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HYPOTHESIS TESTING TEST of Hypothesis: an inference and a decision making process in which we use SAMPLE information to test whether

a POPULATION PARAMETER is less than, equal to or greater than a specified value. It will be possible to measure the reliability of the inference. The parameter we will deal with (in this course) will be: the population mean, : The population proportion, p We need to: Define the population under investigation State the hypothesis Mention the significance level (reliability) Select a sample, collect data (generally done by the researcher) Perform calculations Reach and state a conclusion SPEP 1 A Statistical Hypothesis is a theory about a population parameter, that may or may not be true. We have two types of hypothesis: Null Hypothesis Ho: represents the status quo, the conservative theory from previous experience that we accept until proven false. (Trial defendant assumed not guilty unless otherwise proved) Ho always contains the = sign. We always assume that Ho is true. It states that there is no difference between a parameter and a hypothesized value Ho: : = : o or Ho: p = po

Alternative Hypothesis Ha: a theory that contradicts the null hypothesis, by specifying a DIFFERENCE between the parameter and the hypothesized value. It contains the claim, or what the researcher wants to prove. or Ho: : < : o or Ho: : > : o

Ho: : : o

Example: A medical researcher wants to find out whether a new medication has undesirable side effects (ie pulse rate change). The mean pulse rate for the population under study is 82 beats per minute........Will the mean remain unchanged?

Example: A chemical company claims its products will increase the life of car batteries. The mean lifetime of cars batteries is 36 months........Test the companys claim.

Example: A company claims its insulation will lower heating bills. If the average heating bill is $86, ........test the companys claim.

STEP 2 A test statistics is a formula used to decide whether to accept or reject the null hypothesis. The formula follows the format (sample) (population) Test value = observed value expected value Standard error Test for mean test for proportion z=

x 0 z= n

x np 0 np 0 (1 p 0 )

p p0 p 0 (1 p 0 ) n

or z =

STEP 3 State the significance level , or the maximum probability of committing a type I error, or rejecting the null hypothesis when Ho is true (convicting an innocent person). Another type of error that can be committed is , (Type II error), or failing to reject Ho when it is false (acquitting a guilty person). Reject Ho Accept Ho Ho true Type I error ( ) OK Ho false OK Type II error ( )

Rejecting the null hypothesis when Ho is true is a serious mistake, so its probability must be small. We will generally use = 5%, 10% or 1% measures the reliability of the inference. STEP 4 Select a critical value from a set of tables, that will separate the rejection region from the accept region. The rejection region must have a probability to contain the test statistics when the Ho is true, and represents the region in which there is a significant difference between the sample value and the hypothesized population value. One tailed test (right) ( Ha : > )

If z > z Reject Ho z < z Accept Ho

One tailed left

(Ha :

<

If z < - z Reject Ho z > - z Accept Ho Two tailed test ( Ha : )

If z > z /2 or z < If z < - z /2 Reject Ho - z /2 < z < z /2 Accept Ho STEP 6 Compare the test statistics with the critical value. Make a decision and state it in terms of accept/reject H0 ACCEPT Ho means we do not have enough evidence to reject Ho and prove the claim. (defendant is NOT Guilty differs from defendant is innocent)

REJECT Ho means that the claim is correct (Ha is accepted).