Sunday, April 2, 2017

Insights into the concepts of hypothesis testing (Part 1)

In this week I will dig deeper into the concept of hypothesis testing. This blog aims to orient on various statistical concepts in an example oriented and simplified manner. With this aim I am now going deeper into the concept of hypothesis testing. Testing of hypothesis is confirmatory in nature. Here either a null hypothesis is rejected and an alternative hypothesis is accepted or a null hypothesis is accepted and an alternative hypothesis is rejected. These conclusions are based on results obtained from a sample, through the computation of a test statistic. This test statistic is based on sampling distribution of sample statistic. The value of the test statistic is compared with the tabulated value and either the null hypothesis is accepted or the null hypothesis is rejected. These are inferences about the population based on results obtained from the sample.
Null hypothesis is interested in maintaining the “Status Quo”. Alternative hypothesis is the opposite of null hypothesis.
For example: A person is looking for greener pastures and so is in look out for a new job.
Null Hypothesis: Current job is good   (maintaining the status quo)
Alternative Hypothesis: The new job is good (opposite of null hypothesis)

(to be continued tomorrow)

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