Hypothesis Testing PowerPoint Presentation

Hypothesis Test for Means

• A statistical hypothesis is an assertion about a parameter of a population.
• Hypothesis testing is an application of statistical inference which forms a major part of statistics.
• It provides a well structured analytical method for making decision about population means.

 Types of Hypothesis

• NULL HYPOTHESIS: the statement about the population parameter that will be assumed to be true during the conduct of the hypothesis test. Its denoted by H0.
• ALTERNATIVE HYPOTHESIS: the hypothesis that includes all population values not included in the null hypothesis. It is denoted by H1.
• Examples
• The box cereal has a mean fill of 16 ounce. H0: µ = 16   H1: µ ≠ 16
• Good year’s tire will last longer than its competitors, or more than 60,000 miles, H0: µ ≤ 60,000   H1: µ > 60,000

Steps to Formulating the Null and Alternative Hypothesis

• The population parameter of interest (µ, ρ,σ ) must be identified
• The hypothesis of interest to the researcher or the analyst must be identified
• The null hypothesis will contain the equal sign, the null hypothesis will not
• The range of the possible values for the parameter must be divided between the null and alternate hypothesis