HYPOTHESIS TESTING

Quantitative Analysis / Statistical Techniques

OVERVIEW

Hypothesis
Hypothesis Testing Types of Hypotheses Null, Alternate Example of Hypotheses

Type I & Type II Errors (Level of Significance) , and the inter-relationship

Interpreting Results (Weight of evidence from p-value)

HYPOTHESIS
What do you mean by a Hypothesis?
A hypothesis is a proposition that is

assumed as a premise in an argument / claim set forth as an explanation for the occurrence of some

specified group of phenomena

HYPOTHESIS TESTING
Why do we make hypotheses?

The practice of science traditionally involves formulating and testing hypotheses Hypotheses are assertions that are capable of being proven false using a test of observed data

Definition
The process of proving assertions false using a test of observed data (sample data) is called Hypothesis Testing

TYPES OF HYPOTHESIS
Null Hypothesis

The null hypothesis typically corresponds to a general or default position Making this assertion will make no difference and hence cannot be proven positively

Alternate Hypothesis

An alternate hypothesis asserts a rival relationship between the phenomena measured by the null hypothesis It need not be a logical negation of the null hypothesis as it only helps in rejecting or not rejecting the null hypothesis

EXAMPLES OF HYPOTHESES
Null Hypothesis
Ho : Mean Sea Level trend is 5.38 mm / year

Alternate Hypothesis
Ha : Mean Sea Level trend is not 0.72 mm / year
The in this case maybe assumed as 0.05 to reject the Null Hypothesis with a 95% confidence level

TYPES OF ERRORS
What are errors in Hypothesis Testing?
The purpose of Hypothesis Testing is to reject or not reject the Null Hypothesis based on statistical evidence Hypothesis Testing is said to have resulted in an error when the decision regarding treatment of the Null Hypothesis is wrong

Type-I Error (Ho right but rejected)

When Null Hypothesis is rejected despite the test on data showing that the outcomes was true

Type-II Error (Ho wrong but not rejected)

When Null Hypothesis is not rejected despite the test on data showing that the outcomes was false

, AND THE INTER-RELATIONSHIP

During the Hypothesis Testing,
is the probability of occurrence of a Type-I Error

is the probability of occurrence of a Type-II Error

Relationship between and

For a fixed sample size, the lower we set value of , the higher is the value of and vice-versa In many cases, it is difficult or almost impossible to calculate the value of and hence we usually set only

INTERPRETING RESULTS
Interpreting the weight of evidence against the Null Hypothesis for rejecting / not rejecting Ho
If the p-value for testing Ho is less than

< 0.10, we have some evidence that Ho is false

< 0.05, we have strong evidence that Ho is false

< 0.01, we have very strong evidence that Ho is false < 0.001, we have extremely strong evidence that Ho is false

To be continued