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Hypothesis Testing Explained with Examples

Hypothesis testing is a statistical method for making decisions about population parameters based on sample data, such as testing if a company's claim about bulb life is accurate. There are risks involved, including Type I Error (rejecting a true null hypothesis) and Type II Error (failing to reject a false null hypothesis). The Critical Value Approach involves steps like stating hypotheses, choosing a significance level, selecting a test statistic, and comparing the test statistic to critical values to draw conclusions.

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3 views1 page

Hypothesis Testing Explained with Examples

Hypothesis testing is a statistical method for making decisions about population parameters based on sample data, such as testing if a company's claim about bulb life is accurate. There are risks involved, including Type I Error (rejecting a true null hypothesis) and Type II Error (failing to reject a false null hypothesis). The Critical Value Approach involves steps like stating hypotheses, choosing a significance level, selecting a test statistic, and comparing the test statistic to critical values to draw conclusions.

Uploaded by

vishalkumarsagar2002
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

Assignment

Topic: Hypothesis Testing

Q1. Explain hypothesis testing with suitable examples.


Hypothesis testing is a statistical method used to make decisions about a population parameter
based on sample data. It helps verify whether an assumption (hypothesis) is true.
Example: A company claims that the average life of its bulbs is 1000 hours. A sample of 50 bulbs
is tested to check if the mean life is significantly different from 1000 hours using hypothesis testing.

Q2. What are the risks in decision making using hypothesis testing?
There are two major risks:
1. Type I Error (α): Rejecting a true null hypothesis. Example: Concluding a medicine works when it
2. Type II Error (β): Failing to reject a false null hypothesis. Example: Concluding a medicine doesn’

Q3. Steps involved in Critical Value Approach to Hypothesis Testing:


1. State Null (H■) and Alternative (H■) hypotheses.
2. Choose level of significance (α).
3. Select the suitable test statistic (z, t, etc.).
4. Find critical value(s) from tables.
5. Compute test statistic using sample data.
6. Compare: If test statistic > critical value → Reject H■, otherwise → Fail to reject H■.
7. Draw conclusion.

Q4. Differentiate between Z-Test and T-Test:


Basis | Z-Test | T-Test
---------------------------------------------------------------
Sample Size | Used when n > 30 | Used when n < 30
Population Variance | Known | Unknown
Distribution | Normal Distribution | t-Distribution
Use | Large samples | Small samples

(End of Assignment)

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