Statistics 400
Tests of Statistical Hypothesis
Confidence Intervals:
•
Creates an interval where we think the true parameter we are
estimating will fall with a certain probability or level of confidence.
•
Serve the purpose when the goal is to estimate some population
parameter
If we want to TEST our data in favor or against some CLAIM we have to
use a method call Hypothesis Testing.
Hypothesis Testing:
•
Formal procedure for comparing observed data with a
hypothesis
whose truth we want to assess
•
Hypothesis:
statement about the parameters in the population or
model
•
Results of Test:
expressed in terms of a probability that measures
how well the data and the hypothesis agree
Example:
Some years ago the government made a claim that the average
income of the American people was $33,950. This would imply that
Americans were doing worse than the reported average income was found to
be $34, 076. A need arose to check to see if the government was
understating the values of income.
In a sample size of 50 people, the
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 Fall '05
 TBA
 Statistics, Probability, Statistical hypothesis testing, Ma Lecture

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