Hypothesis testing.

Abstract

Hypothesis testing is the process of making a choice between two conflicting hypotheses. The null hypothesis, H0, is a statistical proposition stating that there is no significant difference between a hypothesized value of a population parameter and its value estimated from a sample drawn from that population. The alternative hypothesis, H1 or Ha, is a statistical proposition stating that there is a significant difference between a hypothesized value of a population parameter and its estimated value. When the null hypothesis is tested, a decision is either correct or incorrect. An incorrect decision can be made in two ways: We can reject the null hypothesis when it is true (Type I error) or we can fail to reject the null hypothesis when it is false (Type II error). The probability of making Type I and Type II errors is designated by alpha and beta, respectively. The smallest observed significance level for which the null hypothesis would be rejected is referred to as the p-value. The p-value only has meaning as a measure of confidence when the decision is to reject the null hypothesis. It has no meaning when the decision is that the null hypothesis is true.