Hypothesis Testing
A hypothesis test uses sample evidence to judge a claim about a population. You set up two hypotheses, assume the null is true, then decide whether the data is surprising enough to reject it.
What you'll be able to do
- State null and alternative hypotheses
- Understand the significance level
- Define the test statistic
- Outline the logic of a hypothesis test
Null and alternative hypotheses
The states the assumed value (e.g. ); the states what you suspect instead (e.g. ). You test against .
Significance level
The (e.g. 5%) is how strong the evidence must be before you reject . It is the probability of wrongly rejecting a true , so a smaller level demands stronger evidence.
Tip — The significance level is chosen before seeing the data — typically 5% or 1%.
The logic
Assume is true, then find how likely the observed (or more extreme) result would be. If that probability is below the significance level, the result is “surprising”, so you in favour of ; otherwise you do not reject . Conclusions are stated in context, never as absolute proof.
Formula recap
Common mistakes to avoid
Key takeaways
- H₀ states the assumed parameter value; H₁ states the suspected change.
- The significance level sets how strong the evidence must be.
- Assume H₀, judge how surprising the data is, then reject or not — in context.
Test yourself
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