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• Indian J Crit Care Med
• v.23(Suppl 3); 2019 Sep

An Introduction to Statistics: Understanding Hypothesis Testing and Statistical Errors

Priya ranganathan.

1 Department of Anesthesiology, Critical Care and Pain, Tata Memorial Hospital, Mumbai, Maharashtra, India

2 Department of Surgical Oncology, Tata Memorial Centre, Mumbai, Maharashtra, India

The second article in this series on biostatistics covers the concepts of sample, population, research hypotheses and statistical errors.

How to cite this article

Ranganathan P, Pramesh CS. An Introduction to Statistics: Understanding Hypothesis Testing and Statistical Errors. Indian J Crit Care Med 2019;23(Suppl 3):S230–S231.

Two papers quoted in this issue of the Indian Journal of Critical Care Medicine report. The results of studies aim to prove that a new intervention is better than (superior to) an existing treatment. In the ABLE study, the investigators wanted to show that transfusion of fresh red blood cells would be superior to standard-issue red cells in reducing 90-day mortality in ICU patients. 1 The PROPPR study was designed to prove that transfusion of a lower ratio of plasma and platelets to red cells would be superior to a higher ratio in decreasing 24-hour and 30-day mortality in critically ill patients. 2 These studies are known as superiority studies (as opposed to noninferiority or equivalence studies which will be discussed in a subsequent article).

SAMPLE VERSUS POPULATION

A sample represents a group of participants selected from the entire population. Since studies cannot be carried out on entire populations, researchers choose samples, which are representative of the population. This is similar to walking into a grocery store and examining a few grains of rice or wheat before purchasing an entire bag; we assume that the few grains that we select (the sample) are representative of the entire sack of grains (the population).

The results of the study are then extrapolated to generate inferences about the population. We do this using a process known as hypothesis testing. This means that the results of the study may not always be identical to the results we would expect to find in the population; i.e., there is the possibility that the study results may be erroneous.

HYPOTHESIS TESTING

A clinical trial begins with an assumption or belief, and then proceeds to either prove or disprove this assumption. In statistical terms, this belief or assumption is known as a hypothesis. Counterintuitively, what the researcher believes in (or is trying to prove) is called the “alternate” hypothesis, and the opposite is called the “null” hypothesis; every study has a null hypothesis and an alternate hypothesis. For superiority studies, the alternate hypothesis states that one treatment (usually the new or experimental treatment) is superior to the other; the null hypothesis states that there is no difference between the treatments (the treatments are equal). For example, in the ABLE study, we start by stating the null hypothesis—there is no difference in mortality between groups receiving fresh RBCs and standard-issue RBCs. We then state the alternate hypothesis—There is a difference between groups receiving fresh RBCs and standard-issue RBCs. It is important to note that we have stated that the groups are different, without specifying which group will be better than the other. This is known as a two-tailed hypothesis and it allows us to test for superiority on either side (using a two-sided test). This is because, when we start a study, we are not 100% certain that the new treatment can only be better than the standard treatment—it could be worse, and if it is so, the study should pick it up as well. One tailed hypothesis and one-sided statistical testing is done for non-inferiority studies, which will be discussed in a subsequent paper in this series.

STATISTICAL ERRORS

There are two possibilities to consider when interpreting the results of a superiority study. The first possibility is that there is truly no difference between the treatments but the study finds that they are different. This is called a Type-1 error or false-positive error or alpha error. This means falsely rejecting the null hypothesis.

The second possibility is that there is a difference between the treatments and the study does not pick up this difference. This is called a Type 2 error or false-negative error or beta error. This means falsely accepting the null hypothesis.

The power of the study is the ability to detect a difference between groups and is the converse of the beta error; i.e., power = 1-beta error. Alpha and beta errors are finalized when the protocol is written and form the basis for sample size calculation for the study. In an ideal world, we would not like any error in the results of our study; however, we would need to do the study in the entire population (infinite sample size) to be able to get a 0% alpha and beta error. These two errors enable us to do studies with realistic sample sizes, with the compromise that there is a small possibility that the results may not always reflect the truth. The basis for this will be discussed in a subsequent paper in this series dealing with sample size calculation.

