steps of hypothesis testing with example

Hypothesis Testing

Hypothesis testing is a tool for making statistical inferences about the population data. It is an analysis tool that tests assumptions and determines how likely something is within a given standard of accuracy. Hypothesis testing provides a way to verify whether the results of an experiment are valid.

A null hypothesis and an alternative hypothesis are set up before performing the hypothesis testing. This helps to arrive at a conclusion regarding the sample obtained from the population. In this article, we will learn more about hypothesis testing, its types, steps to perform the testing, and associated examples.

What is Hypothesis Testing in Statistics?

Hypothesis testing uses sample data from the population to draw useful conclusions regarding the population probability distribution . It tests an assumption made about the data using different types of hypothesis testing methodologies. The hypothesis testing results in either rejecting or not rejecting the null hypothesis.

Hypothesis Testing Definition

Hypothesis testing can be defined as a statistical tool that is used to identify if the results of an experiment are meaningful or not. It involves setting up a null hypothesis and an alternative hypothesis. These two hypotheses will always be mutually exclusive. This means that if the null hypothesis is true then the alternative hypothesis is false and vice versa. An example of hypothesis testing is setting up a test to check if a new medicine works on a disease in a more efficient manner.

Null Hypothesis

The null hypothesis is a concise mathematical statement that is used to indicate that there is no difference between two possibilities. In other words, there is no difference between certain characteristics of data. This hypothesis assumes that the outcomes of an experiment are based on chance alone. It is denoted as \(H_{0}\). Hypothesis testing is used to conclude if the null hypothesis can be rejected or not. Suppose an experiment is conducted to check if girls are shorter than boys at the age of 5. The null hypothesis will say that they are the same height.

Alternative Hypothesis

The alternative hypothesis is an alternative to the null hypothesis. It is used to show that the observations of an experiment are due to some real effect. It indicates that there is a statistical significance between two possible outcomes and can be denoted as \(H_{1}\) or \(H_{a}\). For the above-mentioned example, the alternative hypothesis would be that girls are shorter than boys at the age of 5.

Hypothesis Testing P Value

In hypothesis testing, the p value is used to indicate whether the results obtained after conducting a test are statistically significant or not. It also indicates the probability of making an error in rejecting or not rejecting the null hypothesis.This value is always a number between 0 and 1. The p value is compared to an alpha level, \(\alpha\) or significance level. The alpha level can be defined as the acceptable risk of incorrectly rejecting the null hypothesis. The alpha level is usually chosen between 1% to 5%.

Hypothesis Testing Critical region

All sets of values that lead to rejecting the null hypothesis lie in the critical region. Furthermore, the value that separates the critical region from the non-critical region is known as the critical value.

Hypothesis Testing Formula

Depending upon the type of data available and the size, different types of hypothesis testing are used to determine whether the null hypothesis can be rejected or not. The hypothesis testing formula for some important test statistics are given below:

• z = \(\frac{\overline{x}-\mu}{\frac{\sigma}{\sqrt{n}}}\). \(\overline{x}\) is the sample mean, \(\mu\) is the population mean, \(\sigma\) is the population standard deviation and n is the size of the sample.
• t = \(\frac{\overline{x}-\mu}{\frac{s}{\sqrt{n}}}\). s is the sample standard deviation.
• \(\chi ^{2} = \sum \frac{(O_{i}-E_{i})^{2}}{E_{i}}\). \(O_{i}\) is the observed value and \(E_{i}\) is the expected value.

We will learn more about these test statistics in the upcoming section.

Types of Hypothesis Testing

Selecting the correct test for performing hypothesis testing can be confusing. These tests are used to determine a test statistic on the basis of which the null hypothesis can either be rejected or not rejected. Some of the important tests used for hypothesis testing are given below.

Hypothesis Testing Z Test

A z test is a way of hypothesis testing that is used for a large sample size (n ≥ 30). It is used to determine whether there is a difference between the population mean and the sample mean when the population standard deviation is known. It can also be used to compare the mean of two samples. It is used to compute the z test statistic. The formulas are given as follows:

• One sample: z = \(\frac{\overline{x}-\mu}{\frac{\sigma}{\sqrt{n}}}\).
• Two samples: z = \(\frac{(\overline{x_{1}}-\overline{x_{2}})-(\mu_{1}-\mu_{2})}{\sqrt{\frac{\sigma_{1}^{2}}{n_{1}}+\frac{\sigma_{2}^{2}}{n_{2}}}}\).

Hypothesis Testing t Test

The t test is another method of hypothesis testing that is used for a small sample size (n < 30). It is also used to compare the sample mean and population mean. However, the population standard deviation is not known. Instead, the sample standard deviation is known. The mean of two samples can also be compared using the t test.

• One sample: t = \(\frac{\overline{x}-\mu}{\frac{s}{\sqrt{n}}}\).
• Two samples: t = \(\frac{(\overline{x_{1}}-\overline{x_{2}})-(\mu_{1}-\mu_{2})}{\sqrt{\frac{s_{1}^{2}}{n_{1}}+\frac{s_{2}^{2}}{n_{2}}}}\).

Hypothesis Testing Chi Square

The Chi square test is a hypothesis testing method that is used to check whether the variables in a population are independent or not. It is used when the test statistic is chi-squared distributed.

One Tailed Hypothesis Testing

One tailed hypothesis testing is done when the rejection region is only in one direction. It can also be known as directional hypothesis testing because the effects can be tested in one direction only. This type of testing is further classified into the right tailed test and left tailed test.

Right Tailed Hypothesis Testing

The right tail test is also known as the upper tail test. This test is used to check whether the population parameter is greater than some value. The null and alternative hypotheses for this test are given as follows:

\(H_{0}\): The population parameter is ≤ some value

\(H_{1}\): The population parameter is > some value.

If the test statistic has a greater value than the critical value then the null hypothesis is rejected

Left Tailed Hypothesis Testing

The left tail test is also known as the lower tail test. It is used to check whether the population parameter is less than some value. The hypotheses for this hypothesis testing can be written as follows:

\(H_{0}\): The population parameter is ≥ some value

\(H_{1}\): The population parameter is < some value.

The null hypothesis is rejected if the test statistic has a value lesser than the critical value.

Two Tailed Hypothesis Testing

In this hypothesis testing method, the critical region lies on both sides of the sampling distribution. It is also known as a non - directional hypothesis testing method. The two-tailed test is used when it needs to be determined if the population parameter is assumed to be different than some value. The hypotheses can be set up as follows:

\(H_{0}\): the population parameter = some value

\(H_{1}\): the population parameter ≠ some value

The null hypothesis is rejected if the test statistic has a value that is not equal to the critical value.

Hypothesis Testing Steps

Hypothesis testing can be easily performed in five simple steps. The most important step is to correctly set up the hypotheses and identify the right method for hypothesis testing. The basic steps to perform hypothesis testing are as follows:

• Step 1: Set up the null hypothesis by correctly identifying whether it is the left-tailed, right-tailed, or two-tailed hypothesis testing.
• Step 2: Set up the alternative hypothesis.
• Step 3: Choose the correct significance level, \(\alpha\), and find the critical value.
• Step 4: Calculate the correct test statistic (z, t or \(\chi\)) and p-value.
• Step 5: Compare the test statistic with the critical value or compare the p-value with \(\alpha\) to arrive at a conclusion. In other words, decide if the null hypothesis is to be rejected or not.

Hypothesis Testing Example

The best way to solve a problem on hypothesis testing is by applying the 5 steps mentioned in the previous section. Suppose a researcher claims that the mean average weight of men is greater than 100kgs with a standard deviation of 15kgs. 30 men are chosen with an average weight of 112.5 Kgs. Using hypothesis testing, check if there is enough evidence to support the researcher's claim. The confidence interval is given as 95%.

Step 1: This is an example of a right-tailed test. Set up the null hypothesis as \(H_{0}\): \(\mu\) = 100.

Step 2: The alternative hypothesis is given by \(H_{1}\): \(\mu\) > 100.

Step 3: As this is a one-tailed test, \(\alpha\) = 100% - 95% = 5%. This can be used to determine the critical value.

1 - \(\alpha\) = 1 - 0.05 = 0.95

0.95 gives the required area under the curve. Now using a normal distribution table, the area 0.95 is at z = 1.645. A similar process can be followed for a t-test. The only additional requirement is to calculate the degrees of freedom given by n - 1.

Step 4: Calculate the z test statistic. This is because the sample size is 30. Furthermore, the sample and population means are known along with the standard deviation.

z = \(\frac{\overline{x}-\mu}{\frac{\sigma}{\sqrt{n}}}\).

\(\mu\) = 100, \(\overline{x}\) = 112.5, n = 30, \(\sigma\) = 15

z = \(\frac{112.5-100}{\frac{15}{\sqrt{30}}}\) = 4.56

Step 5: Conclusion. As 4.56 > 1.645 thus, the null hypothesis can be rejected.

Hypothesis Testing and Confidence Intervals

Confidence intervals form an important part of hypothesis testing. This is because the alpha level can be determined from a given confidence interval. Suppose a confidence interval is given as 95%. Subtract the confidence interval from 100%. This gives 100 - 95 = 5% or 0.05. This is the alpha value of a one-tailed hypothesis testing. To obtain the alpha value for a two-tailed hypothesis testing, divide this value by 2. This gives 0.05 / 2 = 0.025.

Related Articles:

• Probability and Statistics
• Data Handling

Important Notes on Hypothesis Testing

• Hypothesis testing is a technique that is used to verify whether the results of an experiment are statistically significant.
• It involves the setting up of a null hypothesis and an alternate hypothesis.
• There are three types of tests that can be conducted under hypothesis testing - z test, t test, and chi square test.
• Hypothesis testing can be classified as right tail, left tail, and two tail tests.

Examples on Hypothesis Testing

• Example 1: The average weight of a dumbbell in a gym is 90lbs. However, a physical trainer believes that the average weight might be higher. A random sample of 5 dumbbells with an average weight of 110lbs and a standard deviation of 18lbs. Using hypothesis testing check if the physical trainer's claim can be supported for a 95% confidence level. Solution: As the sample size is lesser than 30, the t-test is used. \(H_{0}\): \(\mu\) = 90, \(H_{1}\): \(\mu\) > 90 \(\overline{x}\) = 110, \(\mu\) = 90, n = 5, s = 18. \(\alpha\) = 0.05 Using the t-distribution table, the critical value is 2.132 t = \(\frac{\overline{x}-\mu}{\frac{s}{\sqrt{n}}}\) t = 2.484 As 2.484 > 2.132, the null hypothesis is rejected. Answer: The average weight of the dumbbells may be greater than 90lbs
• Example 2: The average score on a test is 80 with a standard deviation of 10. With a new teaching curriculum introduced it is believed that this score will change. On random testing, the score of 38 students, the mean was found to be 88. With a 0.05 significance level, is there any evidence to support this claim? Solution: This is an example of two-tail hypothesis testing. The z test will be used. \(H_{0}\): \(\mu\) = 80, \(H_{1}\): \(\mu\) ≠ 80 \(\overline{x}\) = 88, \(\mu\) = 80, n = 36, \(\sigma\) = 10. \(\alpha\) = 0.05 / 2 = 0.025 The critical value using the normal distribution table is 1.96 z = \(\frac{\overline{x}-\mu}{\frac{\sigma}{\sqrt{n}}}\) z = \(\frac{88-80}{\frac{10}{\sqrt{36}}}\) = 4.8 As 4.8 > 1.96, the null hypothesis is rejected. Answer: There is a difference in the scores after the new curriculum was introduced.
• Example 3: The average score of a class is 90. However, a teacher believes that the average score might be lower. The scores of 6 students were randomly measured. The mean was 82 with a standard deviation of 18. With a 0.05 significance level use hypothesis testing to check if this claim is true. Solution: The t test will be used. \(H_{0}\): \(\mu\) = 90, \(H_{1}\): \(\mu\) < 90 \(\overline{x}\) = 110, \(\mu\) = 90, n = 6, s = 18 The critical value from the t table is -2.015 t = \(\frac{\overline{x}-\mu}{\frac{s}{\sqrt{n}}}\) t = \(\frac{82-90}{\frac{18}{\sqrt{6}}}\) t = -1.088 As -1.088 > -2.015, we fail to reject the null hypothesis. Answer: There is not enough evidence to support the claim.

