value to the criterion we set in Step 2.
When the p value is less than 5% (p < .05), we reject the null hypothesis. We will refer to p
< .05 as the criterion for deciding to reject the null hypothesis, although note that when p
= .05, the decision is also to reject the null hypothesis. When the p value is greater than 5%
(p > .05), we retain the null hypothesis. The decision to reject or retain the null hypothesis
is called significance. When the p value is less than .05, we reach significance; the decision
is to reject the null hypothesis. When the p value is greater than .05, we fail to reach
significance; the decision is to retain the null hypothesis. Figure 8.3 shows the four steps of
hypothesis testing.

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Types of Statistical Tests

There are many different types of tests in statistics like t-test,Z-test,F-test, chi-square test,
anova test ,binomial test, one sample median test etc.
Z-test for mean:
A statistical test uses the data obtained from a sample to make a decision about whether
the null hypothesis should be rejected. The numerical value obtained from a statistical test
is called the test value. You will notice that our statistical tests will resemble the general
formula for a z-score:

The z test is a statistical test for the mean of a population. It can be used when n ≥ 30, or
when the population is normally distributed and σ is known.

P-Value Method for Hypothesis Testing

We often test hypotheses at common levels of significance (α = 0.05, or 0.01). Recall that
the choice of alpha depends on the seriousness of the Type I error. There is another
approach that utilizes a P-value.
The P-Value (or probability value) is the probability of getting a sample statistic (such as
the mean) or a more extreme sample statistic in the direction of the alternative hypothesis
when the null hypothesis is true.
The P-value is the actual area under the standard normal distribution curve of the test
value or a more extreme value (further in the tail).
A General Rule for Finding P-values using the Z distribution or the t distribution:

t Test for a Mean

When a population is normally or approximately normally distributed, but the population
standard deviation is unknown, the z test is inappropriate for testing hypotheses involving
means. Instead we will use the t test when  is unknown and the distribution of the
variable is approximately normal.
The one-sample t test is a statistical test for the mean of a population and is used when the
population is normally or approximately normally distributed and σ is unknown.

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Chi-square test (χ2 test)- chi-square test is used to compare two categorical variables.
Calculating the Chi-Square statistic value and comparing it against a critical value from the
Chi-Square distribution allows to assess whether the observed frequency are significantly
different from the expected frequency.
The hypothesis being tested for chi-square is-
Ho: Variable x and Variable y are independent
Ha: Variable x and Variable y are not independent.

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