3. One sample test
Hypothesis testing
A procedure based on sample evidence and
probability theory to determine whether the
hypothesis is a reasonable statement.
4. Introduction- 8.1
Function of Hypothesis Testing- To test whether
the sample statistic is equal to population parameter
It is based on calculation
………………..not on intuition
5. Hypothesis testing
process
• State null and alternative
hypothesis
• Select a level of significance
• Formulate decision rule
• Calculate test statistic
• Make decision
• Interpret the result
6.
7. Hypothesis testing
process
Null hypothesis is a statement about the value of
a population parameter developed for the
purpose of testing numerical evidence.
Statement that we want to
reject.
8. A statement that is accepted if the sample data
provide sufficient evidence that the null
hypothesis is false.
Hypothesis testing
process
12. The probability of rejecting the null hypothesis
when it is true.
Hypothesis testing
process
Also called level of
risk.
13. What is level of significance-
If the difference between the sample statistic
and population parameter has only 5% chance
of occurring, it is called the level of
significance.
If significance level is 5%
We will reject the null hypothesis if there are
fewer than 5 data in each 100 data where
there will be a difference between population
parameter and sample statistic.
15. Error
Type I: Rejecting the null hypothesis when it is
true. expressed by alpha
Type II: Not rejecting the null hypothesis when it is
false.expressed by beta
Hypothesis testing
process
27. P value
The probability of observing a sample value as
extreme as, or more extreme than, the value
observed, given that the null hypothesis is true.
An alternative way