Conventionally, type 1 or alpha error is set at 5%. This means, that at the end of the study, if there is a difference between groups, we want to be 95% certain that this is a true difference and allow only a 5% probability that this difference has occurred by chance (false positive). Type 2 or beta error is usually set between 10% and 20%; therefore, the power of the study is 90% or 80%. This means that if there is a difference between groups, we want to be 80% (or 90%) certain that the study will detect that difference. For example, in the ABLE study, sample size was calculated with a type 1 error of 5% (two-sided) and power of 90% (type 2 error of 10%) (1).

Table 1 gives a summary of the two types of statistical errors with an example

Statistical errors

In the next article in this series, we will look at the meaning and interpretation of ‘ p ’ value and confidence intervals for hypothesis testing.

Source of support: Nil

Conflict of interest: None

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S.3 hypothesis testing.

In reviewing hypothesis tests, we start first with the general idea. Then, we keep returning to the basic procedures of hypothesis testing, each time adding a little more detail.

The general idea of hypothesis testing involves:

• Making an initial assumption.
• Collecting evidence (data).
• Based on the available evidence (data), deciding whether to reject or not reject the initial assumption.

Every hypothesis test — regardless of the population parameter involved — requires the above three steps.

Example S.3.1

Is normal body temperature really 98.6 degrees f section  .

Consider the population of many, many adults. A researcher hypothesized that the average adult body temperature is lower than the often-advertised 98.6 degrees F. That is, the researcher wants an answer to the question: "Is the average adult body temperature 98.6 degrees? Or is it lower?" To answer his research question, the researcher starts by assuming that the average adult body temperature was 98.6 degrees F.

Then, the researcher went out and tried to find evidence that refutes his initial assumption. In doing so, he selects a random sample of 130 adults. The average body temperature of the 130 sampled adults is 98.25 degrees.

Then, the researcher uses the data he collected to make a decision about his initial assumption. It is either likely or unlikely that the researcher would collect the evidence he did given his initial assumption that the average adult body temperature is 98.6 degrees:

• If it is likely , then the researcher does not reject his initial assumption that the average adult body temperature is 98.6 degrees. There is not enough evidence to do otherwise.
• either the researcher's initial assumption is correct and he experienced a very unusual event;
• or the researcher's initial assumption is incorrect.

In statistics, we generally don't make claims that require us to believe that a very unusual event happened. That is, in the practice of statistics, if the evidence (data) we collected is unlikely in light of the initial assumption, then we reject our initial assumption.

Example S.3.2

Criminal trial analogy section  .

One place where you can consistently see the general idea of hypothesis testing in action is in criminal trials held in the United States. Our criminal justice system assumes "the defendant is innocent until proven guilty." That is, our initial assumption is that the defendant is innocent.

In the practice of statistics, we make our initial assumption when we state our two competing hypotheses -- the null hypothesis ( H 0 ) and the alternative hypothesis ( H A ). Here, our hypotheses are:

• H 0 : Defendant is not guilty (innocent)
• H A : Defendant is guilty

In statistics, we always assume the null hypothesis is true . That is, the null hypothesis is always our initial assumption.

The prosecution team then collects evidence — such as finger prints, blood spots, hair samples, carpet fibers, shoe prints, ransom notes, and handwriting samples — with the hopes of finding "sufficient evidence" to make the assumption of innocence refutable.

In statistics, the data are the evidence.

The jury then makes a decision based on the available evidence:

• If the jury finds sufficient evidence — beyond a reasonable doubt — to make the assumption of innocence refutable, the jury rejects the null hypothesis and deems the defendant guilty. We behave as if the defendant is guilty.
• If there is insufficient evidence, then the jury does not reject the null hypothesis . We behave as if the defendant is innocent.

In statistics, we always make one of two decisions. We either "reject the null hypothesis" or we "fail to reject the null hypothesis."

