Transcript
Page 1: Hypothesis Testing for Beginners

HYPOTHESIS TESTING

Prem Sankar CM Tech Technology ManagementDept of Futures StudiesKerala University

Prem Sankar C - Dept of Futures Studies

Page 2: Hypothesis Testing for Beginners

INTRODUCTION

• A statement which is capable of being tested by scientific methods.

• A statistical hypothesis is a statement which we want to test on the basis of result obtained from a random sample

• The procedure by which either accept or reject the hypothesis is called testing hypothesis

Prem Sankar C - Dept of Futures Studies

Page 3: Hypothesis Testing for Beginners

BASIC CONCEPTS

Null hypothesisAlternate hypothesis

Prem Sankar C - Dept of Futures Studies

Page 4: Hypothesis Testing for Beginners

NULL HYPOTHESIS

• Null hypothesis is the hypothesis which we want to reject

• denoted by H0

Prem Sankar C - Dept of Futures Studies

Page 5: Hypothesis Testing for Beginners

ALTERNATE HYPOTHESIS

• Alternate hypothesis is the hypothesis which we want to prove

• denoted by Ha

Prem Sankar C - Dept of Futures Studies

Page 6: Hypothesis Testing for Beginners

TYPE I AND TYPE II ERRORS

• Two possible types of errors arei. Rejecting Ho when it is true

ii. Accepting Ho when it is false

α - Level of significance

1-β - power of test

Accept Ho Reject Ho

Ho is true Correct decision Type I error (α)

Ho is false Type II error (β) Correct decision

Prem Sankar C - Dept of Futures Studies

Page 7: Hypothesis Testing for Beginners

LEVEL OF SIGNIFICANCE - α

• The probability of rejecting hypothesis H0 when it is true

• 5% Level of significance means that there is a risk of 5% of rejecting H0

Prem Sankar C - Dept of Futures Studies

Page 8: Hypothesis Testing for Beginners

PROCEDURE FOR TESTING A HYPOTHESIS

1. Formulate a null hypothesis and an Alternate hypothesis

2. Specify the level of significance

3. Select an appropriate sampling distribution

4. Select a random sample

5. Decide whether to reject Ho or not Prem Sankar C - Dept of Futures

Studies

Page 9: Hypothesis Testing for Beginners

THANK YOU

Prem Sankar CM Tech Technology Management

Dept of Futures StudiesKerala University

Prem Sankar C - Dept of Futures Studies


Top Related