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FAQs on Hypothesis Testing

What is hypothesis testing.

Hypothesis testing in statistics is a tool that is used to make inferences about the population data. It is also used to check if the results of an experiment are valid.

What is the z Test in Hypothesis Testing?

The z test in hypothesis testing is used to find the z test statistic for normally distributed data . The z test is used when the standard deviation of the population is known and the sample size is greater than or equal to 30.

What is the t Test in Hypothesis Testing?

The t test in hypothesis testing is used when the data follows a student t distribution . It is used when the sample size is less than 30 and standard deviation of the population is not known.

What is the formula for z test in Hypothesis Testing?

The formula for a one sample z test in hypothesis testing is z = \(\frac{\overline{x}-\mu}{\frac{\sigma}{\sqrt{n}}}\) and for two samples is z = \(\frac{(\overline{x_{1}}-\overline{x_{2}})-(\mu_{1}-\mu_{2})}{\sqrt{\frac{\sigma_{1}^{2}}{n_{1}}+\frac{\sigma_{2}^{2}}{n_{2}}}}\).

What is the p Value in Hypothesis Testing?

The p value helps to determine if the test results are statistically significant or not. In hypothesis testing, the null hypothesis can either be rejected or not rejected based on the comparison between the p value and the alpha level.

What is One Tail Hypothesis Testing?

When the rejection region is only on one side of the distribution curve then it is known as one tail hypothesis testing. The right tail test and the left tail test are two types of directional hypothesis testing.

What is the Alpha Level in Two Tail Hypothesis Testing?

To get the alpha level in a two tail hypothesis testing divide \(\alpha\) by 2. This is done as there are two rejection regions in the curve.

Statistics Made Easy

Introduction to Hypothesis Testing

A statistical hypothesis is an assumption about a population parameter .

For example, we may assume that the mean height of a male in the U.S. is 70 inches.

The assumption about the height is the statistical hypothesis and the true mean height of a male in the U.S. is the population parameter .

A hypothesis test is a formal statistical test we use to reject or fail to reject a statistical hypothesis.

The Two Types of Statistical Hypotheses

To test whether a statistical hypothesis about a population parameter is true, we obtain a random sample from the population and perform a hypothesis test on the sample data.

There are two types of statistical hypotheses:

The null hypothesis , denoted as H 0 , is the hypothesis that the sample data occurs purely from chance.

The alternative hypothesis , denoted as H 1 or H a , is the hypothesis that the sample data is influenced by some non-random cause.

Hypothesis Tests

A hypothesis test consists of five steps:

1. State the hypotheses. 

State the null and alternative hypotheses. These two hypotheses need to be mutually exclusive, so if one is true then the other must be false.

2. Determine a significance level to use for the hypothesis.

Decide on a significance level. Common choices are .01, .05, and .1. 

3. Find the test statistic.

Find the test statistic and the corresponding p-value. Often we are analyzing a population mean or proportion and the general formula to find the test statistic is: (sample statistic – population parameter) / (standard deviation of statistic)

4. Reject or fail to reject the null hypothesis.

Using the test statistic or the p-value, determine if you can reject or fail to reject the null hypothesis based on the significance level.

The p-value  tells us the strength of evidence in support of a null hypothesis. If the p-value is less than the significance level, we reject the null hypothesis.

5. Interpret the results. 

Interpret the results of the hypothesis test in the context of the question being asked. 

The Two Types of Decision Errors

There are two types of decision errors that one can make when doing a hypothesis test:

Type I error: You reject the null hypothesis when it is actually true. The probability of committing a Type I error is equal to the significance level, often called  alpha , and denoted as α.

Type II error: You fail to reject the null hypothesis when it is actually false. The probability of committing a Type II error is called the Power of the test or  Beta , denoted as β.

One-Tailed and Two-Tailed Tests

A statistical hypothesis can be one-tailed or two-tailed.

A one-tailed hypothesis involves making a “greater than” or “less than ” statement.

For example, suppose we assume the mean height of a male in the U.S. is greater than or equal to 70 inches. The null hypothesis would be H0: µ ≥ 70 inches and the alternative hypothesis would be Ha: µ < 70 inches.

A two-tailed hypothesis involves making an “equal to” or “not equal to” statement.

For example, suppose we assume the mean height of a male in the U.S. is equal to 70 inches. The null hypothesis would be H0: µ = 70 inches and the alternative hypothesis would be Ha: µ ≠ 70 inches.

Note: The “equal” sign is always included in the null hypothesis, whether it is =, ≥, or ≤.

Related:   What is a Directional Hypothesis?

Types of Hypothesis Tests

There are many different types of hypothesis tests you can perform depending on the type of data you’re working with and the goal of your analysis.

The following tutorials provide an explanation of the most common types of hypothesis tests:

Introduction to the One Sample t-test Introduction to the Two Sample t-test Introduction to the Paired Samples t-test Introduction to the One Proportion Z-Test Introduction to the Two Proportion Z-Test

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Hey there. My name is Zach Bobbitt. I have a Masters of Science degree in Applied Statistics and I’ve worked on machine learning algorithms for professional businesses in both healthcare and retail. I’m passionate about statistics, machine learning, and data visualization and I created Statology to be a resource for both students and teachers alike.  My goal with this site is to help you learn statistics through using simple terms, plenty of real-world examples, and helpful illustrations.

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Hypothesis Testing Framework

Now that we've seen an example and explored some of the themes for hypothesis testing, let's specify the procedure that we will follow.

Hypothesis Testing Steps

The formal framework and steps for hypothesis testing are as follows:

• Identify and define the parameter of interest
• Define the competing hypotheses to test
• Set the evidence threshold, formally called the significance level
• Generate or use theory to specify the sampling distribution and check conditions
• Calculate the test statistic and p-value
• Evaluate your results and write a conclusion in the context of the problem.

We'll discuss each of these steps below.

Identify Parameter of Interest

First, I like to specify and define the parameter of interest. What is the population that we are interested in? What characteristic are we measuring?

By defining our population of interest, we can confirm that we are truly using sample data. If we find that we actually have population data, our inference procedures are not needed. We could proceed by summarizing our population data.

By identifying and defining the parameter of interest, we can confirm that we use appropriate methods to summarize our variable of interest. We can also focus on the specific process needed for our parameter of interest.

In our example from the last page, the parameter of interest would be the population mean time that a host has been on Airbnb for the population of all Chicago listings on Airbnb in March 2023. We could represent this parameter with the symbol $\mu$. It is best practice to fully define $\mu$ both with words and symbol.

Define the Hypotheses

For hypothesis testing, we need to decide between two competing theories. These theories must be statements about the parameter. Although we won't have the population data to definitively select the correct theory, we will use our sample data to determine how reasonable our "skeptic's theory" is.

The first hypothesis is called the null hypothesis, $H_0$. This can be thought of as the "status quo", the "skeptic's theory", or that nothing is happening.

Examples of null hypotheses include that the population proportion is equal to 0.5 ($p = 0.5$), the population median is equal to 12 ($M = 12$), or the population mean is equal to 14.5 ($\mu = 14.5$).

The second hypothesis is called the alternative hypothesis, $H_a$ or $H_1$. This can be thought of as the "researcher's hypothesis" or that something is happening. This is what we'd like to convince the skeptic to believe. In most cases, the desired outcome of the researcher is to conclude that the alternative hypothesis is reasonable to use moving forward.

Examples of alternative hypotheses include that the population proportion is greater than 0.5 ($p > 0.5$), the population median is less than 12 ($M < 12$), or the population mean is not equal to 14.5 ($\mu \neq 14.5$).

There are a few requirements for the hypotheses:

• the hypotheses must be about the same population parameter,
• the hypotheses must have the same null value (provided number to compare to),
• the null hypothesis must have the equality (the equals sign must be in the null hypothesis),
• the alternative hypothesis must not have the equality (the equals sign cannot be in the alternative hypothesis),
• there must be no overlap between the null and alternative hypothesis.

You may have previously seen null hypotheses that include more than an equality (e.g. $p \le 0.5$). As long as there is an equality in the null hypothesis, this is allowed. For our purposes, we will simplify this statement to ($p = 0.5$).

To summarize from above, possible hypotheses statements are:

$H_0: p = 0.5$ vs. $H_a: p > 0.5$

$H_0: M = 12$ vs. $H_a: M < 12$

$H_0: \mu = 14.5$ vs. $H_a: \mu \neq 14.5$

In our second example about Airbnb hosts, our hypotheses would be:

$H_0: \mu = 2100$ vs. $H_a: \mu > 2100$.

Set Threshold (Significance Level)

There is one more step to complete before looking at the data. This is to set the threshold needed to convince the skeptic. This threshold is defined as an $\alpha$ significance level. We'll define exactly what the $\alpha$ significance level means later. For now, smaller $\alpha$s correspond to more evidence being required to convince the skeptic.

A few common $\alpha$ levels include 0.1, 0.05, and 0.01.

For our Airbnb hosts example, we'll set the threshold as 0.02.

Determine the Sampling Distribution of the Sample Statistic

The first step (as outlined above) is the identify the parameter of interest. What is the best estimate of the parameter of interest? Typically, it will be the sample statistic that corresponds to the parameter. This sample statistic, along with other features of the distribution will prove especially helpful as we continue the hypothesis testing procedure.

However, we do have a decision at this step. We can choose to use simulations with a resampling approach or we can choose to rely on theory if we are using proportions or means. We then also need to confirm that our results and conclusions will be valid based on the available data.

Required Condition

The one required assumption, regardless of approach (resampling or theory), is that the sample is random and representative of the population of interest. In other words, we need our sample to be a reasonable sample of data from the population.

Using Simulations and Resampling

If we'd like to use a resampling approach, we have no (or minimal) additional assumptions to check. This is because we are relying on the available data instead of assumptions.

We do need to adjust our data to be consistent with the null hypothesis (or skeptic's claim). We can then rely on our resampling approach to estimate a plausible sampling distribution for our sample statistic.

Recall that we took this approach on the last page. Before simulating our estimated sampling distribution, we adjusted the mean of the data so that it matched with our skeptic's claim, shown in the code below.

We'll see a few more examples on the next page.

Using Theory

On the other hand, we could rely on theory in order to estimate the sampling distribution of our desired statistic. Recall that we had a few different options to rely on:

• the CLT for the sampling distribution of a sample mean
• the binomial distribution for the sampling distribution of a proportion (or count)
• the Normal approximation of a binomial distribution (using the CLT) for the sampling distribution of a proportion

If relying on the CLT to specify the underlying sampling distribution, you also need to confirm:

• having a random sample and
• having a sample size that is less than 10% of the population size if the sampling is done without replacement
• having a Normally distributed population for a quantitative variable OR
• having a large enough sample size (usually at least 25) for a quantitative variable
• having a large enough sample size for a categorical variable (defined by $np$ and $n(1-p)$ being at least 10)

If relying on the binomial distribution to specify the underlying sampling distribution, you need to confirm:

• having a set number of trials, $n$
• having the same probability of success, $p$ for each observation

After determining the appropriate theory to use, we should check our conditions and then specify the sampling distribution for our statistic.

