1. What Is Hypothesis? Explain Steps In Hypothesis Testing?

Introduction
A hypothesis is a specific, testable prediction. It describes in concrete
terms what you expect will happen in a certain circumstance.
Hypothesis is not a written conclusion. It is a preservation that is
taken before any research is done.
Definition
William Goode and Paul Hatt define hypothesis as a proposition,
which can be put to a test to determine its validity.
G.A. Lundberg defines hypothesis as a tentative generalization, the
validity of which remains to be tested.
Hypothesis can also be define as an unproved theory, proposition,
supposition, etc., tentatively accepted to explain certain facts or to
provide a basis for further investigation, argument, etc
PURPOSE OF HYPOTHESIS
A hypothesis is used in an experiment to define the relationship
between two variables. The purpose of a hypothesis is to find the
answer to a question. A formalized hypothesis will force us to think
about what results we should look for in an experiment. The first
variable is called the independent variable. This is the part of the
experiment that can be changed and tested. The independent variable

happens first and can be considered the cause of any changes in the
outcome. The outcome is called the dependent variable. The
independent variable in our previous example is not studying for a
test. The dependent variable that you are using to measure outcome is
your test score.
Let's use the previous example again to illustrate these ideas. The
hypothesis is testable because you will receive a score on your test
performance. It is measurable because you can compare test scores
received from when you did study and test scores received from when
you did not study.
A hypothesis should always:
Explain what you expect to happen
Be clear and understandable
Be testable
Be measurable
And contain an independent and dependent variable
HYPOTHESIS TESTING
A hypothesis test is a statistical test that is used to determine whether
there is enough evidence in a sample of data to infer that a certain
condition is true for the entire population. A hypothesis test examines
two opposing hypotheses about a population: the null hypothesis and
the alternative hypothesis. The null hypothesis is the statement being

tested. Usually the null hypothesis is a statement of "no effect" or "no

difference". The alternative hypothesis is the statement you want to be
able to conclude is true.
Based on the sample data, the test determines whether to reject the
null hypothesis. You use a p-value, to make the determination. If the
p-value is less than or equal to the level of significance, which is a
cut-off point that you define, and then you can reject the null
hypothesis.
A common misconception is that statistical hypothesis tests are
designed to select the more likely of two hypotheses. Instead, a test
will remain with the null hypothesis until there is enough evidence
(data) to support the alternative hypothesis.
Example of performing a basic hypothesis test
We can follow six basic steps to correctly set up and perform a
hypothesis test. For example, the manager of a pipe manufacturing
facility must ensure that the diameters of its pipes equal 5cm. The
manager follows the basic steps for doing a hypothesis test.
NOTE
We should determine the criteria for the test and the required sample
size before we collect the data.
1. Specify the hypotheses.

First, the manager formulates the hypotheses. The null hypothesis is:
The population mean of all the pipes is equal to 5 cm. formally, this is
written as: H0: = 5
Then, the manager chooses from the following alternative hypotheses:
Condition to test
The population mean is less than the target.
The population mean is greater than the target.
The population mean differs from the target.
Because they need to ensure that the pipes are not larger or smaller
than 5 cm, the manager chooses the two-sided alternative hypothesis,
which states that the population mean of all the pipes is not equal to 5
cm. Formally, this is written as H1: 5
2. Determine the power and sample size for the test.
The manager uses a power and sample size calculation to determine
how many pipes they need to measure to have a good chance of
detecting a difference of 0.1 cm or more from the target diameter.
3. Choose a significance level (also called alpha or ).
The manager selects a significance level 0.05, which is the most
commonly, used significance level.
4. Collect the data.
They collect a sample of pipes and measure their diameters.