Errors in Hypothesis Testing Section  

Did you notice the use of the phrase "behave as if" in the previous discussion? We "behave as if" the defendant is guilty; we do not "prove" that the defendant is guilty. And, we "behave as if" the defendant is innocent; we do not "prove" that the defendant is innocent.

This is a very important distinction! We make our decision based on evidence not on 100% guaranteed proof. Again:

• If we reject the null hypothesis, we do not prove that the alternative hypothesis is true.
• If we do not reject the null hypothesis, we do not prove that the null hypothesis is true.

We merely state that there is enough evidence to behave one way or the other. This is always true in statistics! Because of this, whatever the decision, there is always a chance that we made an error .

Let's review the two types of errors that can be made in criminal trials:

Table S.3.2 shows how this corresponds to the two types of errors in hypothesis testing.

Note that, in statistics, we call the two types of errors by two different  names -- one is called a "Type I error," and the other is called  a "Type II error." Here are the formal definitions of the two types of errors:

There is always a chance of making one of these errors. But, a good scientific study will minimize the chance of doing so!

Making the Decision Section  

Recall that it is either likely or unlikely that we would observe the evidence we did given our initial assumption. If it is likely , we do not reject the null hypothesis. If it is unlikely , then we reject the null hypothesis in favor of the alternative hypothesis. Effectively, then, making the decision reduces to determining "likely" or "unlikely."

In statistics, there are two ways to determine whether the evidence is likely or unlikely given the initial assumption:

• We could take the " critical value approach " (favored in many of the older textbooks).
• Or, we could take the " P -value approach " (what is used most often in research, journal articles, and statistical software).

In the next two sections, we review the procedures behind each of these two approaches. To make our review concrete, let's imagine that μ is the average grade point average of all American students who major in mathematics. We first review the critical value approach for conducting each of the following three hypothesis tests about the population mean $\mu$:

In Practice

• We would want to conduct the first hypothesis test if we were interested in concluding that the average grade point average of the group is more than 3.
• We would want to conduct the second hypothesis test if we were interested in concluding that the average grade point average of the group is less than 3.
• And, we would want to conduct the third hypothesis test if we were only interested in concluding that the average grade point average of the group differs from 3 (without caring whether it is more or less than 3).

Upon completing the review of the critical value approach, we review the P -value approach for conducting each of the above three hypothesis tests about the population mean \(\mu\). The procedures that we review here for both approaches easily extend to hypothesis tests about any other population parameter.

Statistics Made Easy

Introduction to Hypothesis Testing

A statistical hypothesis is an assumption about a population parameter .

For example, we may assume that the mean height of a male in the U.S. is 70 inches.

The assumption about the height is the statistical hypothesis and the true mean height of a male in the U.S. is the population parameter .

A hypothesis test is a formal statistical test we use to reject or fail to reject a statistical hypothesis.

The Two Types of Statistical Hypotheses

To test whether a statistical hypothesis about a population parameter is true, we obtain a random sample from the population and perform a hypothesis test on the sample data.

There are two types of statistical hypotheses:

The null hypothesis , denoted as H 0 , is the hypothesis that the sample data occurs purely from chance.

The alternative hypothesis , denoted as H 1 or H a , is the hypothesis that the sample data is influenced by some non-random cause.

Hypothesis Tests

A hypothesis test consists of five steps:

1. State the hypotheses. 

State the null and alternative hypotheses. These two hypotheses need to be mutually exclusive, so if one is true then the other must be false.

2. Determine a significance level to use for the hypothesis.

Decide on a significance level. Common choices are .01, .05, and .1. 

3. Find the test statistic.

Find the test statistic and the corresponding p-value. Often we are analyzing a population mean or proportion and the general formula to find the test statistic is: (sample statistic – population parameter) / (standard deviation of statistic)

4. Reject or fail to reject the null hypothesis.

Using the test statistic or the p-value, determine if you can reject or fail to reject the null hypothesis based on the significance level.

The p-value  tells us the strength of evidence in support of a null hypothesis. If the p-value is less than the significance level, we reject the null hypothesis.

