Hypothesis Test

!"pothesis #est Douglas A Lind, William G Marchal and Samuel A Wathen. Statistical techniques in Business and Economics Chapter 1, 11

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What is a !"pothesis$ What is a Hypothesis?  A !"pothesis is a statement a&out the 'alue o( a population parameter de'eloped (or the purpose o( testing. E)amples o( h"potheses made a&out a population parameter are*   #he mean monthl" income (or s"stems anal"sts is +,-%. +,-%.  What is Hypothesis Testing?  !"pothesis testing is a procedure, &ased on sample e'idence and pro&a&ilit" theor", used to determine /hether the h"pothesis is a reasona&le statement and should not &e re0ected, or is unreasona&le and should &e re0ected. 

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What is a !"pothesis$ What is a Hypothesis?  A !"pothesis is a statement a&out the 'alue o( a population parameter de'eloped (or the purpose o( testing. E)amples o( h"potheses made a&out a population parameter are*   #he mean monthl" income (or s"stems anal"sts is +,-%. +,-%.  What is Hypothesis Testing?  !"pothesis testing is a procedure, &ased on sample e'idence and pro&a&ilit" theor", used to determine /hether the h"pothesis is a reasona&le statement and should not &e re0ected, or is unreasona&le and should &e re0ected. 

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!"pothesis #esting Steps

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mportant #hings to 2emem&er a&out ! and !1 !* null h"pothesis and ! 1* alternate h"pothesis  !  and !  are mutuall" e)clusi'e and collecti'el"  1 e)hausti'e  !  is al/a"s presumed to &e true   !  has the &urden o( proo( 1  A random sample 4 n5 is used to 6 reject H 7   ( /e conclude 8do not re0ect ! 8, this does not necessaril"  mean that the null h"pothesis is true, it onl" suggests that there is not su9cient e'idence to re0ect ! : re0ecting the null h"pothesis then, suggests that the alternati'e h"pothesis ma" &e true. 

Equality is always part of H0 (e.g. “=” , “≥” , “”!. “"” “#” an$ “%” always part of H & 

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!o/ to Set ;p a Claim as !"pothesis n actual practice, the status quo is set up as ! ( the claim is 6&oast(ul7 the claim is set up as !1. 2emem&er, !1 has the &urden o( proo(  n pro&lem sol'ing, loo< (or 'ey wor$s and con'ert them into s"m&ols. Some ne?tail 's. #/o?tail #est

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!"pothesis Setups (or #esting a Mean 4µ5

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!"pothesis Setups (or #esting a =roportion 4π5

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E)ample  amesto/n Steel Compan" manu(actures and assem&les des