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Topic 7 Overview - wiki

Topic 7 Overview - wiki - Hypothesis Testing 1 Form...

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Hypothesis Testing 1. Form hypotheses (null and alternative) 2. Find test statistic (value from sample data on which decision is based z-test (if it follows Z distribution) t-test (if it follows T distribution) χ 2 -test (if it follows χ 2 distribution) 3. Find rejection region 4. Reach conclusion Significance Level α represents "significance level" and is usually predetermined. It is the probability that we make a type 1 error (see below). 2 types of errors: 1. Rejecting the null hypothesis when the null hypothesis is true 2. Fail to reject the null hypothesis although the null hypothesis is false Case 1: Normal population with known σ Null hypothesis: Test Statistic: Rejection Region: Case 2: Large Sample Similar to Case 1, but we use our sample standard deviation instead of σ Null hypothesis: Test Statistic: Rejection Region: Case 3: Normal population with unknown σ and small sample Similar to Case 2, only we use t-test instead of z-test.

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