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    Level of Significance

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    Felicity Angela Alagos
    This document discusses key concepts in hypothesis testing including: - Level of significance refers to the probability of rejecting the null hypothesis when it is true, with 5% often used. - Critical value is the threshold that separates the rejection and non-rejection regions. - Two-tailed tests reject the null if the sample mean is significantly higher or lower than the population mean, while one-tailed tests only consider departures in one direction specified by the alternative hypothesis. - The steps of hypothesis testing are stated as: 1) state null and alternative hypotheses, 2) set significance level, 3) select test, 4) determine critical region, 5) compute test statistic, and 6) make a decision.

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    Level of Significance

    Uploaded by

    Felicity Angela Alagos
    84 views14 pages
    This document discusses key concepts in hypothesis testing including: - Level of significance refers to the probability of rejecting the null hypothesis when it is true, with 5% often used. - Critical value is the threshold that separates the rejection and non-rejection regions. - Two-tailed tests reject the null if the sample mean is significantly higher or lower than the population mean, while one-tailed tests only consider departures in one direction specified by the alternative hypothesis. - The steps of hypothesis testing are stated as: 1) state null and alternative hypotheses, 2) set significance level, 3) select test, 4) determine critical region, 5) compute test statistic, and 6) make a decision.

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    This document discusses key concepts in hypothesis testing including: - Level of significance refers to the probability of rejecting the null hypothesis when it is true, with 5% often used. - Critical value is the threshold that separates the rejection and non-rejection regions. - Two-tailed tests reject the null if the sample mean is significantly higher or lower than the population mean, while one-tailed tests only consider departures in one direction specified by the alternative hypothesis. - The steps of hypothesis testing are stated as: 1) state null and alternative hypotheses, 2) set significance level, 3) select test, 4) determine critical region, 5) compute test statistic, and 6) make a decision.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    84 views14 pages

    Level of Significance

    Uploaded by

    Felicity Angela Alagos
    This document discusses key concepts in hypothesis testing including: - Level of significance refers to the probability of rejecting the null hypothesis when it is true, with 5% often used. - Critical value is the threshold that separates the rejection and non-rejection regions. - Two-tailed tests reject the null if the sample mean is significantly higher or lower than the population mean, while one-tailed tests only consider departures in one direction specified by the alternative hypothesis. - The steps of hypothesis testing are stated as: 1) state null and alternative hypotheses, 2) set significance level, 3) select test, 4) determine critical region, 5) compute test statistic, and 6) make a decision.

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    You are on page 1of 14

    LEVEL OF SIGNIFICANCE

    CRITICAL VALUE
    TWO – TAILED AND ONE –
    TAILED TEST OF HYPOTHESIS

    STEPS IN HYPOTHESIS TESTING

    Teacher: Mrs. JENY E. POBLETE


    LEVEL OF SIGNIFICANCE
    Refers to the probability of
    rejecting the null hypothesis when
    in fact it is true. There is no single
    standard or universal level of
    significance for testing hypothesis.
    In some instances, a 5 % level of
    significance is used.
    This implies that the maximum
    probability of rejecting a true
    null hypothesis is 5 %. This means
    that we can accept 5 chances
    in 100 that we would reject the
    null hypothesis when it is true.
    (i.e., we are willing to commit an
    alpha error or type I error of 5 %)
    A 5 % significance level,
    thus implies that we are 95
    % confident that we have
    made the right decision of
    not rejecting a true null
    hypothesis. Published
    research results often test
    hypothesis at 1 % level of
    significance.
    It is possible to test
    hypothesis at any level of
    significance. The higher the
    significance level we use
    for testing a hypothesis, the
    higher the probability of
    rejecting a null hypothesis
    when it is true.
    CRITICAL VALUE
    Thecritical value is the value
    that separates the rejection
    region from the non –
    rejection region.
    TWO – TAILED AND ONE – TAILED TEST OF
    HYPOTHESIS

    The statement of the


    alternative hypothesis
    dictates the use of one –
    tailed test or two – tailed
    test.
    TWO – TAILED TEST
    A two – tailed test of hypothesis
    will reject the null hypothesis if the
    sample mean is significantly
    higher than or lower than the
    hypothesized population mean.
    Thus, in a two – tailed test, there
    are two rejections.
    ONE – TAILED TEST
    When the decision maker or
    statistician is interested only in
    detecting departures from null
    hypothesis in one direction, the
    hypothesis – testing procedure
    is one – tailed test.
    STEPS IN HYPOTHESIS - TESTING
     The
    procedures in hypothesis testing can be
    summarized in the following steps.
    Step 1. State the null ( ) and alternative
    ( ) hypothesis

    Step 2: Set the level of significance ( ).

    Step 3: Select the appropriate test


    procedure.
    Step 4: Determine the critical/ rejection
    region.
    Step 5: Compute the value of the test
    statistic.
    Step 6: State the statistical decision and
    conclusion based on the following
    guideline(decision rule)
    CRITICAL VALUE APPROACH

    (By comparing computed value /s


    and critical values/s)
     Reject if the computed value
    falls on the rejection region.
     Do not reject if the computed
    value falls on the non – rejection
    region.
    USING P – VALUE APPROACH

     Reject if the p – value is less


    than
     Do not reject if the p – value
    is greater than or equal to
    “If you are not willing to
    learn no one can help
    you but If you are willing
    to Learn no one can stop
    you.”

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