7. Hypothesis testing

Question 1

During hypothesis testing, what are the two hypotheses?

Answer 1

Null hypothesis: Ho, assumed to be correct

Alternative hypothesis: H1, tells you about the the parameter if your assumption is shown to be wrong

Question 2

What is the difference between a one-tailed and two-tailed test?

Answer 2

One-tailed = H1: p < and H1: p >

Two tailed tests = H1: p ≠

Question 3

What are the steps during a one-tailed hypothesis test?

Answer 3

Formulate a model for the test statistic
Identify a suitable null and alternative hypotheses
Calculate the probability of the test statistic taking the observed value (or higher/lower), assuming the null hypothesis is true
Compare this to the significance level
Write a conclusion in the context of the question
Alternatively: find the critical region and see whether the observed value of the test statistic lies inside it

Question 4

What is a critical region?

Answer 4

A region of the probability distribution which, if the test statistic falls within it, would cause you to reject the null hypothesis

Question 5

What is the critical value?

Answer 5

The first value to fall inside of the critica region

Question 6

What are the steps during a two-tailed hypothesis test?

Answer 6

Same as the one-tailed test
Except you need to halve the significance level at the end you are testing
Check which end you are supposed to be testing

Question 7

What do you do if the percentage found during hypothesis testing is inside the critical region?

Answer 7

Reject the null hypothesis
Accept the alternative hypothesis
Due to insufficient evidence