Hypothesis testing

Presented by
Tabu Joseph

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 What is a hypothesis?

A hypothesis is a statement of the

researchers prediction or guess of the
relation that exists among the variables
being investigated.

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 Null hypothesis
This type of hypothesis states that a
parameter has some precise value:
1.The value that occurred in the past
2.The value claimed by some person
3.The target value that is supposed to
occur

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 Null hypothesis
The null hypothesis specifies a particular
value for some population parameter
for example; Ho : = 520

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 Alternative hypothesis
The alternative hypothesis is denoted by
symbol H1
it specifies a range of values
This type of hypothesis involves the use of one
of the signs >, < or
For example H1: 520 or
H1: > 520

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 Hypothesis testing
Hypothesis tests in which H1 involves
either a < sign or > sign are called two-
tailed tests
Hypothesis tests in which H1 involves a
sign are called two-tailed tests

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 Hypotheses testing
Hypothesis testing starts by making a
statement describing some aspect of the
population. A sample is then taken from
the population to see if evidence can
support the hypothesis.

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 Steps in hypothesis testing
State the null hypothesis and alternative
hypothesis
Specify the level of significance to be
used
Calculate the acceptance range for the
variable tested

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 Steps in hypothesis testing
Find the actual value for the variable
tested
Decide whether to accept or reject the
null hypothesis
State the conclusion reached

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 Errors in hypothesis testing
We may reject a null hypothesis that is
true: this is a type 1 error The probability
of making a type 1 error also called the
level of significance of the test is usually
denoted by i.e. = P(Ho is rejected/Ho
is true)

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 Type II error
We may accept a null hypothesis that is
false: this is a type II error.
Type II error is committed when a null
hypothesis that is false in the population
is erroneously accepted on the basis of
the sample data.

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 Level of significance
The level of significance, , is chosen by
the researcher. Such a choice is
dependent on the risk involved in
rejecting a null hypothesis, which is true.
An value of 0.05 is usually accepted.

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 Level of significance
When is 5%, it means that the
probabilities of accepting and rejecting
H0, when using the procedure are 95%
and 5% respectively

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 The normal distribution
The normal distribution is the a
probability distribution that is generated
by a continuous variable.

The normal probability distribution or

normal curve has the a mean and
standard deviation

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The normal curve

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 The normal curve
The normal curve has the following
characteristics;
-the total area under the curve is one
- the curve is symmetric about the
mean.

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 The normal curve
That is, the line which passes through
the mean and divides the area into
two equal parts
- the line is asymptotic about the
horizontal axis

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 Z- test
Suppose x is the mean of a random
sample of size n from a population which
is normally distributed with mean and
variance 2 then;
Z=x-
/n
Z is referred to as the test statistic

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 Critical region and critical values
A critical region is a set of values for z
which tells us to reject Ho
Critical values are the boundaries of the
critical region

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 Critical region and critical values
If the value of Z falls in the critical region
then the result is said to be significant. If
the significance level were % then the
result would be described as being
significant at the % level

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 Hypothesis testing
example
The average income per capita in an area
is claimed to be 15,000. A sample of 45
people found their mean income to be
14,300 with a standard deviation of
2,000. use a 5% significance level to
check the original claim.

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 Example
State the null and alternative hypotheses
HO: = 15000 H1: 15000

Specify the level of significance to be used

this is given at 5%
Calculate the acceptance range for the
variable tested
the range for Z is between -1.96 and 1.96

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 Example
Find the actual value for the variable tested
Using Z=x-
/n
Z = 14300 15000
2000/45
Z = - 2.35

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 Example
Decide whether to accept or reject the null
hypothesis
the actual value is outside the
acceptance range (-1.96 and 1.96),
so the null hypothesis must be rejected

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 Example
State the conclusion reached
the evidence from the sample does
not support the original claim that
the average income per capita in the
area is 15000

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