For the Airbnb hosts example, we have what we've assumed to be a random sample. It is not taken with replacement, so we also need to assume that our sample size (700) is less than 10% of our population size. In other words, we need to assume that the population of Chicago Airbnbs in March 2023 was at least 7000. Since we do have our (presumed) population data available, we can confirm that there were at least 7000 Chicago Airbnbs in the population in 2023.

Additionally, we can confirm that normality of the sampling distribution applies for the CLT to apply. Our sample size is more than 25 and the parameter of interest is a mean, so this meets our necessary criteria for the normality condition to be valid.

With the conditions now met, we can estimate our sampling distribution. From the CLT, we know that the distribution for the sample mean should be $\bar{X} \sim N(\mu, \frac{\sigma}{\sqrt{n}})$.

Now, we face our next challenge -- what to plug in as the mean and standard error for this distribution. Since we are adopting the skeptic's point of view for the purpose of this approach, we can plug in the value of $\mu_0 = 2100$. We also know that the sample size $n$ is 700. But what should we plug in for the population standard deviation $\sigma$?

When we don't know the value of a parameter, we will generally plug in our best estimate for the parameter. In this case, that corresponds to plugging in $\hat{\sigma}$, or our sample standard deviation.

Now, our estimated sampling distribution based on the CLT is: $\bar{X} \sim N(2100, 41.4045)$.

If we compare to our corresponding skeptic's sampling distribution on the last page, we can confirm that the theoretical sampling distribution is similar to the simulated sampling distribution based on resampling.

Assumptions not met

What do we do if the necessary conditions aren't met for the sampling distribution? Because the simulation-based resampling approach has minimal assumptions, we should be able to use this approach to produce valid results as long as the provided data is representative of the population.

The theory-based approach has more conditions, and we may not be able to meet all of the necessary conditions. For example, if our parameter is something other than a mean or proportion, we may not have appropriate theory. Additionally, we may not have a large enough sample size.

• First, we could consider changing approaches to the simulation-based one.
• Second, we might look at how we could meet the necessary conditions better. In some cases, we may be able to redefine groups or make adjustments so that the setup of the test is closer to what is needed.
• As a last resort, we may be able to continue following the hypothesis testing steps. In this case, your calculations may not be valid or exact; however, you might be able to use them as an estimate or an approximation. It would be crucial to specify the violation and approximation in any conclusions or discussion of the test.

Calculate the evidence with statistics and p-values

Now, it's time to calculate how much evidence the sample contains to convince the skeptic to change their mind. As we saw above, we can convince the skeptic to change their mind by demonstrating that our sample is unlikely to occur if their theory is correct.

How do we do this? We do this by calculating a probability associated with our observed value for the statistic.

For example, for our situation, we want to convince the skeptic that the population mean is actually greater than 2100 days. We do that by calculating the probability that a sample mean would be as large or larger than what we observed in our actual sample, which was 2188 days. Why do we need the larger portion? We use the larger portion because a sample mean of 2200 days also provides evidence that the population mean is larger than 2100 days; it isn't limited to exactly what we observed in our sample. We call this specific probability the p-value.

That is, the p-value is the probability of observing a test statistic as extreme or more extreme (as determined by the alternative hypothesis), assuming the null hypothesis is true.

Our observed p-value for the Airbnb host example demonstrates that the probability of getting a sample mean host time of 2188 days (the value from our sample) or more is 1.46%, assuming that the true population mean is 2100 days.

Test statistic

Notice that the formal definition of a p-value mentions a test statistic . In most cases, this word can be replaced with "statistic" or "sample" for an equivalent statement.

Oftentimes, we'll see that our sample statistic can be used directly as the test statistic, as it was above. We could equivalently adjust our statistic to calculate a test statistic. This test statistic is often calculated as:

$\text{test statistic} = \frac{\text{estimate} - \text{hypothesized value}}{\text{standard error of estimate}}$

P-value Calculation Options

Note also that the p-value definition includes a probability associated with a test statistic being as extreme or more extreme (as determined by the alternative hypothesis . How do we determine the area that we consider when calculating the probability. This decision is determined by the inequality in the alternative hypothesis.

For example, when we were trying to convince the skeptic that the population mean is greater than 2100 days, we only considered those sample means that we at least as large as what we observed -- 2188 days or more.

If instead we were trying to convince the skeptic that the population mean is less than 2100 days ($H_a: \mu < 2100$), we would consider all sample means that were at most what we observed - 2188 days or less. In this case, our p-value would be quite large; it would be around 99.5%. This large p-value demonstrates that our sample does not support the alternative hypothesis. In fact, our sample would encourage us to choose the null hypothesis instead of the alternative hypothesis of $\mu < 2100$, as our sample directly contradicts the statement in the alternative hypothesis.

If we wanted to convince the skeptic that they were wrong and that the population mean is anything other than 2100 days ($H_a: \mu \neq 2100$), then we would want to calculate the probability that a sample mean is at least 88 days away from 2100 days. That is, we would calculate the probability corresponding to 2188 days or more or 2012 days or less. In this case, our p-value would be roughly twice the previously calculated p-value.

We could calculate all of those probabilities using our sampling distributions, either simulated or theoretical, that we generated in the previous step. If we chose to calculate a test statistic as defined in the previous section, we could also rely on standard normal distributions to calculate our p-value.

Evaluate your results and write conclusion in context of problem

Once you've gathered your evidence, it's now time to make your final conclusions and determine how you might proceed.

In traditional hypothesis testing, you often make a decision. Recall that you have your threshold (significance level $\alpha$) and your level of evidence (p-value). We can compare the two to determine if your p-value is less than or equal to your threshold. If it is, you have enough evidence to persuade your skeptic to change their mind. If it is larger than the threshold, you don't have quite enough evidence to convince the skeptic.

Common formal conclusions (if given in context) would be:

• I have enough evidence to reject the null hypothesis (the skeptic's claim), and I have sufficient evidence to suggest that the alternative hypothesis is instead true.
• I do not have enough evidence to reject the null hypothesis (the skeptic's claim), and so I do not have sufficient evidence to suggest the alternative hypothesis is true.

The only decision that we can make is to either reject or fail to reject the null hypothesis (we cannot "accept" the null hypothesis). Because we aren't actively evaluating the alternative hypothesis, we don't want to make definitive decisions based on that hypothesis. However, when it comes to making our conclusion for what to use going forward, we frame this on whether we could successfully convince someone of the alternative hypothesis.

A less formal conclusion might look something like:

Based on our sample of Chicago Airbnb listings, it seems as if the mean time since a host has been on Airbnb (for all Chicago Airbnb listings) is more than 5.75 years.

Significance Level Interpretation

We've now seen how the significance level $\alpha$ is used as a threshold for hypothesis testing. What exactly is the significance level?

The significance level $\alpha$ has two primary definitions. One is that the significance level is the maximum probability required to reject the null hypothesis; this is based on how the significance level functions within the hypothesis testing framework. The second definition is that this is the probability of rejecting the null hypothesis when the null hypothesis is true; in other words, this is the probability of making a specific type of error called a Type I error.

Why do we have to be comfortable making a Type I error? There is always a chance that the skeptic was originally correct and we obtained a very unusual sample. We don't want to the skeptic to be so convinced of their theory that no evidence can convince them. In this case, we need the skeptic to be convinced as long as the evidence is strong enough . Typically, the probability threshold will be low, to reduce the number of errors made. This also means that a decent amount of evidence will be needed to convince the skeptic to abandon their position in favor of the alternative theory.

p-value Limitations and Misconceptions

In comparison to the $\alpha$ significance level, we also need to calculate the evidence against the null hypothesis with the p-value.

The p-value is the probability of getting a test statistic as extreme or more extreme (in the direction of the alternative hypothesis), assuming the null hypothesis is true.

Recently, p-values have gotten some bad press in terms of how they are used. However, that doesn't mean that p-values should be abandoned, as they still provide some helpful information. Below, we'll describe what p-values don't mean, and how they should or shouldn't be used to make decisions.

Factors that affect a p-value

What features affect the size of a p-value?

• the null value, or the value assumed under the null hypothesis
• the effect size (the difference between the null value under the null hypothesis and the true value of the parameter)
• the sample size

More evidence against the null hypothesis will be obtained if the effect size is larger and if the sample size is larger.

Misconceptions

We gave a definition for p-values above. What are some examples that p-values don't mean?

• A p-value is not the probability that the null hypothesis is correct
• A p-value is not the probability that the null hypothesis is incorrect
• A p-value is not the probability of getting your specific sample
• A p-value is not the probability that the alternative hypothesis is correct
• A p-value is not the probability that the alternative hypothesis is incorrect
• A p-value does not indicate the size of the effect

Our p-value is a way of measuring the evidence that your sample provides against the null hypothesis, assuming the null hypothesis is in fact correct.

Using the p-value to make a decision

Why is there bad press for a p-value? You may have heard about the standard $\alpha$ level of 0.05. That is, we would be comfortable with rejecting the null hypothesis once in 20 attempts when the null hypothesis is really true. Recall that we reject the null hypothesis when the p-value is less than or equal to the significance level.

Consider what would happen if you have two different p-values: 0.049 and 0.051.

In essence, these two p-values represent two very similar probabilities (4.9% vs. 5.1%) and very similar levels of evidence against the null hypothesis. However, when we make our decision based on our threshold, we would make two different decisions (reject and fail to reject, respectively). Should this decision really be so simplistic? I would argue that the difference shouldn't be so severe when the sample statistics are likely very similar. For this reason, I (and many other experts) strongly recommend using the p-value as a measure of evidence and including it with your conclusion.

Putting too much emphasis on the decision (and having a significant result) has created a culture of misusing p-values. For this reason, understanding your p-value itself is crucial.

Searching for p-values

The other concern with setting a definitive threshold of 0.05 is that some researchers will begin performing multiple tests until finding a p-value that is small enough. However, with a p-value of 0.05, we know that we will have a p-value less than 0.05 1 time out of every 20 times, even when the null hypothesis is true.

This means that if researchers start hunting for p-values that are small (sometimes called p-hacking), then they are likely to identify a small p-value every once in a while by chance alone. Researchers might then publish that result, even though the result is actually not informative. For this reason, it is recommended that researchers write a definitive analysis plan to prevent performing multiple tests in search of a result that occurs by chance alone.

Best Practices

With all of this in mind, what should we do when we have our p-value? How can we prevent or reduce misuse of a p-value?

• Report the p-value along with the conclusion
• Specify the effect size (the value of the statistic)
• Define an analysis plan before looking at the data
• Interpret the p-value clearly to specify what it indicates
• Consider using an alternate statistical approach, the confidence interval, discussed next, when appropriate

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Hypothesis Testing w/ 21 Step-by-Step Examples!

// Last Updated: October 9, 2020 - Watch Video //

In statistical testing, also referred to as hypothesis testing, our goal is to show the credibility of a claim regarding the population.

Jenn, Founder Calcworkshop ® , 15+ Years Experience (Licensed & Certified Teacher)

What Is Hypothesis Testing

Now it would be unreasonable to assume that we can test the entire population to determine the feasibility of every claim one might have.

Thus, we need a way to conclude an assumption is true or false by taking an appropriate sample and calculating a relevant statistic.

And knowing that we must expect that there will be some variation between the sample statistic that is calculated and the true population parameter, leads us to the understanding of statistical inferences (hypotheses).

Hypothesis Testing Steps

First, we must identify the parameter of interest.

Remember that a parameter always points to the population so that it will be either a population mean, population proportion, population slope, or some other population parameter.

Types of Hypothesis Tests

Then we will write a declaration of our significance test, which will include a null hypothesis statement and an alternative hypothesis.

The null hypothesis is the expected value of the population parameter, similar to the status quo, whereas the alternative hypothesis is a statement of negation of the null hypothesis as discussed by Penn State .

