Hypothesis

Testing
By: Janice Galus Cordova

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 Remembering the signs
• H0 – null hypothesis
• H1 – alternative hypothesis
• µ - population mean
• α - alpha region
• β - beta region
• p-value

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 Hypothesis Testing
• It is a statistical method that is used in making
statistical decisions using experimental data.
• Hypothesis testing is basically an assumption
that we make about the population
parameter.
• Three methods used to test hypothesis
1. Traditional method
2. p-value method
3. Confidence interval method.
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 Statistical hypotheses
• It is a conjecture about the population
parameter.
• Two types of Statistical hypotheses testing
1. Null Hypotheses (H0) – is a statistical
hypothesis testing that assumes that the
observation is due to a chance factor.
 In hypothesis testing , null hypothesis is denoted
by; H0: µ1 = µ2, which shows that there is no
difference between the two population means
(or parameters).
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2. Alternative Hypothesis (H1) – is the
opposite of the null hypothesis; it
shows that observations are the
result of a real effect. It states that
there is a difference between two
population means (or parameters).

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 Level of Significance
• It refers to the degree of significance in
which we accept or reject the null
hypothesis.
• In hypothesis testing, 100% accuracy is
not possible for accepting or rejecting
null hypothesis therefore we select a
level of significance that is usually 1%
and 5%.
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• After the significance level is
chosen, a critical value is
selected from a table for the
appropriate test statistic.
• CRITICAL VALUE – is a value
that separates the critical and
non critical region.
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• Critical region or rejection region – is the
range of values of the test value that
indicates that there is significant difference
and that the null hypothesis(H0) should be
rejected.

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• Noncritical region or nonrejection region –
is the range of values of the test value that
indicates that the difference was probably
due to chance and that the null
hypothesis(H0) should not be rejected.

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 One-tailed versus Two-
tailed test
• ONE-TAILED TEST
–Shows that the null hypothesis be
rejected when test value is in the
critical region on one side of the mean.
–It may be either a right-tailed test or
left-tailed test, depending on the
direction of the inequality of the
alternative hypothesis.
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 • TWO-TAILED TEST
– The null hypothesis should be rejected
when the test value is in either of the two
critical regions.

TWO –TAILED LEFT-TAILED RIGHT-TAILED

TEST TEST TEST

H0: µ = k H0: µ = k or H0: µ = k or

Signs in the H0
H0: µ ≥ k H0: µ ≤ k
Signs in the H1
H1: µ ≠ k H1: µ < k H1: µ > k
Rejection
In both tails In the left tail In the right tail
Region
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Common Phrases in
Hypothesis testing

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ERRORS IN HYPOTHESIS TESTING
TYPE I Error
• Occurs if one rejects
the null hypothesis
when it is true.
• In hypothesis testing,
Type I error are
denoted by beta (α)
• In hypothesis testing
also, the normal curve
that shows the critical
region is called alpha
region.
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TYPE II Error
• Occurs if one does not
reject the null
hypothesis when it is
false.
• In hypothesis testing,
Type II error are
denoted by beta (β)
• In hypothesis testing
also, then normal curve
that shows the
acceptance region is
called the beta region.
Possible outcome of a hypothesis
test
STATISTICAL
H0 TRUE H0 FALSE
DECISION

Correct decision Type II error

Do not reject H0
Confidence = 1 - α P(Type II error) = β
Reject H0 Type I error Correct decision
P(Type I error) = α Power = 1 - β

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Hypothesis testing in a court trial
In a court trial, there are four possible outcomes. The
defendant is either guilty or innocent, and will be
convicted or acquitted.( What do you think are the hypotheses?)
Next, the prosecutor will present the evidence and
based on this evidence, the judge decides the verdict,
innocent or guilty. If the defendant is acquitted and did
not commit the crime, a correct decision has been made
by the judge. On the other hand, if the defendant is
acquitted and has committed the crime, then Type II
error has been made.
If the defendant is convicted but did not commit the
crime, then a Type I error has been committed. On the
contrary, if the defendant is convicted and has
committed the crime, then a correct decision has been
made.
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 Steps in conducting
hypothesis testing
1. State the null hypothesis (H0) and the alternative
hypothesis (H1).
2. Choose the level of significance, α, and the sample
size.
3. Determine the test statistic and sampling
distribution.
4. Determine the critical values that divide the
rejection and nonrejection regions.
5. Collect the data and compute the value of the test
statistic.
6. Make a statistical decision.
7. State the conclusion.
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HYPOTHESIS TESTING USING p-VALUE
• P-VALUE or Probability value is the probability
of getting a sample statistic or a mean
extreme sample statistic in the direction of the
H1 when the H0 is true.
• It is the actual area under the standard
distribution curve representing the probability
of a particular sample statistic or a more
sample statistic occurring if the H0 is true.

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 Steps for p-value
1. State the nullmethod
hypothesis (H ) and the
0
alternative hypothesis (H1)
2. Choose the level of significance, α, and the
sample size.
3. Determine the test statistic and sampling
distribution.
4. Compute the test value
5. Determine the p-value
6. Make a statistical decision
7. State the conclusion
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 Other approach in the decision rule
when using a p-value method.

• If p-value ≤ α, reject the H0 , and

p-value > α, do not reject H0.

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Some important guidelines for
p-values
• If p-value ≤ 0.01, reject the H0 , thus difference
is highly significant.
• If p-value > 0.01 and p-value ≤ 0.05, reject the
H0, thus difference is significant.
• If p-value > 0.05 and p-value ≤ 0.10, consider
a consequences of Type I error before
rejecting the H0 , thus difference is significant.
• If p-value > 0.10, do not reject the H0 , thus
difference is not significant
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 Confidence Intervals and
Hypothesis Testing
• Another concept of hypothesis testing is
the relationship between hypothesis
testing and confidence intervals. This is
summarized into two:
– When the confidence interval contains the
hypothesized mean, do not reject H0.
– When the confidence interval does not
contain the hypothesized mean, reject H0.

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• In general, when the H0 is not rejected,
the confidence interval calculated at the
same significance level will contain the
value of the mean that is stated in the H0.
In the contrary, when the H0 is rejected,
the confidence interval calculated at the
same significance level will not contain
the value of the mean that is in the H0.
These results are true for other
hypothesis testing situations and are not
only applicable to means test.
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