Chapter 8Introduction to Hypothesis Testing.ppt

Chapter 8Introduction to Hypothesis Testing Chapter Goals After completing this chapter, you should be able to: Formulate null and alternative hypotheses for applications involving a single population mean Formulate a decision rule for testing a hypothesis Know how to use the test statistic, critical value, and p-value approaches to test the null hypothesis Testing Theories Hypotheses Competing theories that we want to test about a population are called Hypotheses in statistics. Specifically, we label these competing theories as Null Hypothesis H0 and Alternative Hypothesis H1 or HA . H0 : The null hypothesis is the status quo or the prevailing viewpoint. HA : The alternative hypothesis is the competing belief. It is the statement that the researcher is hoping to prove. The Null Hypothesis, H0 Begin with the assumption that the null hypothesis is true Refers to the status quo Always contains “ ” , “≤” or “?” sign May or may not be rejected The Alternative Hypothesis, HA Challenges the status quo Never contains the “ ” , “≤” or “?” sign Is generally the hypothesis that is believed or needs to be supported by the researcher Provides the “direction of extreme” Deciding Which Theory to Support Decision making is based on the “rare event” concept. Since the null hypothesis is the status quo, we assume that it is true unless the observed result is extremely unlikely rare under the null hypothesis. Definition: If the data were indeed unlikely to be observed under the assumption that H0 is true, and therefore we reject H0 in favor of HA, then we say that the data are statistically significant. Reason for Rejecting H0 Level of Significance, ? Defines unlikely values of sample statistic if null hypothesis is true Defines rejection region of the sampling distribution Is designated by ? , level of significance Is selected by the researcher at the beginning Provides the critical value s of the test Level of Significance and the Rejection Region Critical Valu