Next, we will calculate the desired test statistic from our random sample. This test statistic is a numerical quantity that measures the difference between the observed value and the expected value, divided by the standard error, which is the sample standard deviation.

Then we will compare this test statistic with a specified level of significance (alpha), just like we did with confidence intervals.

If the probability of yielding the sample statistic is as extreme or more extreme is smaller than our significance level, then we declare the sample statistic to be significant and reject the null hypothesis in favor of the alternative. In other words, if the probability is inside our shaded critical region then it is considered more extreme; thus, rejecting the hypothesis. But if it is outside the critical region, we will fail to reject our claim in favor of the alternative.

Null and Alternative Hypothesis

Additionally, we will also learn how to determine whether our study calls for a one or two-tailed test.

Type 1 And Type 2 Errors

Now, with all inferences and tests of significance, there is always room for error. A Type I error occurs if we reject the null hypothesis, when in actuality, the null hypothesis is true. Similarly, if we fail to reject the null hypothesis when, in reality, the null hypothesis is false, this is considered a Type II error .

Type 1 Vs. Type 2 Error

Imagine you are in a court of law, where a defendant is presumed innocent until proven guilty. What possible errors could a jury make regarding the outcome of the trial?

First, let’s state the following:

• The Null Hypothesis: The defendant is innocent.
• The Alternative Hypothesis: the defendant is guilty.

Now, a Type I Error would happen if the jury rejects the null hypothesis as false when, in reality, the null hypothesis is true. In other words, the jury finds the defendant guilty of a crime they didn’t commit.

And a Type II Error is when a jury accepts the null hypothesis as true when, in reality, the null hypothesis is false. Meaning, the defendant is found innocent of a crime they did commit.

Let’s look at an example where we put all of these ideas together.

Worked Example

Imagine we have a textile manufacturer investigating a new yarn, which claims it has a thread elongation of 12 kilograms with a standard deviation of 0.5 kilograms.

Using a random sample of 4 specimens, the manufacturer wishes to test the claim that the mean thread elongation is less than 12 kilograms.

Write a hypothesis statement for this scenario and using a normal distribution, find the Type 1 error if the sample mean is less than 11.5 kilograms.

Type 1 Error — Example

As we can see, from the example above, the likelihood of a type I error, where the manufacturer rejects the null hypothesis when the null hypothesis is actually true, is approximately 0.023 or 2.3% likely.

Together, we will look at these two types of error and how they affect decision-making and begin to explore the notion of a probability value and how it helps us determine the validity or falsity of our claim.

Hypothesis Testing – Lesson & Examples (Video)

1 hr 17 min

• Introduction to Video: Statistical Hypotheses
• 00:00:38 – Overview of Hypothesis Testing and determining a correctly stated hypothesis testing problem (Examples #1-7)
• Exclusive Content for Members Only
• 00:14:34 – State the Null Hypothesis and the Alternative Hypothesis for each scenario (Examples #8-12)
• 00:25:46 – Hypothesis Testing Steps and Overview of Type I and Type II errors (Examples #13-14)
• 00:40:32 – Describe a Type 1 and Type 2 error (Examples #15-16)
• 00:46:32 – Overview of p-value and Tails of the Hypothesis Test
• 00:55:55 – Find the probability of a Type I and Type II error (Example #17)
• 01:06:08 – Identify null hypothesis, alternative hypothesis, and state whether the scenario is a one-tail or two-tailed test (Examples #18-21)
• Practice Problems with Step-by-Step Solutions
• Chapter Tests with Video Solutions

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Unit 12: Significance tests (hypothesis testing)

About this unit.

Significance tests give us a formal process for using sample data to evaluate the likelihood of some claim about a population value. Learn how to conduct significance tests and calculate p-values to see how likely a sample result is to occur by random chance. You'll also see how we use p-values to make conclusions about hypotheses.

The idea of significance tests

• Simple hypothesis testing (Opens a modal)
• Idea behind hypothesis testing (Opens a modal)
• Examples of null and alternative hypotheses (Opens a modal)
• P-values and significance tests (Opens a modal)
• Comparing P-values to different significance levels (Opens a modal)
• Estimating a P-value from a simulation (Opens a modal)
• Using P-values to make conclusions (Opens a modal)
• Simple hypothesis testing Get 3 of 4 questions to level up!
• Writing null and alternative hypotheses Get 3 of 4 questions to level up!
• Estimating P-values from simulations Get 3 of 4 questions to level up!

Error probabilities and power

• Introduction to Type I and Type II errors (Opens a modal)
• Type 1 errors (Opens a modal)
• Examples identifying Type I and Type II errors (Opens a modal)
• Introduction to power in significance tests (Opens a modal)
• Examples thinking about power in significance tests (Opens a modal)
• Consequences of errors and significance (Opens a modal)
• Type I vs Type II error Get 3 of 4 questions to level up!
• Error probabilities and power Get 3 of 4 questions to level up!

Tests about a population proportion

• Constructing hypotheses for a significance test about a proportion (Opens a modal)
• Conditions for a z test about a proportion (Opens a modal)
• Reference: Conditions for inference on a proportion (Opens a modal)
• Calculating a z statistic in a test about a proportion (Opens a modal)
• Calculating a P-value given a z statistic (Opens a modal)
• Making conclusions in a test about a proportion (Opens a modal)
• Writing hypotheses for a test about a proportion Get 3 of 4 questions to level up!
• Conditions for a z test about a proportion Get 3 of 4 questions to level up!
• Calculating the test statistic in a z test for a proportion Get 3 of 4 questions to level up!
• Calculating the P-value in a z test for a proportion Get 3 of 4 questions to level up!
• Making conclusions in a z test for a proportion Get 3 of 4 questions to level up!

Tests about a population mean

• Writing hypotheses for a significance test about a mean (Opens a modal)
• Conditions for a t test about a mean (Opens a modal)
• Reference: Conditions for inference on a mean (Opens a modal)
• When to use z or t statistics in significance tests (Opens a modal)
• Example calculating t statistic for a test about a mean (Opens a modal)
• Using TI calculator for P-value from t statistic (Opens a modal)
• Using a table to estimate P-value from t statistic (Opens a modal)
• Comparing P-value from t statistic to significance level (Opens a modal)
• Free response example: Significance test for a mean (Opens a modal)
• Writing hypotheses for a test about a mean Get 3 of 4 questions to level up!
• Conditions for a t test about a mean Get 3 of 4 questions to level up!
• Calculating the test statistic in a t test for a mean Get 3 of 4 questions to level up!
• Calculating the P-value in a t test for a mean Get 3 of 4 questions to level up!
• Making conclusions in a t test for a mean Get 3 of 4 questions to level up!

More significance testing videos

• Hypothesis testing and p-values (Opens a modal)
• One-tailed and two-tailed tests (Opens a modal)
• Z-statistics vs. T-statistics (Opens a modal)
• Small sample hypothesis test (Opens a modal)
• Large sample proportion hypothesis testing (Opens a modal)

Tutorial Playlist

Statistics tutorial, everything you need to know about the probability density function in statistics, the best guide to understand central limit theorem, an in-depth guide to measures of central tendency : mean, median and mode, the ultimate guide to understand conditional probability.

A Comprehensive Look at Percentile in Statistics

The Best Guide to Understand Bayes Theorem

Everything you need to know about the normal distribution, an in-depth explanation of cumulative distribution function, a complete guide to chi-square test, what is hypothesis testing in statistics types and examples, understanding the fundamentals of arithmetic and geometric progression, the definitive guide to understand spearman’s rank correlation, a comprehensive guide to understand mean squared error, all you need to know about the empirical rule in statistics, the complete guide to skewness and kurtosis, a holistic look at bernoulli distribution.

All You Need to Know About Bias in Statistics

A Complete Guide to Get a Grasp of Time Series Analysis

The Key Differences Between Z-Test Vs. T-Test

The Complete Guide to Understand Pearson's Correlation

A complete guide on the types of statistical studies, everything you need to know about poisson distribution, your best guide to understand correlation vs. regression, the most comprehensive guide for beginners on what is correlation, what is hypothesis testing in statistics types and examples.

Lesson 10 of 24 By Avijeet Biswal

Table of Contents

In today’s data-driven world , decisions are based on data all the time. Hypothesis plays a crucial role in that process, whether it may be making business decisions, in the health sector, academia, or in quality improvement. Without hypothesis & hypothesis tests, you risk drawing the wrong conclusions and making bad decisions. In this tutorial, you will look at Hypothesis Testing in Statistics.

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What Is Hypothesis Testing in Statistics?

Hypothesis Testing is a type of statistical analysis in which you put your assumptions about a population parameter to the test. It is used to estimate the relationship between 2 statistical variables.

Let's discuss few examples of statistical hypothesis from real-life - 

• A teacher assumes that 60% of his college's students come from lower-middle-class families.
• A doctor believes that 3D (Diet, Dose, and Discipline) is 90% effective for diabetic patients.

Now that you know about hypothesis testing, look at the two types of hypothesis testing in statistics.

Hypothesis Testing Formula

Z = ( x̅ – μ0 ) / (σ /√n)

• Here, x̅ is the sample mean,
• μ0 is the population mean,
• σ is the standard deviation,
• n is the sample size.

How Hypothesis Testing Works?

An analyst performs hypothesis testing on a statistical sample to present evidence of the plausibility of the null hypothesis. Measurements and analyses are conducted on a random sample of the population to test a theory. Analysts use a random population sample to test two hypotheses: the null and alternative hypotheses.

The null hypothesis is typically an equality hypothesis between population parameters; for example, a null hypothesis may claim that the population means return equals zero. The alternate hypothesis is essentially the inverse of the null hypothesis (e.g., the population means the return is not equal to zero). As a result, they are mutually exclusive, and only one can be correct. One of the two possibilities, however, will always be correct.

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Null Hypothesis and Alternate Hypothesis

The Null Hypothesis is the assumption that the event will not occur. A null hypothesis has no bearing on the study's outcome unless it is rejected.

H0 is the symbol for it, and it is pronounced H-naught.

The Alternate Hypothesis is the logical opposite of the null hypothesis. The acceptance of the alternative hypothesis follows the rejection of the null hypothesis. H1 is the symbol for it.

Let's understand this with an example.

A sanitizer manufacturer claims that its product kills 95 percent of germs on average. 

To put this company's claim to the test, create a null and alternate hypothesis.

H0 (Null Hypothesis): Average = 95%.

Alternative Hypothesis (H1): The average is less than 95%.

Another straightforward example to understand this concept is determining whether or not a coin is fair and balanced. The null hypothesis states that the probability of a show of heads is equal to the likelihood of a show of tails. In contrast, the alternate theory states that the probability of a show of heads and tails would be very different.

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Hypothesis Testing Calculation With Examples

Let's consider a hypothesis test for the average height of women in the United States. Suppose our null hypothesis is that the average height is 5'4". We gather a sample of 100 women and determine that their average height is 5'5". The standard deviation of population is 2.

To calculate the z-score, we would use the following formula:

z = ( x̅ – μ0 ) / (σ /√n)

z = (5'5" - 5'4") / (2" / √100)

z = 0.5 / (0.045)

We will reject the null hypothesis as the z-score of 11.11 is very large and conclude that there is evidence to suggest that the average height of women in the US is greater than 5'4".

Steps of Hypothesis Testing

Hypothesis testing is a statistical method to determine if there is enough evidence in a sample of data to infer that a certain condition is true for the entire population. Here’s a breakdown of the typical steps involved in hypothesis testing:

Formulate Hypotheses

• Null Hypothesis (H0): This hypothesis states that there is no effect or difference, and it is the hypothesis you attempt to reject with your test.
• Alternative Hypothesis (H1 or Ha): This hypothesis is what you might believe to be true or hope to prove true. It is usually considered the opposite of the null hypothesis.