5. Interpret the results. 

Interpret the results of the hypothesis test in the context of the question being asked. 

The Two Types of Decision Errors

There are two types of decision errors that one can make when doing a hypothesis test:

Type I error: You reject the null hypothesis when it is actually true. The probability of committing a Type I error is equal to the significance level, often called  alpha , and denoted as α.

Type II error: You fail to reject the null hypothesis when it is actually false. The probability of committing a Type II error is called the Power of the test or  Beta , denoted as β.

One-Tailed and Two-Tailed Tests

A statistical hypothesis can be one-tailed or two-tailed.

A one-tailed hypothesis involves making a “greater than” or “less than ” statement.

For example, suppose we assume the mean height of a male in the U.S. is greater than or equal to 70 inches. The null hypothesis would be H0: µ ≥ 70 inches and the alternative hypothesis would be Ha: µ < 70 inches.

A two-tailed hypothesis involves making an “equal to” or “not equal to” statement.

For example, suppose we assume the mean height of a male in the U.S. is equal to 70 inches. The null hypothesis would be H0: µ = 70 inches and the alternative hypothesis would be Ha: µ ≠ 70 inches.

Note: The “equal” sign is always included in the null hypothesis, whether it is =, ≥, or ≤.

Related:   What is a Directional Hypothesis?

Types of Hypothesis Tests

There are many different types of hypothesis tests you can perform depending on the type of data you’re working with and the goal of your analysis.

The following tutorials provide an explanation of the most common types of hypothesis tests:

Introduction to the One Sample t-test Introduction to the Two Sample t-test Introduction to the Paired Samples t-test Introduction to the One Proportion Z-Test Introduction to the Two Proportion Z-Test

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In today’s data-driven world , decisions are based on data all the time. Hypothesis plays a crucial role in that process, whether it may be making business decisions, in the health sector, academia, or in quality improvement. Without hypothesis & hypothesis tests, you risk drawing the wrong conclusions and making bad decisions. In this tutorial, you will look at Hypothesis Testing in Statistics.

What Is Hypothesis Testing in Statistics?

Hypothesis Testing is a type of statistical analysis in which you put your assumptions about a population parameter to the test. It is used to estimate the relationship between 2 statistical variables.

Let's discuss few examples of statistical hypothesis from real-life - 

• A teacher assumes that 60% of his college's students come from lower-middle-class families.
• A doctor believes that 3D (Diet, Dose, and Discipline) is 90% effective for diabetic patients.

Now that you know about hypothesis testing, look at the two types of hypothesis testing in statistics.

Hypothesis Testing Formula

Z = ( x̅ – μ0 ) / (σ /√n)

• Here, x̅ is the sample mean,
• μ0 is the population mean,
• σ is the standard deviation,
• n is the sample size.

How Hypothesis Testing Works?

An analyst performs hypothesis testing on a statistical sample to present evidence of the plausibility of the null hypothesis. Measurements and analyses are conducted on a random sample of the population to test a theory. Analysts use a random population sample to test two hypotheses: the null and alternative hypotheses.

The null hypothesis is typically an equality hypothesis between population parameters; for example, a null hypothesis may claim that the population means return equals zero. The alternate hypothesis is essentially the inverse of the null hypothesis (e.g., the population means the return is not equal to zero). As a result, they are mutually exclusive, and only one can be correct. One of the two possibilities, however, will always be correct.

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Null Hypothesis and Alternate Hypothesis

The Null Hypothesis is the assumption that the event will not occur. A null hypothesis has no bearing on the study's outcome unless it is rejected.

H0 is the symbol for it, and it is pronounced H-naught.

The Alternate Hypothesis is the logical opposite of the null hypothesis. The acceptance of the alternative hypothesis follows the rejection of the null hypothesis. H1 is the symbol for it.

Let's understand this with an example.

A sanitizer manufacturer claims that its product kills 95 percent of germs on average. 

To put this company's claim to the test, create a null and alternate hypothesis.

H0 (Null Hypothesis): Average = 95%.

Alternative Hypothesis (H1): The average is less than 95%.

