Lecture notes - ECO220Y Lecture26 Hypothesis Testing (3)...

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ECO220Y Lecture26 CO220 ectu e26 Hypothesis Testing (3) Migiwa Tanaka Reading: 11:2 1
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utline Outline Testing population mean when the population variance is known Two Approaches to Hypothesis Testing Rejection Region Method p -value Method ne il vs two il Test One-tail vs. two-tail Test Calculating the probability of a type II error 2
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alue Approach p -value Approach Measures strength of evidence against the null hypothesis (H 0 ) p -value =Probability of a test statistic at least as extreme (in the direction of H 1 ) as the one we got from a sample, presuming that H 0 is true. =Probability of Type I error=P(Z>z|H 0 is true) Small p-value sampling error is poor explanation for getting test statistics so far away from H 0 Reject H 0 in favor of H 1 if p value is small enough. 3
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dvantage of alue Approach Advantage p -value Approach p -value approach tells exact probability of making a type I error if you reject H 0 . provides quantitative information (exactly how It provides quantitative information. (exactly how sure can we be about rejecting H 0 .) j t i i h i f t Rejection region approach gives one of two Information.
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This note was uploaded on 03/03/2011 for the course ECON 220 taught by Professor Tanaka during the Spring '11 term at University of Toronto.

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Lecture notes - ECO220Y Lecture26 Hypothesis Testing (3)...

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