Choose the Significance Level (α)

The significance level, often denoted by alpha (α), is the probability of rejecting the null hypothesis when it is true. Common choices for α are 0.05 (5%), 0.01 (1%), and 0.10 (10%).

Select the Appropriate Test

Choose a statistical test based on the type of data and the hypothesis. Common tests include t-tests, chi-square tests, ANOVA, and regression analysis . The selection depends on data type, distribution, sample size, and whether the hypothesis is one-tailed or two-tailed.

Collect Data

Gather the data that will be analyzed in the test. This data should be representative of the population to infer conclusions accurately.

Calculate the Test Statistic

Based on the collected data and the chosen test, calculate a test statistic that reflects how much the observed data deviates from the null hypothesis.

Determine the p-value

The p-value is the probability of observing test results at least as extreme as the results observed, assuming the null hypothesis is correct. It helps determine the strength of the evidence against the null hypothesis.

Make a Decision

Compare the p-value to the chosen significance level:

• If the p-value ≤ α: Reject the null hypothesis, suggesting sufficient evidence in the data supports the alternative hypothesis.
• If the p-value > α: Do not reject the null hypothesis, suggesting insufficient evidence to support the alternative hypothesis.

Report the Results

Present the findings from the hypothesis test, including the test statistic, p-value, and the conclusion about the hypotheses.

Perform Post-hoc Analysis (if necessary)

Depending on the results and the study design, further analysis may be needed to explore the data more deeply or to address multiple comparisons if several hypotheses were tested simultaneously.

Types of Hypothesis Testing

To determine whether a discovery or relationship is statistically significant, hypothesis testing uses a z-test. It usually checks to see if two means are the same (the null hypothesis). Only when the population standard deviation is known and the sample size is 30 data points or more, can a z-test be applied.

A statistical test called a t-test is employed to compare the means of two groups. To determine whether two groups differ or if a procedure or treatment affects the population of interest, it is frequently used in hypothesis testing.

Chi-Square 

You utilize a Chi-square test for hypothesis testing concerning whether your data is as predicted. To determine if the expected and observed results are well-fitted, the Chi-square test analyzes the differences between categorical variables from a random sample. The test's fundamental premise is that the observed values in your data should be compared to the predicted values that would be present if the null hypothesis were true.

Hypothesis Testing and Confidence Intervals

Both confidence intervals and hypothesis tests are inferential techniques that depend on approximating the sample distribution. Data from a sample is used to estimate a population parameter using confidence intervals. Data from a sample is used in hypothesis testing to examine a given hypothesis. We must have a postulated parameter to conduct hypothesis testing.

Bootstrap distributions and randomization distributions are created using comparable simulation techniques. The observed sample statistic is the focal point of a bootstrap distribution, whereas the null hypothesis value is the focal point of a randomization distribution.

A variety of feasible population parameter estimates are included in confidence ranges. In this lesson, we created just two-tailed confidence intervals. There is a direct connection between these two-tail confidence intervals and these two-tail hypothesis tests. The results of a two-tailed hypothesis test and two-tailed confidence intervals typically provide the same results. In other words, a hypothesis test at the 0.05 level will virtually always fail to reject the null hypothesis if the 95% confidence interval contains the predicted value. A hypothesis test at the 0.05 level will nearly certainly reject the null hypothesis if the 95% confidence interval does not include the hypothesized parameter.

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Simple and Composite Hypothesis Testing

Depending on the population distribution, you can classify the statistical hypothesis into two types.

Simple Hypothesis: A simple hypothesis specifies an exact value for the parameter.

Composite Hypothesis: A composite hypothesis specifies a range of values.

A company is claiming that their average sales for this quarter are 1000 units. This is an example of a simple hypothesis.

Suppose the company claims that the sales are in the range of 900 to 1000 units. Then this is a case of a composite hypothesis.

One-Tailed and Two-Tailed Hypothesis Testing

The One-Tailed test, also called a directional test, considers a critical region of data that would result in the null hypothesis being rejected if the test sample falls into it, inevitably meaning the acceptance of the alternate hypothesis.

In a one-tailed test, the critical distribution area is one-sided, meaning the test sample is either greater or lesser than a specific value.

In two tails, the test sample is checked to be greater or less than a range of values in a Two-Tailed test, implying that the critical distribution area is two-sided.

If the sample falls within this range, the alternate hypothesis will be accepted, and the null hypothesis will be rejected.

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Right Tailed Hypothesis Testing

If the larger than (>) sign appears in your hypothesis statement, you are using a right-tailed test, also known as an upper test. Or, to put it another way, the disparity is to the right. For instance, you can contrast the battery life before and after a change in production. Your hypothesis statements can be the following if you want to know if the battery life is longer than the original (let's say 90 hours):

• The null hypothesis is (H0 <= 90) or less change.
• A possibility is that battery life has risen (H1) > 90.

The crucial point in this situation is that the alternate hypothesis (H1), not the null hypothesis, decides whether you get a right-tailed test.

Left Tailed Hypothesis Testing

Alternative hypotheses that assert the true value of a parameter is lower than the null hypothesis are tested with a left-tailed test; they are indicated by the asterisk "<".

Suppose H0: mean = 50 and H1: mean not equal to 50

According to the H1, the mean can be greater than or less than 50. This is an example of a Two-tailed test.

In a similar manner, if H0: mean >=50, then H1: mean <50

Here the mean is less than 50. It is called a One-tailed test.

Type 1 and Type 2 Error

A hypothesis test can result in two types of errors.

Type 1 Error: A Type-I error occurs when sample results reject the null hypothesis despite being true.

Type 2 Error: A Type-II error occurs when the null hypothesis is not rejected when it is false, unlike a Type-I error.

Suppose a teacher evaluates the examination paper to decide whether a student passes or fails.

H0: Student has passed

H1: Student has failed

Type I error will be the teacher failing the student [rejects H0] although the student scored the passing marks [H0 was true]. 

Type II error will be the case where the teacher passes the student [do not reject H0] although the student did not score the passing marks [H1 is true].

Level of Significance

The alpha value is a criterion for determining whether a test statistic is statistically significant. In a statistical test, Alpha represents an acceptable probability of a Type I error. Because alpha is a probability, it can be anywhere between 0 and 1. In practice, the most commonly used alpha values are 0.01, 0.05, and 0.1, which represent a 1%, 5%, and 10% chance of a Type I error, respectively (i.e. rejecting the null hypothesis when it is in fact correct).

A p-value is a metric that expresses the likelihood that an observed difference could have occurred by chance. As the p-value decreases the statistical significance of the observed difference increases. If the p-value is too low, you reject the null hypothesis.

Here you have taken an example in which you are trying to test whether the new advertising campaign has increased the product's sales. The p-value is the likelihood that the null hypothesis, which states that there is no change in the sales due to the new advertising campaign, is true. If the p-value is .30, then there is a 30% chance that there is no increase or decrease in the product's sales.  If the p-value is 0.03, then there is a 3% probability that there is no increase or decrease in the sales value due to the new advertising campaign. As you can see, the lower the p-value, the chances of the alternate hypothesis being true increases, which means that the new advertising campaign causes an increase or decrease in sales.

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Why Is Hypothesis Testing Important in Research Methodology?

Hypothesis testing is crucial in research methodology for several reasons:

• Provides evidence-based conclusions: It allows researchers to make objective conclusions based on empirical data, providing evidence to support or refute their research hypotheses.
• Supports decision-making: It helps make informed decisions, such as accepting or rejecting a new treatment, implementing policy changes, or adopting new practices.
• Adds rigor and validity: It adds scientific rigor to research using statistical methods to analyze data, ensuring that conclusions are based on sound statistical evidence.
• Contributes to the advancement of knowledge: By testing hypotheses, researchers contribute to the growth of knowledge in their respective fields by confirming existing theories or discovering new patterns and relationships.

When Did Hypothesis Testing Begin?

Hypothesis testing as a formalized process began in the early 20th century, primarily through the work of statisticians such as Ronald A. Fisher, Jerzy Neyman, and Egon Pearson. The development of hypothesis testing is closely tied to the evolution of statistical methods during this period.

• Ronald A. Fisher (1920s): Fisher was one of the key figures in developing the foundation for modern statistical science. In the 1920s, he introduced the concept of the null hypothesis in his book "Statistical Methods for Research Workers" (1925). Fisher also developed significance testing to examine the likelihood of observing the collected data if the null hypothesis were true. He introduced p-values to determine the significance of the observed results.
• Neyman-Pearson Framework (1930s): Jerzy Neyman and Egon Pearson built on Fisher’s work and formalized the process of hypothesis testing even further. In the 1930s, they introduced the concepts of Type I and Type II errors and developed a decision-making framework widely used in hypothesis testing today. Their approach emphasized the balance between these errors and introduced the concepts of the power of a test and the alternative hypothesis.

The dialogue between Fisher's and Neyman-Pearson's approaches shaped the methods and philosophy of statistical hypothesis testing used today. Fisher emphasized the evidential interpretation of the p-value. At the same time, Neyman and Pearson advocated for a decision-theoretical approach in which hypotheses are either accepted or rejected based on pre-determined significance levels and power considerations.

The application and methodology of hypothesis testing have since become a cornerstone of statistical analysis across various scientific disciplines, marking a significant statistical development.

Limitations of Hypothesis Testing

Hypothesis testing has some limitations that researchers should be aware of:

• It cannot prove or establish the truth: Hypothesis testing provides evidence to support or reject a hypothesis, but it cannot confirm the absolute truth of the research question.
• Results are sample-specific: Hypothesis testing is based on analyzing a sample from a population, and the conclusions drawn are specific to that particular sample.
• Possible errors: During hypothesis testing, there is a chance of committing type I error (rejecting a true null hypothesis) or type II error (failing to reject a false null hypothesis).
• Assumptions and requirements: Different tests have specific assumptions and requirements that must be met to accurately interpret results.

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After reading this tutorial, you would have a much better understanding of hypothesis testing, one of the most important concepts in the field of Data Science . The majority of hypotheses are based on speculation about observed behavior, natural phenomena, or established theories.

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If you have any questions regarding this ‘Hypothesis Testing In Statistics’ tutorial, do share them in the comment section. Our subject matter expert will respond to your queries. Happy learning!

1. What is hypothesis testing in statistics with example?

Hypothesis testing is a statistical method used to determine if there is enough evidence in a sample data to draw conclusions about a population. It involves formulating two competing hypotheses, the null hypothesis (H0) and the alternative hypothesis (Ha), and then collecting data to assess the evidence. An example: testing if a new drug improves patient recovery (Ha) compared to the standard treatment (H0) based on collected patient data.

2. What is H0 and H1 in statistics?

In statistics, H0​ and H1​ represent the null and alternative hypotheses. The null hypothesis, H0​, is the default assumption that no effect or difference exists between groups or conditions. The alternative hypothesis, H1​, is the competing claim suggesting an effect or a difference. Statistical tests determine whether to reject the null hypothesis in favor of the alternative hypothesis based on the data.

3. What is a simple hypothesis with an example?

A simple hypothesis is a specific statement predicting a single relationship between two variables. It posits a direct and uncomplicated outcome. For example, a simple hypothesis might state, "Increased sunlight exposure increases the growth rate of sunflowers." Here, the hypothesis suggests a direct relationship between the amount of sunlight (independent variable) and the growth rate of sunflowers (dependent variable), with no additional variables considered.

4. What are the 2 types of hypothesis testing?

• One-tailed (or one-sided) test: Tests for the significance of an effect in only one direction, either positive or negative.
• Two-tailed (or two-sided) test: Tests for the significance of an effect in both directions, allowing for the possibility of a positive or negative effect.

