Page 263 - DMGT404 RESEARCH_METHODOLOGY

Unit 12: Hypothesis Testing

Degree of Freedom Notes
It tells the researcher the number of elements that can be chosen freely.

Example: a + b/2 = 5. fix a = 3, b has to be 7.
Therefore, the degree of freedom is 1.

Select Test Criteria

If the hypothesis pertains to a larger sample (30 or more), the Z-test is used. When the sample is
small (less than 30), the T-test is used.
Compute

Carry out computation.
Make Decisions

Accepting or rejecting of the null hypothesis depends on whether the computed value falls in the
region of rejection at a given level of significance.

Task Discuss when would you prefer two tailed test to one tailed test.

Self Assessment

Fill in the blanks:
1. Hypothesis testing is sometimes called ............................. analysis.
2. The confidence with which a null hypothesis is accepted or rejected depends upon the
.............................
3. The rejection of null hypothesis means that the ............................. hypothesis is accepted.

12.2 Errors in Hypothesis Testing

There are two types of errors:
1. Hypothesis is rejected when it is true.

2. Hypothesis is not rejected when it is false.
(1) is called Type 1 error (a), (2) is called Type 2 error (b). When a = 0.10 it means that true
hypothesis will be accepted in 90 out of 100 occasions. Thus, there is a risk of rejecting a true
hypothesis in 10 out of every 100 occasions. To reduce the risk, use a = 0.01 which implies that we
are prepared to take a 1% risk i.e., the probability of rejecting a true hypothesis is 1%. It is also
possible that in hypothesis testing, we may commit Type 2 error (b) i.e., accepting a null hypothesis
which is false.

Notes The only way to reduce Type 1 and Type 2 error is by increasing the sample size.

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