Hypothesis Testing Steps for the Rejection Region Method State H 1 and State H 0 State the Test Statistic and its sampling distribution (normal or t) Determine.

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Presentation transcript:

Hypothesis Testing Steps for the Rejection Region Method State H 1 and State H 0 State the Test Statistic and its sampling distribution (normal or t) Determine the critical value that isolates a rejection region of size alpha State the Decision Rule Compute the observed value of the test statistic Compare the observed value of the test statistic to the critical value and make a decision

Hypothesis Testing Steps for the p-value Method State H 1 and State H 0 State the Test Statistic and its sampling distribution (normal or t) Compute the observed value of the test statistic and the probability of this value or one more extreme assuming H 0 is true (the p-value) Compare the observed p-value to alpha and make a decision

Possible Decisions Reject H 0 Conclude H 1 with less than  probability of Type I error (p-value) Fail to reject H 0 Assume H 0 with unknown probability  of Type II error

Types of Errors I – Rejecting a true H 0 II – Failing to reject a false H 0

Power The power of a test statistic is the probability of correctly rejecting a false H 0 Power = 1-  probability of Type II error

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