5. Compare the p-value from the test to the significance level.

After they perform the hypothesis test, the manager obtains a p-value
of 0.004. The p-value is less than the significance level of 0.05.
6. Decide whether to reject or fail to reject the null hypothesis.
The manager rejects the null hypothesis and concludes that the mean
pipe diameter of all pipes is not equal to 5cm.
Data than can be analyze with a hypothesis test
Hypothesis tests can be used to evaluate many different parameters of
a population. Each test is designed to evaluate a parameter associated
with a certain type of data. Knowing the difference between the types
of data, and which parameters are associated with each data type, can
help you choose the most appropriate test.
Continuous Data
You will have continuous data when you evaluate the mean, median,
standard deviation, or variance.
When you measure a characteristic of a part or process, such as
length, weight, or temperature, you usually obtain continuous data.
Continuous data often includes fractional (or decimal) values.
For example, a quality engineer wants to determine whether the mean
weight differs from the value stated on the package label (500 g). The
engineer samples cereal boxes and records their weights.
Binomial Data

You will have binomial data when you evaluate a proportion or a

percentage.
When you classify an item, event, or person into one of two
categories you obtain binomial data. The two categories should be
mutually exclusive, such as yes/no, pass/fail, or defective/no
defective.
For example, engineers examine a sample of bolts for severe cracks
that make the bolts unusable. They record the number of bolts that are
inspected and the number of bolts that are rejected. The engineers
want to determine whether the percentage of defective bolts is less
than 0.2%.
Poisson Data
You will have Poisson data when you evaluate a rate of occurrence.
When you count the presence of a characteristic, result, or activity
over a certain amount of time, area, or other length of observation,
you obtain Poisson data. Poisson data are evaluated in counts per unit,
with the units the same size.
For example, inspectors at a bus company count the number of bus
breakdowns each day for 30 days. The company wants to determine
the daily rate of bus breakdowns.
About the Null and Alternative hypotheses

A hypothesis test examines two opposing hypotheses about a

population: the null hypothesis and the alternative hypothesis. How
you set up these hypotheses depends on what you are trying to show.
Null hypothesis (H0)
The null hypothesis states that a population parameter is equal to a
value. The null hypothesis is often an initial claim that researchers
specify using previous research or knowledge.
Alternative Hypothesis (H1)
The alternative hypothesis states that the population parameter is
different than the value of the population parameter in the null
hypothesis. The alternative hypothesis is what you might believe to be
true or hope to prove true.
When you do a hypothesis test, two types of errors are possible, they
are as follow: Type I
Type II.
The risks of these two errors are inversely related and determined by
the level of significance and the power for the test. Therefore, you
should determine which error has more severe consequences for your
situation before you define their risks.
No hypothesis test is 100% certain. Because the test is based on
probabilities, there is always a chance of drawing an incorrect
conclusion.

Type I error
When the null hypothesis is true and you reject it, you make a type I
error. The probability of making a type I error is , which is the level
of significance you set for your hypothesis test. An of 0.05 indicates
that you are willing to accept a 5% chance that you are wrong when
you reject the null hypothesis. To lower this risk, you must use a
lower value for . Type II error
When the null hypothesis is false and you fail to reject it, you make a
type II error. The probability of making a type II error is , which
depends on the power of the test. You can decrease your risk of
committing a type II error by ensuring your test has enough power.
You can do this by ensuring your sample size is large enough to detect
a practical difference when one truly exists.
The probability of rejecting the null hypothesis when it is false is
equal to 1. This value is the power of the test.
Null Hypothesis
Decision True
Fail
reject

to Correct

False
Decision Type II Error - fail to reject

(probability = 1 - )

the null when it is false

(probability = )

Reject

Type I Error - rejecting Correct Decision (probability

the null when it is true

(probability = )

= 1 - )

Example of type I and type II error

To understand the interrelationship between type I and type II error,
and to determine which error has more severe consequences for your
situation, consider the following example.
A medical researcher wants to compare the effectiveness of two
medications. The null and alternative hypotheses are:
Null hypothesis (H0): 1= 2
The two medications are equally effective.
Alternative hypothesis (H1): 1 2
The two medications are not equally effective.
A type I error occurs if the researcher rejects the null hypothesis and
concludes that the two medications are different when, in fact, they
are not. If the medications have the same effectiveness, the researcher
may not consider this error too severe because the patients still benefit
from the same level of effectiveness regardless of which medicine
they take. However, if a type II error occurs, the researcher fails to
reject the null hypothesis when it should be rejected. That is, the
researcher concludes that the medications are the same when, in fact,
they are different. This error is potentially life-threatening if the lesseffective medication is sold to the public instead of the more effective
one.

As you conduct your hypothesis tests, consider the risks of making

type I and type II errors. If the consequences of making one type of
error are more severe or costly than making the other type of error,
then choose a level of significance and a power for the test that will
reflect the relative severity of those consequences.