Please be prepared to have exercises every class

meeting
This means bringing your formula sheets,
statistics tables and calculators EVERY MEETING
Exercises every class meeting will be offsetting
quizzes for this part of IE 27

Todays Agenda:
Hypothesis Testing

HAVE YOU EVER BEEN REJECTED?

#AWTSU

Hypothesis
Testing

Parameter Estimation

Hypothesis Testing

We are guessing the

true value of a
parameter using a test
statistic either by
giving an exact value
(Point Estimation) or a
range of values
(Confidence Intervals)

Given an initial guess of

the true value of a
parameter we will test
whether that guess is
correct

Hypothesis
Testing

The uses of Hypothesis Testing

Whether to accept a statistical hypothesis
To test the statistical significance of a certain
value

Hypothesis
Testing
You are given the Third exam scores of 10 randomly selected IE
27 students. Test if the mean score for the third long exam is
eqaul to the passing rate ( = 56)
The average exam score (Xbar) is a random variable
The average exam score (Xbar) is also a sample statistic
In hypothesis testing we also call a sample statistic as a TEST
STATISTIC as it will be used to test the hypothesis
Our Hypothesis (Ho) is that the mean score of 46 students is
equal than 56 (Ho: = 56)

Hypothesis
Testing
You are given the Third exam scores of 10 randomly selected IE
27 students. Test if the mean score for the third long exam is
passing ( = 56)
In Hypothesis Testing we create two hyoptheses
Null Hypothesis
Ho: = 56
Alternative Hypothesis
H1: 56
We are sure that only ONE of these is true

Hypothesis
Testing
You are given the Third exam scores of 10 randomly selected IE
27 students. Test if the mean score for the third long exam is
passing ( = 56)
Null Hypothesis

Alternative Hypothesis

Ho: = 56

H1: 56

In Hypothesis Testing we either, REJECT THE NULL HYPOTHESIS

or FAIL TO REJECT THE NULL HYPOTHESIS at a certain level of
significance
We do not say that we Accept the Null Hypothesis because at
a certain level of significance it may lead us to reject the null
hypothesis
REJECTION IS SUCH A STRONG CONCLUSION
at alam naman nating masakit mareject

Hypothesis
Testing
You are given the Third exam scores of 10 randomly selected IE
27 students. Test if the mean score for the third long exam is
passing ( = 56)
Null Hypothesis

Alternative Hypothesis

Ho: = 56

H1: 56

In hypothesis testing, a rejection region is computed and the

test statistic is compared

Hypothesis
Testing

Type I Error (Alpha

Error)
Rejecting the null hypothesis when the null
hypothesis is actually true

Type II Error (Beta Error)

Accepting the null hypothesis when the null
hypothesis is actually fallse

Hypothesis
Testing

Alpha
Reject when
True
Beta
Accept when
False

Decision

Ho is
True

Ho is
False

Reject Ho

Type I
Error

no error

Fail to
reject Ho

no error

Type II
Error

Hypothesis
Testing

Decision

Student is good

Student is bad

Fail a student

Type I Error

no error

Pass a student

no error

Type II Error

Decision

Mr./Ms. Right

Mr./Ms. Right
Now

Pinakawalan mo

Type I Error

no error

Kayo na Forever

no error

Type II Error

Hypothesis
Testing

Type I Error
Suppose this is the distribution of the true population mean
= 60

Suppose we set that = 5%, thus the corresponding critical

region is as follows
In hypothesis testing, a is set by the analyst

Hypothesis
Testing

Type II Error
Suppose this is the distribution of the true population mean
= 63
But Ho states that = 60

Suppose the critical values are 57.5 and 62.5, we do not reject
Ho if the sample statistic is within those limits

Hypothesis
Testing

Analyzing Type I & II Error

Unlike Alpha, Beta is dependent on the true mean of the
parameter
Since the probability of not rejecting the null hypothesis is not
set by the analyst but a function of both the sample size and
the critical values, the acceptance of the null hypothesis is a
weak conclusion

Hypothesis
Testing

Analyzing Type I & II Error

If the critical region becomes smaller, the probability of Type I

Error, alpha, reduces

Hypothesis
Testing

Analyzing Type I & II Error

If the true value of the parameter approaches the value

hypothesized in the null hypothesis, the probability of Type II
Error, beta, increases
If the difference between the true mean and hypothesized
value increases, the probability of Type II Error, beta, decreases

Hypothesis
Testing

Analyzing Type I & II Error

If we increase sample size, the sample distribution tends to

approach the population distribution
If we increase sample size and retain confidence level, both
alpha and beta reduces (more accurate, less error)

Hypothesis
Testing

Analyzing Type I & II Error

If only one of the null and alternative hypothesis is correct, it

means the error associated with them are related
If sample size is constant, an increase in the probability of
one type of error results in a decrease in the probability of
the other

Hypothesis
Testing

Power of a Statistical
test
Correctly rejecting the null hypothesis when
it is false
Power is the probability to detect whether
a hypothesized value is really far from the
true value
A statistical test with higher power is
desired. Increasing sample size or increasing
alpha will result to a higher powered test
Power = 1

Hypothesis
Testing

General Procedure for Hypothesis testing

Step
1:
Step
2:
Step
3:
Step
4:
Step
5:
Step
6:
Step
7:
Step

Determine the Parameter of Interest

State the Null Hypothesis
State the Alternative Hypothesis
Determine Alpha
Determine Test Statistic
Determine Rejection Region
Compute Test Statistic
Conclude

Next Time on IE 27
Solving Hypothesis testing

Sourc: Taha

.Fin.