The choice between one-tailed and two-tailed tests depends on the specific research question and the directionality of the expected effect.

5. What are the 3 major types of hypothesis?

The three major types of hypotheses are:

• Null Hypothesis (H0): Represents the default assumption, stating that there is no significant effect or relationship in the data.
• Alternative Hypothesis (Ha): Contradicts the null hypothesis and proposes a specific effect or relationship that researchers want to investigate.
• Nondirectional Hypothesis: An alternative hypothesis that doesn't specify the direction of the effect, leaving it open for both positive and negative possibilities.

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Avijeet is a Senior Research Analyst at Simplilearn. Passionate about Data Analytics, Machine Learning, and Deep Learning, Avijeet is also interested in politics, cricket, and football.

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What Is Hypothesis Testing?

• How It Works

4 Step Process

The bottom line.

• Fundamental Analysis

Hypothesis Testing: 4 Steps and Example

Hypothesis testing, sometimes called significance testing, is an act in statistics whereby an analyst tests an assumption regarding a population parameter. The methodology employed by the analyst depends on the nature of the data used and the reason for the analysis.

Hypothesis testing is used to assess the plausibility of a hypothesis by using sample data. Such data may come from a larger population or a data-generating process. The word "population" will be used for both of these cases in the following descriptions.

Key Takeaways

• Hypothesis testing is used to assess the plausibility of a hypothesis by using sample data.
• The test provides evidence concerning the plausibility of the hypothesis, given the data.
• Statistical analysts test a hypothesis by measuring and examining a random sample of the population being analyzed.
• The four steps of hypothesis testing include stating the hypotheses, formulating an analysis plan, analyzing the sample data, and analyzing the result.

How Hypothesis Testing Works

In hypothesis testing, an  analyst  tests a statistical sample, intending to provide evidence on the plausibility of the null hypothesis. Statistical analysts measure and examine a random sample of the population being analyzed. All analysts use a random population sample to test two different hypotheses: the null hypothesis and the alternative hypothesis.

The null hypothesis is usually a hypothesis of equality between population parameters; e.g., a null hypothesis may state that the population mean return is equal to zero. The alternative hypothesis is effectively the opposite of a null hypothesis. Thus, they are mutually exclusive , and only one can be true. However, one of the two hypotheses will always be true.

The null hypothesis is a statement about a population parameter, such as the population mean, that is assumed to be true.

• State the hypotheses.
• Formulate an analysis plan, which outlines how the data will be evaluated.
• Carry out the plan and analyze the sample data.
• Analyze the results and either reject the null hypothesis, or state that the null hypothesis is plausible, given the data.

Example of Hypothesis Testing

If an individual wants to test that a penny has exactly a 50% chance of landing on heads, the null hypothesis would be that 50% is correct, and the alternative hypothesis would be that 50% is not correct. Mathematically, the null hypothesis is represented as Ho: P = 0.5. The alternative hypothesis is shown as "Ha" and is identical to the null hypothesis, except with the equal sign struck-through, meaning that it does not equal 50%.

A random sample of 100 coin flips is taken, and the null hypothesis is tested. If it is found that the 100 coin flips were distributed as 40 heads and 60 tails, the analyst would assume that a penny does not have a 50% chance of landing on heads and would reject the null hypothesis and accept the alternative hypothesis.

If there were 48 heads and 52 tails, then it is plausible that the coin could be fair and still produce such a result. In cases such as this where the null hypothesis is "accepted," the analyst states that the difference between the expected results (50 heads and 50 tails) and the observed results (48 heads and 52 tails) is "explainable by chance alone."

When Did Hypothesis Testing Begin?

Some statisticians attribute the first hypothesis tests to satirical writer John Arbuthnot in 1710, who studied male and female births in England after observing that in nearly every year, male births exceeded female births by a slight proportion. Arbuthnot calculated that the probability of this happening by chance was small, and therefore it was due to “divine providence.”

What are the Benefits of Hypothesis Testing?

Hypothesis testing helps assess the accuracy of new ideas or theories by testing them against data. This allows researchers to determine whether the evidence supports their hypothesis, helping to avoid false claims and conclusions. Hypothesis testing also provides a framework for decision-making based on data rather than personal opinions or biases. By relying on statistical analysis, hypothesis testing helps to reduce the effects of chance and confounding variables, providing a robust framework for making informed conclusions.

What are the Limitations of Hypothesis Testing?

Hypothesis testing relies exclusively on data and doesn’t provide a comprehensive understanding of the subject being studied. Additionally, the accuracy of the results depends on the quality of the available data and the statistical methods used. Inaccurate data or inappropriate hypothesis formulation may lead to incorrect conclusions or failed tests. Hypothesis testing can also lead to errors, such as analysts either accepting or rejecting a null hypothesis when they shouldn’t have. These errors may result in false conclusions or missed opportunities to identify significant patterns or relationships in the data.

Hypothesis testing refers to a statistical process that helps researchers determine the reliability of a study. By using a well-formulated hypothesis and set of statistical tests, individuals or businesses can make inferences about the population that they are studying and draw conclusions based on the data presented. All hypothesis testing methods have the same four-step process, which includes stating the hypotheses, formulating an analysis plan, analyzing the sample data, and analyzing the result.

Sage. " Introduction to Hypothesis Testing ," Page 4.

Elder Research. " Who Invented the Null Hypothesis? "

Formplus. " Hypothesis Testing: Definition, Uses, Limitations and Examples ."

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S.3.3 hypothesis testing examples.

• Example: Right-Tailed Test
• Example: Left-Tailed Test
• Example: Two-Tailed Test

Brinell Hardness Scores

An engineer measured the Brinell hardness of 25 pieces of ductile iron that were subcritically annealed. The resulting data were:

The engineer hypothesized that the mean Brinell hardness of all such ductile iron pieces is greater than 170. Therefore, he was interested in testing the hypotheses:

H 0 : μ = 170 H A : μ > 170

The engineer entered his data into Minitab and requested that the "one-sample t -test" be conducted for the above hypotheses. He obtained the following output:

Descriptive Statistics

$\mu$: mean of Brinelli

Null hypothesis    H₀: $\mu$ = 170 Alternative hypothesis    H₁: $\mu$ > 170

The output tells us that the average Brinell hardness of the n = 25 pieces of ductile iron was 172.52 with a standard deviation of 10.31. (The standard error of the mean "SE Mean", calculated by dividing the standard deviation 10.31 by the square root of n = 25, is 2.06). The test statistic t * is 1.22, and the P -value is 0.117.

If the engineer set his significance level α at 0.05 and used the critical value approach to conduct his hypothesis test, he would reject the null hypothesis if his test statistic t * were greater than 1.7109 (determined using statistical software or a t -table):

Since the engineer's test statistic, t * = 1.22, is not greater than 1.7109, the engineer fails to reject the null hypothesis. That is, the test statistic does not fall in the "critical region." There is insufficient evidence, at the \(\alpha\) = 0.05 level, to conclude that the mean Brinell hardness of all such ductile iron pieces is greater than 170.

If the engineer used the P -value approach to conduct his hypothesis test, he would determine the area under a t n - 1 = t 24 curve and to the right of the test statistic t * = 1.22:

In the output above, Minitab reports that the P -value is 0.117. Since the P -value, 0.117, is greater than \(\alpha\) = 0.05, the engineer fails to reject the null hypothesis. There is insufficient evidence, at the \(\alpha\) = 0.05 level, to conclude that the mean Brinell hardness of all such ductile iron pieces is greater than 170.

Note that the engineer obtains the same scientific conclusion regardless of the approach used. This will always be the case.

Height of Sunflowers

A biologist was interested in determining whether sunflower seedlings treated with an extract from Vinca minor roots resulted in a lower average height of sunflower seedlings than the standard height of 15.7 cm. The biologist treated a random sample of n = 33 seedlings with the extract and subsequently obtained the following heights:

The biologist's hypotheses are:

H 0 : μ = 15.7 H A : μ < 15.7

The biologist entered her data into Minitab and requested that the "one-sample t -test" be conducted for the above hypotheses. She obtained the following output:

$\mu$: mean of Height

Null hypothesis    H₀: $\mu$ = 15.7 Alternative hypothesis    H₁: $\mu$ < 15.7

The output tells us that the average height of the n = 33 sunflower seedlings was 13.664 with a standard deviation of 2.544. (The standard error of the mean "SE Mean", calculated by dividing the standard deviation 13.664 by the square root of n = 33, is 0.443). The test statistic t * is -4.60, and the P -value, 0.000, is to three decimal places.

Minitab Note. Minitab will always report P -values to only 3 decimal places. If Minitab reports the P -value as 0.000, it really means that the P -value is 0.000....something. Throughout this course (and your future research!), when you see that Minitab reports the P -value as 0.000, you should report the P -value as being "< 0.001."

If the biologist set her significance level \(\alpha\) at 0.05 and used the critical value approach to conduct her hypothesis test, she would reject the null hypothesis if her test statistic t * were less than -1.6939 (determined using statistical software or a t -table):s-3-3

Since the biologist's test statistic, t * = -4.60, is less than -1.6939, the biologist rejects the null hypothesis. That is, the test statistic falls in the "critical region." There is sufficient evidence, at the α = 0.05 level, to conclude that the mean height of all such sunflower seedlings is less than 15.7 cm.

If the biologist used the P -value approach to conduct her hypothesis test, she would determine the area under a t n - 1 = t 32 curve and to the left of the test statistic t * = -4.60:

In the output above, Minitab reports that the P -value is 0.000, which we take to mean < 0.001. Since the P -value is less than 0.001, it is clearly less than \(\alpha\) = 0.05, and the biologist rejects the null hypothesis. There is sufficient evidence, at the \(\alpha\) = 0.05 level, to conclude that the mean height of all such sunflower seedlings is less than 15.7 cm.

Note again that the biologist obtains the same scientific conclusion regardless of the approach used. This will always be the case.

Gum Thickness

A manufacturer claims that the thickness of the spearmint gum it produces is 7.5 one-hundredths of an inch. A quality control specialist regularly checks this claim. On one production run, he took a random sample of n = 10 pieces of gum and measured their thickness. He obtained:

The quality control specialist's hypotheses are:

H 0 : μ = 7.5 H A : μ ≠ 7.5

The quality control specialist entered his data into Minitab and requested that the "one-sample t -test" be conducted for the above hypotheses. He obtained the following output:

$\mu$: mean of Thickness

Null hypothesis    H₀: $\mu$ = 7.5 Alternative hypothesis    H₁: $\mu \ne$ 7.5

The output tells us that the average thickness of the n = 10 pieces of gums was 7.55 one-hundredths of an inch with a standard deviation of 0.1027. (The standard error of the mean "SE Mean", calculated by dividing the standard deviation 0.1027 by the square root of n = 10, is 0.0325). The test statistic t * is 1.54, and the P -value is 0.158.

If the quality control specialist sets his significance level \(\alpha\) at 0.05 and used the critical value approach to conduct his hypothesis test, he would reject the null hypothesis if his test statistic t * were less than -2.2616 or greater than 2.2616 (determined using statistical software or a t -table):

Since the quality control specialist's test statistic, t * = 1.54, is not less than -2.2616 nor greater than 2.2616, the quality control specialist fails to reject the null hypothesis. That is, the test statistic does not fall in the "critical region." There is insufficient evidence, at the \(\alpha\) = 0.05 level, to conclude that the mean thickness of all of the manufacturer's spearmint gum differs from 7.5 one-hundredths of an inch.

If the quality control specialist used the P -value approach to conduct his hypothesis test, he would determine the area under a t n - 1 = t 9 curve, to the right of 1.54 and to the left of -1.54:

In the output above, Minitab reports that the P -value is 0.158. Since the P -value, 0.158, is greater than \(\alpha\) = 0.05, the quality control specialist fails to reject the null hypothesis. There is insufficient evidence, at the \(\alpha\) = 0.05 level, to conclude that the mean thickness of all pieces of spearmint gum differs from 7.5 one-hundredths of an inch.