Another straightforward example to understand this concept is determining whether or not a coin is fair and balanced. The null hypothesis states that the probability of a show of heads is equal to the likelihood of a show of tails. In contrast, the alternate theory states that the probability of a show of heads and tails would be very different.

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Hypothesis Testing Calculation With Examples

Let's consider a hypothesis test for the average height of women in the United States. Suppose our null hypothesis is that the average height is 5'4". We gather a sample of 100 women and determine that their average height is 5'5". The standard deviation of population is 2.

To calculate the z-score, we would use the following formula:

z = ( x̅ – μ0 ) / (σ /√n)

z = (5'5" - 5'4") / (2" / √100)

z = 0.5 / (0.045)

 We will reject the null hypothesis as the z-score of 11.11 is very large and conclude that there is evidence to suggest that the average height of women in the US is greater than 5'4".

Steps of Hypothesis Testing

Step 1: specify your null and alternate hypotheses.

It is critical to rephrase your original research hypothesis (the prediction that you wish to study) as a null (Ho) and alternative (Ha) hypothesis so that you can test it quantitatively. Your first hypothesis, which predicts a link between variables, is generally your alternate hypothesis. The null hypothesis predicts no link between the variables of interest.

Step 2: Gather Data

For a statistical test to be legitimate, sampling and data collection must be done in a way that is meant to test your hypothesis. You cannot draw statistical conclusions about the population you are interested in if your data is not representative.

Step 3: Conduct a Statistical Test

Other statistical tests are available, but they all compare within-group variance (how to spread out the data inside a category) against between-group variance (how different the categories are from one another). If the between-group variation is big enough that there is little or no overlap between groups, your statistical test will display a low p-value to represent this. This suggests that the disparities between these groups are unlikely to have occurred by accident. Alternatively, if there is a large within-group variance and a low between-group variance, your statistical test will show a high p-value. Any difference you find across groups is most likely attributable to chance. The variety of variables and the level of measurement of your obtained data will influence your statistical test selection.

Step 4: Determine Rejection Of Your Null Hypothesis

Your statistical test results must determine whether your null hypothesis should be rejected or not. In most circumstances, you will base your judgment on the p-value provided by the statistical test. In most circumstances, your preset level of significance for rejecting the null hypothesis will be 0.05 - that is, when there is less than a 5% likelihood that these data would be seen if the null hypothesis were true. In other circumstances, researchers use a lower level of significance, such as 0.01 (1%). This reduces the possibility of wrongly rejecting the null hypothesis.

Step 5: Present Your Results 

The findings of hypothesis testing will be discussed in the results and discussion portions of your research paper, dissertation, or thesis. You should include a concise overview of the data and a summary of the findings of your statistical test in the results section. You can talk about whether your results confirmed your initial hypothesis or not in the conversation. Rejecting or failing to reject the null hypothesis is a formal term used in hypothesis testing. This is likely a must for your statistics assignments.

Types of Hypothesis Testing

To determine whether a discovery or relationship is statistically significant, hypothesis testing uses a z-test. It usually checks to see if two means are the same (the null hypothesis). Only when the population standard deviation is known and the sample size is 30 data points or more, can a z-test be applied.

A statistical test called a t-test is employed to compare the means of two groups. To determine whether two groups differ or if a procedure or treatment affects the population of interest, it is frequently used in hypothesis testing.

Chi-Square 

You utilize a Chi-square test for hypothesis testing concerning whether your data is as predicted. To determine if the expected and observed results are well-fitted, the Chi-square test analyzes the differences between categorical variables from a random sample. The test's fundamental premise is that the observed values in your data should be compared to the predicted values that would be present if the null hypothesis were true.

Hypothesis Testing and Confidence Intervals

Both confidence intervals and hypothesis tests are inferential techniques that depend on approximating the sample distribution. Data from a sample is used to estimate a population parameter using confidence intervals. Data from a sample is used in hypothesis testing to examine a given hypothesis. We must have a postulated parameter to conduct hypothesis testing.

