Hypothesis
Hypothesis
RAM KUMAR
ASSISTANT PROFESSOR
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In this session ….
4. To test the validity of our assumption we determine the difference between the
hypothesis parameter value and the sample value.)
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HYPOTHESIS
TESTING
State the hypothesized value of the All possible alternatives other than
parameter before sampling. the null hypothesis.
The assumption we wish to test (or E.g µ ≠ 20
the assumption we are trying to
reject) µ > 20
E.g population mean µ = 20 µ < 20
There is no difference between There is a difference between coke
coke and diet c and diet coke
oke
Null Hypothesis 6
• The Null hypothesis H0 represents a theory that has been put forward either
because it is believed to be true.
• For example, in a clinical trial of a new drug, the null hypothesis might be that the
new drug is no better, on average, than the current drug. We would write
• Significance level refers to the percentage of sample means that is outside certain
prescribed limits.
We reject the null hypothesis if it falls in the two regions of area 0.025.
Do not reject the null hypothesis if it falls within the region of area 0.95.
• The higher the level of significance, the higher is the probability of rejecting the null
hypothesis when it is true.
(acceptance region narrows)
Type I and Type II Errors 9
1. Type I error refers to the situation when we reject the null hypothesis when it is true
(H0 is wrongly rejected).
e. g. H0: there is no difference between the two drugs on average.
Type I error will occur if we conclude that the two drugs produce different effects when
actually there isn’t a difference.
Prob (Type I error) = significance level = α
2. Type II error refers to the situation when we accept the null hypothesis when it is
false.
H0: there is no difference between the two drugs on average.
Type II error will occur if we conclude that the two drugs produce the same effect when
actually there is a difference.
Prob (Type II error) = ß
In the context of testing of hypothesis, there are basically two types of 10
errors we
can make:-
Prescriptive testing
is used to increase the level of confidence, which in turn reduces Type I errors. The
chances of making a Type I error are reduced by increasing the level of confidence.
Reducing Type II Errors 19
Descriptive testing is used to better describe the test condition and acceptance criteria,
which in turn reduces Type II errors.
This increases the number of times we reject the Null hypothesis – with a resulting
increase in the number of Type I errors
(rejecting H0 when it was really true and should not have been rejected).
Type I and Type II Errors – Example 20
• Your null hypothesis is that the battery for a heart pacemaker has an average life of
300 days, with the alternative hypothesis that the average life is more than 300 days.
• You are the quality control manager for the battery manufacturer.
• Would you rather make a Type I error or a Type II error?
• Based on your answer to part (a), should you use a high or low significance level?
Type I and Type II Errors – Example 21
Many statisticians are now adopting a third type of error, a type III
When Null hypothesis was rejected for the wrong reason.
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