Note that the quality control specialist obtains the same scientific conclusion regardless of the approach used. This will always be the case.

In our review of hypothesis tests, we have focused on just one particular hypothesis test, namely that concerning the population mean \(\mu\). The important thing to recognize is that the topics discussed here — the general idea of hypothesis tests, errors in hypothesis testing, the critical value approach, and the P -value approach — generally extend to all of the hypothesis tests you will encounter.

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Hypothesis testing involves formulating assumptions about population parameters based on sample statistics and rigorously evaluating these assumptions against empirical evidence. This article sheds light on the significance of hypothesis testing and the critical steps involved in the process.

What is Hypothesis Testing?

Hypothesis testing is a statistical method that is used to make a statistical decision using experimental data. Hypothesis testing is basically an assumption that we make about a population parameter. It evaluates two mutually exclusive statements about a population to determine which statement is best supported by the sample data. 

Example: You say an average height in the class is 30 or a boy is taller than a girl. All of these is an assumption that we are assuming, and we need some statistical way to prove these. We need some mathematical conclusion whatever we are assuming is true.

Defining Hypotheses

Key Terms of Hypothesis Testing

• P-value: The P value , or calculated probability, is the probability of finding the observed/extreme results when the null hypothesis(H0) of a study-given problem is true. If your P-value is less than the chosen significance level then you reject the null hypothesis i.e. accept that your sample claims to support the alternative hypothesis.
• Test Statistic: The test statistic is a numerical value calculated from sample data during a hypothesis test, used to determine whether to reject the null hypothesis. It is compared to a critical value or p-value to make decisions about the statistical significance of the observed results.
• Critical value : The critical value in statistics is a threshold or cutoff point used to determine whether to reject the null hypothesis in a hypothesis test.
• Degrees of freedom: Degrees of freedom are associated with the variability or freedom one has in estimating a parameter. The degrees of freedom are related to the sample size and determine the shape.

Why do we use Hypothesis Testing?

Hypothesis testing is an important procedure in statistics. Hypothesis testing evaluates two mutually exclusive population statements to determine which statement is most supported by sample data. When we say that the findings are statistically significant, thanks to hypothesis testing. 

One-Tailed and Two-Tailed Test

One tailed test focuses on one direction, either greater than or less than a specified value. We use a one-tailed test when there is a clear directional expectation based on prior knowledge or theory. The critical region is located on only one side of the distribution curve. If the sample falls into this critical region, the null hypothesis is rejected in favor of the alternative hypothesis.

One-Tailed Test

There are two types of one-tailed test:

Two-Tailed Test

A two-tailed test considers both directions, greater than and less than a specified value.We use a two-tailed test when there is no specific directional expectation, and want to detect any significant difference.

What are Type 1 and Type 2 errors in Hypothesis Testing?

In hypothesis testing, Type I and Type II errors are two possible errors that researchers can make when drawing conclusions about a population based on a sample of data. These errors are associated with the decisions made regarding the null hypothesis and the alternative hypothesis.

How does Hypothesis Testing work?

Step 1: define null and alternative hypothesis.

We first identify the problem about which we want to make an assumption keeping in mind that our assumption should be contradictory to one another, assuming Normally distributed data.

Step 2 – Choose significance level

Step 3 – Collect and Analyze data.

Gather relevant data through observation or experimentation. Analyze the data using appropriate statistical methods to obtain a test statistic.

Step 4-Calculate Test Statistic

The data for the tests are evaluated in this step we look for various scores based on the characteristics of data. The choice of the test statistic depends on the type of hypothesis test being conducted.

There are various hypothesis tests, each appropriate for various goal to calculate our test. This could be a Z-test , Chi-square , T-test , and so on.

• Z-test : If population means and standard deviations are known. Z-statistic is commonly used.
• t-test : If population standard deviations are unknown. and sample size is small than t-test statistic is more appropriate.
• Chi-square test : Chi-square test is used for categorical data or for testing independence in contingency tables
• F-test : F-test is often used in analysis of variance (ANOVA) to compare variances or test the equality of means across multiple groups.

We have a smaller dataset, So, T-test is more appropriate to test our hypothesis.

T-statistic is a measure of the difference between the means of two groups relative to the variability within each group. It is calculated as the difference between the sample means divided by the standard error of the difference. It is also known as the t-value or t-score.

Step 5 – Comparing Test Statistic:

In this stage, we decide where we should accept the null hypothesis or reject the null hypothesis. There are two ways to decide where we should accept or reject the null hypothesis.

Method A: Using Crtical values

Comparing the test statistic and tabulated critical value we have,

• If Test Statistic>Critical Value: Reject the null hypothesis.
• If Test Statistic≤Critical Value: Fail to reject the null hypothesis.

Note: Critical values are predetermined threshold values that are used to make a decision in hypothesis testing. To determine critical values for hypothesis testing, we typically refer to a statistical distribution table , such as the normal distribution or t-distribution tables based on.

Method B: Using P-values

We can also come to an conclusion using the p-value,

Note : The p-value is the probability of obtaining a test statistic as extreme as, or more extreme than, the one observed in the sample, assuming the null hypothesis is true. To determine p-value for hypothesis testing, we typically refer to a statistical distribution table , such as the normal distribution or t-distribution tables based on.

Step 7- Interpret the Results

At last, we can conclude our experiment using method A or B.

Calculating test statistic

To validate our hypothesis about a population parameter we use statistical functions . We use the z-score, p-value, and level of significance(alpha) to make evidence for our hypothesis for normally distributed data .

1. Z-statistics:

When population means and standard deviations are known.

• μ represents the population mean, 
• σ is the standard deviation
• and n is the size of the sample.

2. T-Statistics

T test is used when n<30,

t-statistic calculation is given by:

• t = t-score,
• x̄ = sample mean
• μ = population mean,
• s = standard deviation of the sample,
• n = sample size

3. Chi-Square Test

Chi-Square Test for Independence categorical Data (Non-normally distributed) using:

• i,j are the rows and columns index respectively.

Real life Hypothesis Testing example

Let’s examine hypothesis testing using two real life situations,

Case A: D oes a New Drug Affect Blood Pressure?

Imagine a pharmaceutical company has developed a new drug that they believe can effectively lower blood pressure in patients with hypertension. Before bringing the drug to market, they need to conduct a study to assess its impact on blood pressure.

• Before Treatment: 120, 122, 118, 130, 125, 128, 115, 121, 123, 119
• After Treatment: 115, 120, 112, 128, 122, 125, 110, 117, 119, 114

Step 1 : Define the Hypothesis

• Null Hypothesis : (H 0 )The new drug has no effect on blood pressure.
• Alternate Hypothesis : (H 1 )The new drug has an effect on blood pressure.

Step 2: Define the Significance level

Let’s consider the Significance level at 0.05, indicating rejection of the null hypothesis.

If the evidence suggests less than a 5% chance of observing the results due to random variation.

Step 3 : Compute the test statistic

Using paired T-test analyze the data to obtain a test statistic and a p-value.

The test statistic (e.g., T-statistic) is calculated based on the differences between blood pressure measurements before and after treatment.

t = m/(s/√n)

• m  = mean of the difference i.e X after, X before
• s  = standard deviation of the difference (d) i.e d i ​= X after, i ​− X before,
• n  = sample size,

then, m= -3.9, s= 1.8 and n= 10

we, calculate the , T-statistic = -9 based on the formula for paired t test

Step 4: Find the p-value

The calculated t-statistic is -9 and degrees of freedom df = 9, you can find the p-value using statistical software or a t-distribution table.

thus, p-value = 8.538051223166285e-06

Step 5: Result

• If the p-value is less than or equal to 0.05, the researchers reject the null hypothesis.
• If the p-value is greater than 0.05, they fail to reject the null hypothesis.

Conclusion: Since the p-value (8.538051223166285e-06) is less than the significance level (0.05), the researchers reject the null hypothesis. There is statistically significant evidence that the average blood pressure before and after treatment with the new drug is different.

Python Implementation of Hypothesis Testing

Let’s create hypothesis testing with python, where we are testing whether a new drug affects blood pressure. For this example, we will use a paired T-test. We’ll use the scipy.stats library for the T-test.

Scipy is a mathematical library in Python that is mostly used for mathematical equations and computations.

We will implement our first real life problem via python,

In the above example, given the T-statistic of approximately -9 and an extremely small p-value, the results indicate a strong case to reject the null hypothesis at a significance level of 0.05. 

• The results suggest that the new drug, treatment, or intervention has a significant effect on lowering blood pressure.
• The negative T-statistic indicates that the mean blood pressure after treatment is significantly lower than the assumed population mean before treatment.

Case B : Cholesterol level in a population

Data: A sample of 25 individuals is taken, and their cholesterol levels are measured.

Cholesterol Levels (mg/dL): 205, 198, 210, 190, 215, 205, 200, 192, 198, 205, 198, 202, 208, 200, 205, 198, 205, 210, 192, 205, 198, 205, 210, 192, 205.

Populations Mean = 200

Population Standard Deviation (σ): 5 mg/dL(given for this problem)

Step 1: Define the Hypothesis

• Null Hypothesis (H 0 ): The average cholesterol level in a population is 200 mg/dL.
• Alternate Hypothesis (H 1 ): The average cholesterol level in a population is different from 200 mg/dL.

As the direction of deviation is not given , we assume a two-tailed test, and based on a normal distribution table, the critical values for a significance level of 0.05 (two-tailed) can be calculated through the z-table and are approximately -1.96 and 1.96.

Step 4: Result

Since the absolute value of the test statistic (2.04) is greater than the critical value (1.96), we reject the null hypothesis. And conclude that, there is statistically significant evidence that the average cholesterol level in the population is different from 200 mg/dL

Limitations of Hypothesis Testing

• Although a useful technique, hypothesis testing does not offer a comprehensive grasp of the topic being studied. Without fully reflecting the intricacy or whole context of the phenomena, it concentrates on certain hypotheses and statistical significance.
• The accuracy of hypothesis testing results is contingent on the quality of available data and the appropriateness of statistical methods used. Inaccurate data or poorly formulated hypotheses can lead to incorrect conclusions.
• Relying solely on hypothesis testing may cause analysts to overlook significant patterns or relationships in the data that are not captured by the specific hypotheses being tested. This limitation underscores the importance of complimenting hypothesis testing with other analytical approaches.

Hypothesis testing stands as a cornerstone in statistical analysis, enabling data scientists to navigate uncertainties and draw credible inferences from sample data. By systematically defining null and alternative hypotheses, choosing significance levels, and leveraging statistical tests, researchers can assess the validity of their assumptions. The article also elucidates the critical distinction between Type I and Type II errors, providing a comprehensive understanding of the nuanced decision-making process inherent in hypothesis testing. The real-life example of testing a new drug’s effect on blood pressure using a paired T-test showcases the practical application of these principles, underscoring the importance of statistical rigor in data-driven decision-making.

Frequently Asked Questions (FAQs)

1. what are the 3 types of hypothesis test.

There are three types of hypothesis tests: right-tailed, left-tailed, and two-tailed. Right-tailed tests assess if a parameter is greater, left-tailed if lesser. Two-tailed tests check for non-directional differences, greater or lesser.

2.What are the 4 components of hypothesis testing?

Null Hypothesis ( ): No effect or difference exists. Alternative Hypothesis ( ): An effect or difference exists. Significance Level ( ): Risk of rejecting null hypothesis when it’s true (Type I error). Test Statistic: Numerical value representing observed evidence against null hypothesis.

3.What is hypothesis testing in ML?

