Hypothesis Testing
Hypothesis Testing
Hypothesis Testing
Characteristics of Hypothesis
• Clear and precise
• Capable of being tested
• State relationship between variables
• Limited in scope and specific
• Easily understandable
• Consistent with most known facts
• Amenable to testing within reasonable
time
• Must explain the facts
Steps for Hypothesis Testing
Fig. 15.3 Formulate H0 and H1
H 0: p = 0.4 0
H1: p 0.40
Step 2: Select an Appropriate Test
• The test statistic measures how close the sample
has come to the null hypothesis.
• The test statistic often follows a well-known
distribution (eg, normal, t, or chi-square).
• In our example, the z statistic, which follows the
standard normal distribution, would be appropriate.
p-p
z=
sp
Where σp is standard deviation
Step 3: Choose Level of Significance
Type I Error
• Occurs if the null hypothesis is rejected when it is in fact true.
• The probability of type I error ( α ) is also called the level of
significance.
Type II Error
• Occurs if the null hypothesis is not rejected when it is in fact
false.
• The probability of type II error is denoted by β .
• Unlike α, which is specified by the researcher, the magnitude
of β depends on the actual value of the population
parameter (proportion).
Shaded Area
= 0.9699
Unshaded Area
= 0.0301
0 zCAL = 1.88
Step 4: Collect Data and Calculate
Test Statistic
• The required data are collected and the value
of the test statistic computed.
• In our example, 30 people were surveyed and
17 shopped on the internet. The value of the
sample proportion is
p= 17/30 = 0.567.
• The value of sp is:
sp =0.089
Step 4: Collect Data and Calculate
Test Statistic
The test statistic z can be calculated as follows:
pˆ - p
zCAL=
s p
= 0.567-0.40
0.089
= 1.88
Step 5: Determine Probability Value/
Critical Value
• Using standard normal tables), the area to the right of zCAL
is .0301 (zCAL =1.88)
• The shaded area between 0 and 1.88 is 0.4699. Therefore,
the area to the right of 1.88 is 0.5 - 0.4699 = 0.0301.
• Thus, the p-value is .0301