Hypothesis Testing

Kamakshaiah Musunuru
kamakshaiah@dhruvacollege.net

November 7, 2013

Contents
0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 What is Hypothesis? . . . . . . . . . . . . 0.1.1 some understanding on hypothesis Characteristics . . . . . . . . . . . . . . . Types . . . . . . . . . . . . . . . . . . . . Error . . . . . . . . . . . . . . . . . . . . . How to take decision? . . . . . . . . . . . The issue of tails . . . . . . . . . . . . . . Test of population parameter . . . . . . . Test of population proportion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 2 2 2 2 3 3

0.1

What is Hypothesis?
A hypothesis is a proposed explanation for a phenomenon.

Wikipedia -

Andrew Chestman (Universitat Des Saarlandes) Hypothesis is a good guess at the best answer to a question, based on the most reliable facts available. In short a guest that needs to be tested. Most generally acceptable denition is A tentative proposition put forth for testing

0.1.1

some understanding on hypothesis

Hypotheses non ngo

Sir Isac Newton:

Aldous Huxley: The idea of the working hypothesis is one of the most important discoveries of modern times, which has replaced the idea of dogma and doctrine. What is abductive reasoning? explore what is abductive reasoning. Hypothesis middle path of inductive and deductive reasoning.

0.2

Characteristics

Prof. Schick and Vaughn provides ve important characteristics to hypothesis. They are, (1) Testability, (2) Parsimonity, (3) Scope, (4) Fruitfulness, (5) Conservatism.

0.3. TYPES

Test of Hypothesis

CONTENTS

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0.3

Types

The following are dierent categories of hypothesis. These categories are helpful to know types of hypothesis. Statistics: (1) Null hypothesis (Ho ) and Alternative hypothesis (H1 or Ha ), Sciences: (1) Scientic hypothesis and Working hypothesis, Theoretical construct: (1) Subjective hypothesis and Objective hypothesis. Understand each of these category by exploring more information along with few examples. The alternative hypothesis is, in fact, the study hypothesis, in other words, the interest of the researcher. The null hypothesis is the statement of no-bias or unbiased statement or the hypothesis that represents the status quo.

0.4

Error

There is an interesting aspect in statistical hypothesis testing. When hypothesis is tested (either by armation or negation) the result is not insusceptible to certain error. This error determines as how much or times we may do wrong while declaring a result (i.e. accept or reject). This aspect of error is simply observed with the help of a technical word known as signicance. In statistical hypothesis testing, there are two types of errors they are, (1) Type I (denoted with ) , (2) Type II (denoted with ) The is referred to rejecting a true null hypothesis and is referred to not rejecting a false null hypothesis. Most interesting fact is that the probabilities and are inversely related. Any attempt to decrease one leads to increase in the other. In other words; P (T ypeIError) = and P (T ypeIIError) = . More explanation is given on errors after this section.

0.5

How to take decision?

Having formulated with hypothesis (either alternative or null) one need to proceed to test (proof). We commonly refer this as test statistic. The test statistic is the criterion on which we base our decision about the hypothesis. The idea being that the test statistic is the best estimator of the parameter. If the statistics value is inconsistent with the null hypothesis we reject null hypothesis or vice versa. The test statistic depends on two dierent criteria. They are (1) If the population variance is known, (2) If the population variance is unknown. Under rst criteria mostly the test statistic is Z , otherwise, it is t. This is under the presumption that we would know population parameters if only if the size of the experiment is marginally large.

0.6

The issue of tails

The tail issue another important aspect as far as hypothesis test is concerned, because, the decision on hypothesis very much depends on the value of Z statistic. If the rejection region (need to be dened) is left (Z > Z ), then the problem or decision is treated as left tail case, if the rejection region is on right side (Z < Z ), then problem or decision is treated as right tail. Notice that the probabilities in Z table are less than probabilities ((Z < Zcritical ). Exercise on standardized normal Z variable, as how to nd Z values from normal Z table. For instance, what is the probability that Z < 1.645 i.e. P (Z < 1.645) and etc.

Kamakshaiah Musunuru

0.7. TEST OF POPULATION PARAMETER

Test of Hypothesis

CONTENTS

0.7

Test of population parameter

Hint: Try to nd the below cases are left or right tail based on the question or hypothesis. (We already discussed in the class) Example - 1: A manufacturer claims that the mean life tie of a light bulb is more than 10, 000 hours. In a sample of 30 light bulbs, it was found that they only last 9, 900 hours on average. Assume the population standard deviation is 120 hours. At 0.05 signicance level, can we reject the claim by the manufacturer? Example - 2: Suppose the food label on a cookie bag states that there is at most 2 grams of saturated fat in a single cookie. In a sample of 35 cookies, it is found that the mean amount of saturated fat per cookie is 2.1 grams. Assume that the population standard deviation is 0.25 grams. At 5 percent signicance level, can you reject claim on food label? Example - 3: Suppose a poultry owner would like to test mean weight of his/her birds. the mean weight of a bird found in his form was 2.5 Kgs. In as sample of 35 birds sometime this year in his form is 1.8 Kgs. Assume the population standard deviation 0.5 Kgs. At 5 percent signicance level can he/she reject null hypothesis that the mean bird weight doesnt dier from last year? Exercise t test for all the above three problems, assuming that the standard deviation of popultion is unknown, and that of sample is given.

0.8

Test of population proportion

At times it may not be possible to know mean and standard deviation. only a pro-portion of population is given. In such times, the researcher need to carry out test on population proportion. The proportion is denoted with P . Example - 4: Suppose 60 percent of citizens voted in last election. 85 out of 148 people in a telephone survey says that they voted in current elections. At 5 percent signicance level, can we reject the null hypothesis that the proportion of voters in the population is above 60 percent this year? Example - 5: Suppose that 12 of apples harvested in an orchard last year was rotten. 30 out of 214 apples in a harvest sample this year turns out to be rotten. At 5 percent signicance level, can we reject the null hypothesis that the proportion of rotten apples in harvest stays below 12 percent this year? Example - 6: Suppose that a coin toss turns up 12 heads out of 20 trials. At 0.05 signicance level, can one reject the null hypothesis which is that the coin toss is fair? Note: As it was discussed in the class, in business domain certain academic examples like tossing a coin, rolling a die, urn sampling appears to be illogical, hence, whenever, these examples appear the learner is suppose to imagine that these are, in fact, business experiment, i.e. each trial is a simulation of a business experiment (activity).

Kamakshaiah Musunuru