quantitative decision making
International Islamic University Malaysia
Graduate School of Management
ECON 6130
Quantitative Decision Making
Chapter 10
One-Sample Tests of Hypothesis
Dr. Intan Zanariah Zakaria
GOALS
• Define a hypothesis and hypothesis testing.
• Describe the five-step hypothesis-testing procedure.
• Distinguish between a one-tailed and a two-tailed test of hypothesis.
• Conduct a test of hypothesis about a population mean. • Conduct a test of hypothesis about a population proportion. • Define Type I and Type II errors.
• Compute the probability of a Type II error.
Hypothesis, Hypothesis and Testing
HYPOTHESIS A statement about the value of a population parameter developed for the purpose of testing.
HYPOTHESIS TESTING A procedure based on sample evidence and probability theory to determine whether the hypothesis is a reasonable statement.
Null and Alternate Hypothesis
NULL HYPOTHESIS A statement about the value of a population parameter developed for the purpose of testing numerical evidence.
ALTERNATE HYPOTHESIS A statement that is accepted if the sample data provide sufficient evidence that the null hypothesis is false.
Test Statistic versus Critical Value
TEST STATISTIC A value, determined from sample information, used to determine whether to reject the null hypothesis.
CRITICAL VALUE The dividing point between the region where the null hypothesis is rejected and the region where it is not rejected.
Important Things to Remember about
H0 and H1
•
•
•
•
•
•
H0: null hypothesis and H1: alternate hypothesis
H0 and H1 are mutually exclusive and collectively exhaustive
H0 is always presumed to be true
H1 has the burden of proof
A random sample (n) is used to “reject H0”
If we conclude 'do not reject H0', this does not necessarily mean that the null hypothesis is true, it only suggests that there is not sufficient evidence to reject H0; rejecting the null hypothesis then, suggests that the alternative
Graduate School of Management
ECON 6130
Quantitative Decision Making
Chapter 10
One-Sample Tests of Hypothesis
Dr. Intan Zanariah Zakaria
GOALS
• Define a hypothesis and hypothesis testing.
• Describe the five-step hypothesis-testing procedure.
• Distinguish between a one-tailed and a two-tailed test of hypothesis.
• Conduct a test of hypothesis about a population mean. • Conduct a test of hypothesis about a population proportion. • Define Type I and Type II errors.
• Compute the probability of a Type II error.
Hypothesis, Hypothesis and Testing
HYPOTHESIS A statement about the value of a population parameter developed for the purpose of testing.
HYPOTHESIS TESTING A procedure based on sample evidence and probability theory to determine whether the hypothesis is a reasonable statement.
Null and Alternate Hypothesis
NULL HYPOTHESIS A statement about the value of a population parameter developed for the purpose of testing numerical evidence.
ALTERNATE HYPOTHESIS A statement that is accepted if the sample data provide sufficient evidence that the null hypothesis is false.
Test Statistic versus Critical Value
TEST STATISTIC A value, determined from sample information, used to determine whether to reject the null hypothesis.
CRITICAL VALUE The dividing point between the region where the null hypothesis is rejected and the region where it is not rejected.
Important Things to Remember about
H0 and H1
•
•
•
•
•
•
H0: null hypothesis and H1: alternate hypothesis
H0 and H1 are mutually exclusive and collectively exhaustive
H0 is always presumed to be true
H1 has the burden of proof
A random sample (n) is used to “reject H0”
If we conclude 'do not reject H0', this does not necessarily mean that the null hypothesis is true, it only suggests that there is not sufficient evidence to reject H0; rejecting the null hypothesis then, suggests that the alternative