Bootstrap distributions and randomization distributions are created using comparable simulation techniques. The observed sample statistic is the focal point of a bootstrap distribution, whereas the null hypothesis value is the focal point of a randomization distribution.

A variety of feasible population parameter estimates are included in confidence ranges. In this lesson, we created just two-tailed confidence intervals. There is a direct connection between these two-tail confidence intervals and these two-tail hypothesis tests. The results of a two-tailed hypothesis test and two-tailed confidence intervals typically provide the same results. In other words, a hypothesis test at the 0.05 level will virtually always fail to reject the null hypothesis if the 95% confidence interval contains the predicted value. A hypothesis test at the 0.05 level will nearly certainly reject the null hypothesis if the 95% confidence interval does not include the hypothesized parameter.

Simple and Composite Hypothesis Testing

Depending on the population distribution, you can classify the statistical hypothesis into two types.

Simple Hypothesis: A simple hypothesis specifies an exact value for the parameter.

Composite Hypothesis: A composite hypothesis specifies a range of values.

A company is claiming that their average sales for this quarter are 1000 units. This is an example of a simple hypothesis.

Suppose the company claims that the sales are in the range of 900 to 1000 units. Then this is a case of a composite hypothesis.

One-Tailed and Two-Tailed Hypothesis Testing

The One-Tailed test, also called a directional test, considers a critical region of data that would result in the null hypothesis being rejected if the test sample falls into it, inevitably meaning the acceptance of the alternate hypothesis.

In a one-tailed test, the critical distribution area is one-sided, meaning the test sample is either greater or lesser than a specific value.

In two tails, the test sample is checked to be greater or less than a range of values in a Two-Tailed test, implying that the critical distribution area is two-sided.

If the sample falls within this range, the alternate hypothesis will be accepted, and the null hypothesis will be rejected.

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Right Tailed Hypothesis Testing

If the larger than (>) sign appears in your hypothesis statement, you are using a right-tailed test, also known as an upper test. Or, to put it another way, the disparity is to the right. For instance, you can contrast the battery life before and after a change in production. Your hypothesis statements can be the following if you want to know if the battery life is longer than the original (let's say 90 hours):

• The null hypothesis is (H0 <= 90) or less change.
• A possibility is that battery life has risen (H1) > 90.

The crucial point in this situation is that the alternate hypothesis (H1), not the null hypothesis, decides whether you get a right-tailed test.

Left Tailed Hypothesis Testing

Alternative hypotheses that assert the true value of a parameter is lower than the null hypothesis are tested with a left-tailed test; they are indicated by the asterisk "<".

Suppose H0: mean = 50 and H1: mean not equal to 50

According to the H1, the mean can be greater than or less than 50. This is an example of a Two-tailed test.

In a similar manner, if H0: mean >=50, then H1: mean <50

Here the mean is less than 50. It is called a One-tailed test.

Type 1 and Type 2 Error

A hypothesis test can result in two types of errors.

Type 1 Error: A Type-I error occurs when sample results reject the null hypothesis despite being true.

Type 2 Error: A Type-II error occurs when the null hypothesis is not rejected when it is false, unlike a Type-I error.

Suppose a teacher evaluates the examination paper to decide whether a student passes or fails.

H0: Student has passed

H1: Student has failed

Type I error will be the teacher failing the student [rejects H0] although the student scored the passing marks [H0 was true]. 

Type II error will be the case where the teacher passes the student [do not reject H0] although the student did not score the passing marks [H1 is true].

Level of Significance

The alpha value is a criterion for determining whether a test statistic is statistically significant. In a statistical test, Alpha represents an acceptable probability of a Type I error. Because alpha is a probability, it can be anywhere between 0 and 1. In practice, the most commonly used alpha values are 0.01, 0.05, and 0.1, which represent a 1%, 5%, and 10% chance of a Type I error, respectively (i.e. rejecting the null hypothesis when it is in fact correct).

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A p-value is a metric that expresses the likelihood that an observed difference could have occurred by chance. As the p-value decreases the statistical significance of the observed difference increases. If the p-value is too low, you reject the null hypothesis.

