Introduction to

Hypothesis Testing
 Objectives:
 Identify the null and alternative hypotheses;

 Relate the hypothesis testing into real-life

situation; and

 Illustrate the critical and non-critical region.

 Introduction

Population Conclusion Based

on the Sample

Hypotheses

Sample

Statistical Inference
 Introduction

Areas:
 Introduction
Terms:
Hypothesis
 The Null Hypothesis, H0

States the Ex: The average number of TV

assumption sets in a subdivision is at least
(numerical) to be three. (𝐻0 : 𝜇 ≥ 3)
tested

Is always about a H0 : μ  3
population parameter,
not about a sample H0 : x  3
statistic
 The Null Hypothesis, H0
(continued)

Begin with the

Similar to the notion of
assumption that the
innocent until proven
null hypothesis is
guilty.
true

Refers to the status quo

Always contains
“=” , “≤” or “” sign

May or may not be rejected

 The Alternative Hypothesis, HA

Is the opposite of the Challenges the status quo

null hypothesis
Never contains
H0: The average number the “=” , “≤” or “” sign
of TV sets in a
subdivision is at least
May or may not be accepted
three. (𝐻0 : 𝜇 ≥ 3)

HA: The average number Is generally the hypothesis that

of TV sets in U.S. is believed (or needs to
homes is less than 3. be supported) by the researcher
(𝐻𝐴 : 𝜇 < 3) – a research hypothesis
 Formulating Hypotheses
Example 1: Ford motor company has worked to reduce road
noise inside the cab of the redesigned F150 pickup truck. It
would like to report in its advertising that the truck is quieter.
The average of the prior design was 68 decibels at 60 mph.

H0: µ ≥ 68 (the truck is not quieter) status quo

HA: µ < 68 (the truck is quieter) wants to support

If the null hypothesis is rejected, Ford has sufficient evidence to

support that the truck is now quieter.
 Formulating Hypotheses
Example 2: The average annual income of buyers of Ford
F150 pickup trucks is claimed to be $65,000 per year. An
industry analyst would like to test this claim.

H0: µ = 65,000 (income is as claimed) status quo

HA: µ ≠ 65,000 (income is different than claimed)

The analyst will believe the claim unless sufficient

evidence is found to discredit it.
Errors in Making Decisions
 Errors in Making Decisions

Reject a true null hypothesis

Considered a serious type of error
The probability of Type I Error is 
Called level of significance
Set by researcher in advance
 Errors in Making Decisions

Reject a true null hypothesis Fail to reject a false null hypothesis

Considered a serious type of error
The probability of Type I Error is  The probability of Type II Error is 𝛽
Called level of significance
Set by researcher in advance
 Outcomes and Probabilities

Possible Hypothesis Test Outcomes

State of Nature
Decision H0 True H0 False
Do Not
No error Type II Error
Reject
Key: (1 -  ) (β)
Outcome H0
(Probability) Reject Type I Error No Error
H0 () (1-β)
 Level of Significance, 

 Defines unlikely values of sample statistic if

null hypothesis is true
 Defines rejection region of the sampling
distribution
 Is designated by  , (level of significance)
 Typical values are .01, .05, or .10
 Is selected by the researcher at the beginning
 Provides the critical value(s) of the test
 Tests and Regions

One-Tailed test

Left Right
Two-Tailed test
 Exercises
Write the null and alternative hypotheses for each of the following; identify if it
is two-tailed, left-tailed, or right-tailed; then using the z-table and t-table, show
the critical and non-critical regions with the critical value/s at α=0.01, 0.05, and
0.1.

1. To test whether or not a manufacturing equipment is out of service for an

average of more than 10 hours per month. (n=10)
2. To test whether the mean number of hours spent working per week by
senior supervisors in the company is different from 20 hours. (n=35)
3. To test if the mean length of work experience by an applicant is at least 2
years. (n=100)
4. To test if the mean medical expenses of students is less than P1000 a
month. (n=75)
5. To test if the mean time a customer has to wait to talk to the manager is at
most 15 minutes. (n=47)