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Lecture 48 Hypothesis

Lecture 48

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Lecture 48 Hypothesis

Lecture 48

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kkyjwhzkn4
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© © All Rights Reserved
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Introductory Statistics

Tutor: Muhammad Athar


Assistant Professor of Statistics, Govt. Zamindar Postgraduate
College, Gujrat

Lecture-48
What is a Hypothesis?
 A hypothesis is a claim/statement/assumption
about a population parameter where a
parameter is the quantity representing the
characteristics of population.

◦ population mean (μ)


Example: The mean monthly cell phone bill of this city is µ
= $42

◦ population
Example: Theproportion
proportion of adults in this city with cell
phones is π = 0.68
The Null Hypothesis, H0
 The statement or hypothesis that is to be
tested for possible rejection under the
assumption that it is true.
 Example: The average number of TV sets in U.S.
Homes is at least three ( H0 : μ  3 )
 Is always about a population parameter,
not about a sample statistic

H0 : μ  3 H0 : x  3
The Null Hypothesis, H0

 Begins with the assumption that the null


hypothesis is true
◦ Similar to the notion of innocent until
proven guilty
 Always contains “=” , “≤” or “” signs
 May or may not be rejected
The Alternative Hypothesis, H1

 A hypothesis that is constructed


opposite of the null hypothesis.
 It is constructed by researcher against to
null hypothesis.
◦ e.g.: The average number of TV sets in U.S.
homes is less than 3 ( H1: µ < 3 )
 Never contains the “=” , “≤” or “” signs
 Always contains the “≠”, “<“, or “>” signs
 May or may not be accepted
Formulating Hypotheses

 Example 1: An tube light manufacturer claims


that the tube lights produced by his company
has an average life time of at least 1400 hours.
 What is the appropriate hypothesis to be
tested?
Formulating Hypotheses

 Example 1:An tube light manufacturer claims that the tube lights produced by his
company has an average life time of at least 1400 hours.

 What is the appropriate test?

H0: µ ≥ 1400 hours


H1: µ < 1400 hours

If the null hypothesis is rejected, we will conclude that the


lifetime of tube lights is not according to the claim of
company.
Formulating Hypotheses

 Example 2: The average annual income of


buyers of Ford F150 pickup trucks is claimed
to be $65,000 per year. An industry analyst
would like to test this claim.

 What is the appropriate hypothesis test?


Formulating Hypotheses
 Example 1: The average annual income of buyers of Ford F150 pickup
trucks is claimed to be $65,000 per year. An industry analyst would like
to test this claim.

 What is the appropriate test?

H0: µ = 65,000$ (income is as claimed)


HA: µ ≠ 65,000$ (income is different than claimed)

 The analyst will believe the claim unless


sufficient evidence is found to discredit it.
Hypothesis Testing Process

Claim: the population mean age is 50.

Null Hypothesis: H0: µ = 50

Population

Now select a random sample:

Sample

Suppose the sample mean Is x = 20 If not likely,


age is 20:
x = 20 likely if REJECT

µ = 50? Null Hypothesis


Reason for Rejecting H0
Sampling Distribution of x

x
20 μ = 50
If H0 is true ... then we reject the
If it is unlikely that we
null hypothesis that μ
would get a sample mean
= 50.
of this value ... ... if in fact this were
the population mean…
Errors in Making Decisions

 Type I Error
◦ If we reject a true null hypothesis, it is called
type-I error.
◦ Considered a serious type of error
The type I error is denoted by 
 Called level of significance of the test
 Set by researcher in advance
Errors in Making Decisions

 Type II Error
◦ If we fail to reject a false null hypothesis
Or we accept a false null hypothesis
Type II error is denoted by β
Outcomes and Probabilities
Possible Hypothesis Test Outcomes

State of Nature

Decision H0 True H0 False

Do Not
No error Type II Error
Reject (1 -  ) (β)
Key:
Outcome H0
(Probability)
Reject Type I Error No Error
H0 ( ) (1-β)

Business Statistics: A Decision-


Making Approach, 7e © 2008
Prentice-Hall, Inc. Chap 9-14
Type I & II Error Relationship

 Type I and Type II errors cannot happen at


the same time
 Type I error can only occur if H0 is true
 Type II error can only occur if H0 is false

If Type I error probability (  ) , then


Type II error probability ( β )
Level of Significance, 

 It is the probability of rejecting a true null


hypothesis
 Is designated by  , (level of significance)
◦ Typical values are 0.01, 0.05, or 0.10
◦ Defines rejection region of the sampling distribution
 Is selected by the researcher at the beginning of
testing of hypothesis
 Provides the critical value(s) of the test
Process of Hypothesis Testing

 1. Formulate the null and alternative hypotheses


 2. Specify the desired significance level, α
 3. Define the test to be used
 4. Define the rejection region
 5. Take a random sample and determine
whether or not the sample result is in the
rejection region
 6. Reach a decision and draw a conclusion
Rejection and Acceptance Regions
 Rejection Region:
 Rejection region contains set of values for
which null hypothesis is to be rejected. That
is, if the sample results fall in this region, the
null hypothesis tends to be rejected.
 Acceptance Region:
 It specifies those set of values for which a
null hypothesis is accepted.
 Critical Value:
 A value that separates both rejection and
acceptance region is called critical value.
Level of Significance
and the Rejection Regions
Level of significance = 
Lower tail Upper tail
test/one tail test/one tail Two tailed test
test test
Example: Example: Example:
H0 : μ ≥ 3 H0 : μ ≤ 3 H0 : μ = 3
HA: μ < 3 HA: μ > 3 H A: μ ≠ 3

  /2 /2
-zα 0 0 zα -zα/2 0 zα/2

Do not Do not Do not


Reject H0 Reject H0 Reject H0 Reject H0
reject H0 reject H0 reject H0
One tailed and two tailed test
 If the rejection region is located at only
one tail of the test statistic then the test
is called one tail test.
 If the rejection region is located at both
the tails of the test statistic then the test
is called two tailed test.
Null and Alternative Hypotheses
 Formulate the null and alternative
hypothesis in each of the following:
 Average domestic consumption of electricity is 50
units per months.
 Average age of first year students is 18 years.
 Average height of the students is 5.6 feet or less.
 The mean marks of the students are 70.
 The average age of the parliament members is at
least 50 years.
 Is the average height of Lahore Policemen is 5.75
feet or more?
 Average lifespan today is greater than 70 years.

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