The document discusses hypothesis testing including the definition, types of hypotheses, steps, types of tests, types of errors, test statistics and examples. Hypothesis testing is the process of analyzing sample data to draw inferences about population characteristics by comparing a sample statistic to a hypothesized population parameter. The key aspects covered are the null and alternative hypotheses, test statistics, critical regions, types of errors and examples demonstrating hypothesis testing concepts.
The document discusses hypothesis testing including the definition, types of hypotheses, steps, types of tests, types of errors, test statistics and examples. Hypothesis testing is the process of analyzing sample data to draw inferences about population characteristics by comparing a sample statistic to a hypothesized population parameter. The key aspects covered are the null and alternative hypotheses, test statistics, critical regions, types of errors and examples demonstrating hypothesis testing concepts.
The document discusses hypothesis testing including the definition, types of hypotheses, steps, types of tests, types of errors, test statistics and examples. Hypothesis testing is the process of analyzing sample data to draw inferences about population characteristics by comparing a sample statistic to a hypothesized population parameter. The key aspects covered are the null and alternative hypotheses, test statistics, critical regions, types of errors and examples demonstrating hypothesis testing concepts.
The document discusses hypothesis testing including the definition, types of hypotheses, steps, types of tests, types of errors, test statistics and examples. Hypothesis testing is the process of analyzing sample data to draw inferences about population characteristics by comparing a sample statistic to a hypothesized population parameter. The key aspects covered are the null and alternative hypotheses, test statistics, critical regions, types of errors and examples demonstrating hypothesis testing concepts.
Hypothesis Testing Course Instructor Tofayel Ahmed Lecturer College of Arts and Science(CAAS) Department of Quantitative Science IUBAT-International University of Business, Agriculture and Technology Outline ❑Introduction ❑Types of hypothesis ❑Steps for hypothesis testing ❑Acceptance region and Rejection region ❑Types of test ❑Types of error ❑Test Statistic ❑Real life example Hypothesis Testing 2 Hypothesis Testing Definition The process that enables a decision maker to draw an inference about population characteristics by analyzing the difference between the value obtained from sample and the hypothesized value of parameter is called hypothesis testing. Statistical Hypothesis: Statistical hypothesis is a statement about population characteristic that can be tested on the basis of sample data. There are two types of statistical hypothesis: (i) Null Hypothesis (ii) Alternative Hypothesis
Hypothesis Testing 3 Hypothesis Testing ❑ Null Hypothesis(𝑯𝟎 ): A statistical hypothesis that is to be tested. A null hypothesis states that there is no difference between the true population value (parameter) and an estimated sample value (statistic). • Researcher wants to reject the null hypothesis. • Null hypothesis is generally denoted by 𝐻0. ❑ Alternative Hypothesis(𝑯𝟏 ): It is opposite to null hypothesis. An alternative hypothesis states that there is difference between the true population (parameter) and an estimated sample value (statistic). • Researcher wants to accept the alternative hypothesis. • Alternative hypothesis is generally denoted by 𝐻1 .
Hypothesis Testing 4 Hypothesis Testing Mathematical symbol used in 𝑯𝟎 and 𝑯𝟏 :
𝐻0 𝐻1 equal (=) Not equal (≠) Or greater than (>) or less than (<)
Example:
𝐻0 𝐻1 The coin is fair (H=T) The coin is unfair (H≠ T) Average weight of IUBAT Average weight of IUBAT students is 62.5 kg ( μ = students is less than 62.5 62.5) kg ( μ < 62.5) Hypothesis Testing 5 Steps for Hypothesis Testing Steps for Testing a hypothesis: ➢ State the null hypothesis and alternative hypothesis. ➢ Select level a significance, that is α. ➢ Select an appropriate test statistic. ➢ Formulate a decision rule based on steps 1, 2 and 3 above. ➢ Make a decision regarding the null hypothesis based on the sample information. Interpret the results of the test.
Hypothesis Testing 6 Hypothesis Testing ❑ Critical/Rejection Region If the value of the test statistic falls in this region , then the null hypothesis is rejected. ❑ Acceptance Region If the value of the test statistic falls in this region , then we fail to reject null hypothesis, that means we accept null hypothesis.
Hypothesis Testing 7 Types of Test ❑Types of test (i) Left tail test: When the rejection region is in the left tail of the distribution of the test statistic , the test is called a left tail test. • If the null hypothesis is 𝐻0 : μ = μ0 , then the alternative hypothesis will be 𝐻1 : μ < μ0 . (ii) Right tail test: When the rejection region is in the right tail of the distribution of the test statistic, the test is called a right tail test. • If the null hypothesis is 𝐻0 : μ = μ0 , then the alternative hypothesis will be 𝐻1 : μ > μ0 .
Hypothesis Testing 8 Types of Test (iii) Two tailed test: When the rejection region is equally divided in the left and right tails of the distribution of the test statistic, then the test is called two tailed test. • If the null hypothesis is 𝐻0 : μ = μ0 , then the two sided alternative hypothesis is defined by 𝐻1 : μ ≠ μ0
Hypothesis Testing 9 Types of Test Critical regions for different types of alternative are displayed in following figures:
Hypothesis Testing 10 Types of Error ❑ Types of error There are two types of error (i) Type-I error : The error of rejecting the null hypothesis when it’s actually true. That’s means, type-I error occurs when null hypothesis is wrongly rejected. (ii) Type-II error : The error of accepting the null hypothesis when it is false. That’s mean type-II error occurs when null hypothesis is not rejected wrongly. ❑ Level of significance The probability of committing a type I error is called the level of significance. In the other word , it is the total area under critical region. Symbolically, α = P (reject 𝐻0 |𝐻0 is true). (1%, 5%, 10%)
Hypothesis Testing 11 Test Statistic ❑Test Statistic A value determined from sample information. Depending on its value, the null hypothesis will be either rejected or not rejected. ❑Some important test statistic: (i) Normal test or z-test ( n ≥ 30) (ii) t- test (n < 30) (iii) Chi-square test (iv) F- test
Hypothesis Testing 12 Test Statistic ❑Normal test or z-test: Formula for z-test,
ഥ−𝝁 𝒙 Z= σ ~(0,1) 𝒏 Where, 𝑥ഥ = sample mean μ= population mean n= sample size σ = standard deviation
Hypothesis Testing 13 Example Example-1: The managing director of a firm claims that his firms produces 110 items on average daily. A random sample of 15 days gives the following data set: 110, 118, 130, 140, 142, 146, 112, 100, 95, 98, 96, 122, 123, 124, 130 It is known that the number of items produced by the firm follows normal distribution with variance 300. Can we conclude at 5% level of significance that the average daily production of items of that firm is (i) 110 items (ii) More than 110 items (iii) Less than 110 items
Hypothesis Testing 14 Example Example-2: Manager of a fertilizer factory claims that the average daily production of his factory follows normal distribution with mean production 880kg. A random sample of 50 days shows that average production is 871 kg with standard deviation 21 kg. Test the significance of the claims of the manager at 5% level of significance.
