This document discusses hypothesis testing and provides an overview of key concepts such as the null hypothesis, alternate hypothesis, type I and type II errors, level of significance, and the procedure for testing a hypothesis. It is presented by Prem Sankar C from the Department of Futures Studies at Kerala University.

1. Prem Sankar C
M Tech Technology
Management
Dept of Futures Studies
Kerala University
HYPOTHESIS TESTING
Prem Sankar C - Dept of Futures Studies

2. 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

3. BASIC CONCEPTS
 Null hypothesis
 Alternate hypothesis
Prem Sankar C - Dept of Futures
Studies

4. NULL HYPOTHESIS
• Null hypothesis is the hypothesis
which we want to reject
• denoted by H0
Prem Sankar C - Dept of Futures
Studies

5. ALTERNATE HYPOTHESIS
• Alternate hypothesis is the hypothesis
which we want to prove
• denoted by Ha
Prem Sankar C - Dept of Futures
Studies

6. TYPE I AND TYPE II ERRORS
• Two possible types of errors are
i.
ii.
Rejecting Ho when it is true
Accepting Ho when it is false
Accept Ho
Reject Ho
Ho is true
Correct decision
Type I error (α)
Ho is false
Type II error (β)
Correct decision
α
1-β
- Level of significance
- power Sankartest of Futures
Prem of C - Dept
Studies

7. 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

8. 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

9. THANK YOU
Prem Sankar C
M Tech Technology
Management
Dept of Futures Studies
Kerala University
Prem Sankar C - Dept of Futures
Studies

10. THANK YOU
Prem Sankar C
M Tech Technology
Management
Dept of Futures Studies
Kerala University
Prem Sankar C - Dept of Futures
Studies