Hypothesis Testing-Rejecting a Claim-ECO6416

# Hypothesis Testing-Rejecting a Claim-ECO6416 - Hypothesis...

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Hypothesis Testing: Rejecting a Claim To perform a hypothesis test, one must be very specific about the test one wishes to perform. The null hypothesis must be clearly stated, and the data must be collected in a repeatable manner. If there is any subjectivity, the results are technically not valid. All of the analyses, including the sample size, significance level, the time, and the budget, must be planned in advance, or else the user runs the risk of “data diving". Hypothesis testing is mathematical proof by contradiction. For example, for a Student's t test comparing two groups, we assume that the two groups come from the same population (same means, standard deviations, and in general same distributions). Then we do our best to prove that this assumption is false. Rejecting H 0 means either H 0 is false, or a rare event as has occurred. The real question is in statistics not whether a null hypothesis is correct, but whether it is close enough to be used as an approximation. Test of Hypotheses

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## This note was uploaded on 10/05/2011 for the course ECO 6416 taught by Professor Staff during the Spring '08 term at University of Central Florida.

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Hypothesis Testing-Rejecting a Claim-ECO6416 - Hypothesis...

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