Statistical method to evaluate the performance and validity of machine learning models. Tests specific hypotheses about model behavior, like whether features influence predictions or if a model generalizes well to unseen data.

4.What is the difference between Pytest and hypothesis in Python?

Pytest purposes general testing framework for Python code while Hypothesis is a Property-based testing framework for Python, focusing on generating test cases based on specified properties of the code.

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Our first practice will include the whole process to calculate all of the equations and the ANOVA Summary Table.

In this scenario, researchers are interested in explaining differences in how happy people are based on how healthy people are. They gather quantitative data on each of these variables from 18 people and fit a linear regression model (another way to say that they constructed a regression line equation) to explain the variability of one variable (say, happiness) based on the variability of the other variable (health). We will follow the four-step hypothesis testing procedure to see if there is a relation between these variables that is statistically significant.

S tep 1: State the Hypotheses

What do you think? Do you think that happiness and health vary in the same direction, in opposite directions, or do not vary together? This sounds like the set up for a research hypothesis for a correlation, and it is! The small change here is that we're focusing on the slope (\(b\) or beta) of the line, rather merely testing if there is a linear relationship.

Example \(\PageIndex{1}\)

What could be a research hypothesis for this scenario? State the research hypothesis in words and symbols.

The research hypothesis should probably be something like, "There will be a positive slope in the regression line for happiness and health."

Symbols: \( \beta > 0 \)

For right now, we haven't made it clear which might be our predictor variable and which might be our criterion variable, the outcome. If we decide that health is the predictor and happiness is the outcome, we could add that we think that changes in health predict changes in happiness. It seems reasonable in this situation to reverse the IV and DV here, and say that change in happiness could also predict changes in health. There's data to support both of these ideas!

The null hypothesis in regression states that there is no relation between our variables so you can't use one variable to predict or explain the other variable.

Example \(\PageIndex{2}\)

What is the null hypothesis for this scenario? State the null hypothesis in words and symbols.

The null hypothesis is that there is no relationship between health and happiness, so "The slope in the regression line for happiness and health will be zero." Neither variable can predict or explain the other variable.

Symbols: \( \beta = 0 \)

These hypothesis are not as clear-cut as we've previously had because regression analyses can show a lot. If it's easier, you can fall back on the general hypothesis for correlations rather than focus on slopes. However, that misses the addition information that regressions also show: How much variability in one variable is due to the other variable.

Step 2: Find the Critical Value

Because regression and ANOVA are the same analysis, our critical value for regression will come from the same place: the Table of Critical Values of F (found in the first chapter discussing ANOVAs ( BG ANOVAs ), or found through the Common Critical Values page at the end of the book).

The ANOVA Summary Table used for regression uses two types of degrees of freedom. We previously saw that the Degrees of Freedom for our numerator, the Model line, is always 1 in a linear regression, and that the denominator degrees of freedom, from the Error line, is \(N – 2\).

In this instance, we have 18 people so our degrees of freedom for the denominator is 16. Going to our \(F\) table, we find that the appropriate critical value for 1 and 16 degrees of freedom is F Critical = 4.49. Isn't it nice to do the simple things that we learned about seemingly eons ago?

Step 3: Calculate the Test Statistic

The process of calculating the test statistic for regression first involves computing the parameter estimates for the line of best fit. To do this, we first calculate the means, standard deviations, and sum of products for our variables, as shown in Table \(\PageIndex{1}\).

This table should look pretty familiar, as it's the same as the one we used to calculate a correlation when we didn't have have the standard deviation provided.

First things first, let's find the means so that we can start filling in this table.

Exercise \(\PageIndex{1}\)

What is the average score for the Health variable? What is the average score for the Happiness variable?

\[ \bar{X}_{Hth} = \dfrac{\sum X}{N} = \dfrac{356.02}{18} = 19.78 \nonumber \]

\[ \bar{X}_{Hpp} = \dfrac{\sum X}{N} = \dfrac{314.19}{18} = 17.46 \nonumber \]

Now that we have the means, we can fill in the complete Sum of Products table.

Exercise \(\PageIndex{2}\)

Fill in Table \(\PageIndex{1}\) by finding the differences of each score from that variable's mean, squaring the differences, multiplying them, then finding the sums of each of these.

In Table \(\PageIndex{2}\), the difference scores for each variable (each score minus the mean for that variable) sum to nearly zero, so all is well there. Let's use the sum of those squares to calculate the standard deviation for each variable.

Example \(\PageIndex{3}\)

Calculate the standard deviation of the Health variable.

Using the standard deviation formula: \[s=\sqrt{\dfrac{\sum(X-\overline {X})^{2}}{N-1}} \nonumber \] We can fill in the numbers from the table and N to get: \[s_{Hth}=\sqrt{\dfrac{76.07}{18-1}} = \sqrt{\dfrac{76.07}{17 }}\nonumber \] Some division, then square rooting to get: \[s_{Hth}= \sqrt{4.47 }\nonumber \] \[s_{Hth}= 2.11 \nonumber \]

If you used spreadsheet, you might get 2.12. That's fine, but we'll use 2.11 for future calculations.

Exercise \(\PageIndex{3}\)

Calculate the standard deviation of the Happiness variable.

\[s=\sqrt{\dfrac{\sum(X-\overline {X})^{2}}{N-1}} \nonumber \] \[s_{Hpp}=\sqrt{\dfrac{173.99}{18-1}} = \sqrt{\dfrac{173.99}{17 }}\nonumber \] \[s_{Hpp}= \sqrt{10.23 }\nonumber \] \[s_{Hpp}= 3.20 \nonumber \]

Next up, we must calculate the slope of the line. There are easier ways to show this if we start substituting names for symbols, but let's stick with the names of our variables in this formula:

\[\mathrm{b}=\dfrac{(Diff_{Hth} \times Diff_{Hpp})}{Diff_{Hth}^2} =\dfrac{58.22}{76.07 }=0.77 \nonumber \]

What this equation is telling us to do is pretty simple once we have the Sum of Products table filled out. We just take the sum of the multiplication of each of the differences (that's the most bottom most right cell in the table), and divide that by the sum of the difference scores squared for the Health variable. The result means that as Health (\(X\)) changes by 1 unit, Happiness (\(Y\)) will change by 0.77. This is a positive relation.

Next, we use the slope, along with the means of each variable, to compute the intercept: \(a =\overline{X_y}-b\overline{X_x} \)

Example \(\PageIndex{4}\)

Using the means and the slope (b) that we just calculated, calculate the intercept (a).

\[a =\overline{X_y}-b\overline{X_x} \nonumber \] \[a =\overline{X}_{Hpp}-(b \times \overline{X}_{Hth}) \nonumber \] \[a =17.46-(0.77 * 19.78) \nonumber \] \[a =17.46-(15.23 ) \nonumber \] \[a =2.23 \nonumber \]

This number varies widely based on how many decimal points you save while calculating. The numbers shown are when only two decimal points are used, which is the minimum that you should be writing down and saving.

For this particular problem (and most regressions), the intercept is not an important or interpretable value, so we will not read into it further.

Now that we have all of our parameters estimated, we can give the full equation for our line of best fit: \(\widehat{y} =\mathrm{a}+(\mathrm{b} \times {X}) \)

Example \(\PageIndex{5}\)

Construct the regression line equation for the predicted Happiness score (\(\widehat{y}).

\[\widehat{y} = 2.23 + 0.77\text{x} \nonumber \]

It doesn't quite make sense yet, but you actually just answered many potential research questions! We can also plot this relation in a scatterplot and overlay our line onto it, as shown in Figure \(\PageIndex{1}\).

We can use the regression line equation to find predicted values for each observation and use them to calculate our sums of squares for the Model and the Error, but this is tedious to do by hand, so we will let the computer software do the heavy lifting in that column of our ANOVA Summary Table in Table \(\PageIndex{3}\).

Happily, the Total row is still the sum of the other two rows, so that was added, too. Now that we have these, we can fill in the rest of the ANOVA table.

Example \(\PageIndex{6}\)

Fill in the rest of the ANOVA Summary Table from Table \(\PageIndex{3}\).

Happily again, we can do a computation check to make sure that our Degrees of Freedom are correct since the sum of the Model's df and the Error's df should equal the Total df. And since \(1 + 16 = 17\), we're doing well!

This gives us an obtained \(F\) statistic of 5.52, which we will now use to test our hypothesis.

Step 4: Make the Decision

We now have everything we need to make our final decision. Our calculated test statistic was \(F_{Calc} = 5.52\) and our critical value was \(F_{Crit} = 4.49\). Since our calculated test statistic is greater than our critical value, we can reject the null hypothesis because this is still true:

Critical \(<\) Calculated \(=\) Reject null \(=\) There is a linear relationship. \(= p<.05 \)

Critical \(>\) Calculated \(=\) Retain null \(=\) There is not a linear relationship. \(= p>.05\)

Write-Up: Reporting the Results

We got here a sorta roundabout way, so it's hard to figure out what our conclusion should look like. Let's start by including the four components needed for reporting results .

Example \(\PageIndex{7}\)

Use the four components for reporting results to start your concluding paragraph:

• The statistical test is preceded by the descriptive statistics (means).
• The description tells you what the research hypothesis being tested is.
• A "statistical sentence" showing the results is included.
• The results are interpreted in relation to the research hypothesis.
• The average health score was 19.78. The average happiness score was 17.46.
• The research hypothesis was that here will be a positive slope in the regression line for happiness and health.
• The ANOVA results were F(1,16)=5.52, p< .05.
• The results are statistically significant, and the positive Sum or Products shows a positive slope so the research hypothesis is supported.

Let's add one more sentence for a nice little conclusion to our regression analysis: We can predict levels of happiness based on how healthy someone is. So, our final write-up could be something like:

We can predict levels of happiness (M=17.46) based on how healthy someone is (M=19.78) (F(1,16)=5.52, p< .05). The average health score was 19.78. The average happiness score was 17.46. The research hypothesis was supported; there is a positive slope in the regression line for happiness and health.

Yep, that's pretty clunky. As you learn more about regression (in future classes), the research hypotheses will make more sense.

Accuracy in Prediction

We found a large, statistically significant relation between our variables, which is what we hoped for. However, if we want to use our estimated line of best fit for future prediction, we will also want to know how precise or accurate our predicted values are. What we want to know is the average distance from our predictions to our actual observed values, or the average size of the residual (\(Y − \widehat {Y}\)). The average size of the residual is known by a specific name: the standard error of the estimate (\(S_{(Y-\widehat{Y})}\)), which is given by the formula

\[S_{(Y-\widehat{Y})}=\sqrt{\dfrac{\sum(Y-\widehat{Y})^{2}}{N-2}} \nonumber \]

This formula is almost identical to our standard deviation formula, and it follows the same logic. We square our residuals, add them up, then divide by the degrees of freedom. Although this sounds like a long process, we already have the sum of the squared residuals in our ANOVA table! In fact, the value under the square root sign is just the \(SS_E\) divided by the \(df_E\), which we know is called the mean squared error, or \(MS_E\):

\[s_{(Y-\widehat{Y})}=\sqrt{\dfrac{\sum(Y-\widehat{Y})^{2}}{N-2}}=\sqrt{MS_E} \nonumber \]

For our example:

\[s_{(Y-\widehat{Y})}=\sqrt{\dfrac{129.37}{16}}=\sqrt{8.09}=2.84 \nonumber \nonumber \]

So on average, our predictions are just under 3 points away from our actual values.

There are no specific cutoffs or guidelines for how big our standard error of the estimate can or should be; it is highly dependent on both our sample size and the scale of our original \(Y\) variable, so expert judgment should be used. In this case, the estimate is not that far off and can be considered reasonably precise.

Clear as mud? Let's try another practice problem!