Hypothesis Testing with Confidence-ECO6416

Hypothesis Testing with Confidence-ECO6416 - The process of...

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Hypothesis Testing with Confidence One of the main advantages of constructing a confidence interval (CI) is to provide a degree of confidence for the point estimate for the population parameter. Moreover, one may utilize CI for the test of hypothesis purposes. Suppose you wish to test the following general test of hypothesis: H 0 : The population parameter is almost equal to a given claimed value, against the alternative: H a : The population parameter is not even close to the claimed value.
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Unformatted text preview: The process of executing the above test of hypothesis at level of significance using CI is as follows: 1. Ignore the claimed value in the null hypothesis, for the time being. 2. Construct a 100(1- )% confidence interval based on the available data. 3. If the constructed CI does not contain the claimed value, then there is enough evidence to reject the null hypothesis; otherwise, there is no reason to reject the null hypothesis....
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This note was uploaded on 10/06/2011 for the course ECO 6416 taught by Professor Staff during the Spring '08 term at University of Central Florida.

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