Here you have taken an example in which you are trying to test whether the new advertising campaign has increased the product's sales. The p-value is the likelihood that the null hypothesis, which states that there is no change in the sales due to the new advertising campaign, is true. If the p-value is .30, then there is a 30% chance that there is no increase or decrease in the product's sales.  If the p-value is 0.03, then there is a 3% probability that there is no increase or decrease in the sales value due to the new advertising campaign. As you can see, the lower the p-value, the chances of the alternate hypothesis being true increases, which means that the new advertising campaign causes an increase or decrease in sales.

Why is Hypothesis Testing Important in Research Methodology?

Hypothesis testing is crucial in research methodology for several reasons:

• Provides evidence-based conclusions: It allows researchers to make objective conclusions based on empirical data, providing evidence to support or refute their research hypotheses.
• Supports decision-making: It helps make informed decisions, such as accepting or rejecting a new treatment, implementing policy changes, or adopting new practices.
• Adds rigor and validity: It adds scientific rigor to research using statistical methods to analyze data, ensuring that conclusions are based on sound statistical evidence.
• Contributes to the advancement of knowledge: By testing hypotheses, researchers contribute to the growth of knowledge in their respective fields by confirming existing theories or discovering new patterns and relationships.

Limitations of Hypothesis Testing

Hypothesis testing has some limitations that researchers should be aware of:

• It cannot prove or establish the truth: Hypothesis testing provides evidence to support or reject a hypothesis, but it cannot confirm the absolute truth of the research question.
• Results are sample-specific: Hypothesis testing is based on analyzing a sample from a population, and the conclusions drawn are specific to that particular sample.
• Possible errors: During hypothesis testing, there is a chance of committing type I error (rejecting a true null hypothesis) or type II error (failing to reject a false null hypothesis).
• Assumptions and requirements: Different tests have specific assumptions and requirements that must be met to accurately interpret results.

After reading this tutorial, you would have a much better understanding of hypothesis testing, one of the most important concepts in the field of Data Science . The majority of hypotheses are based on speculation about observed behavior, natural phenomena, or established theories.

If you are interested in statistics of data science and skills needed for such a career, you ought to explore Simplilearn’s Post Graduate Program in Data Science.

If you have any questions regarding this ‘Hypothesis Testing In Statistics’ tutorial, do share them in the comment section. Our subject matter expert will respond to your queries. Happy learning!

1. What is hypothesis testing in statistics with example?

Hypothesis testing is a statistical method used to determine if there is enough evidence in a sample data to draw conclusions about a population. It involves formulating two competing hypotheses, the null hypothesis (H0) and the alternative hypothesis (Ha), and then collecting data to assess the evidence. An example: testing if a new drug improves patient recovery (Ha) compared to the standard treatment (H0) based on collected patient data.

2. What is hypothesis testing and its types?

Hypothesis testing is a statistical method used to make inferences about a population based on sample data. It involves formulating two hypotheses: the null hypothesis (H0), which represents the default assumption, and the alternative hypothesis (Ha), which contradicts H0. The goal is to assess the evidence and determine whether there is enough statistical significance to reject the null hypothesis in favor of the alternative hypothesis.

Types of hypothesis testing:

• One-sample test: Used to compare a sample to a known value or a hypothesized value.
• Two-sample test: Compares two independent samples to assess if there is a significant difference between their means or distributions.
• Paired-sample test: Compares two related samples, such as pre-test and post-test data, to evaluate changes within the same subjects over time or under different conditions.
• Chi-square test: Used to analyze categorical data and determine if there is a significant association between variables.
• ANOVA (Analysis of Variance): Compares means across multiple groups to check if there is a significant difference between them.

3. What are the steps of hypothesis testing?

The steps of hypothesis testing are as follows:

• Formulate the hypotheses: State the null hypothesis (H0) and the alternative hypothesis (Ha) based on the research question.
• Set the significance level: Determine the acceptable level of error (alpha) for making a decision.
• Collect and analyze data: Gather and process the sample data.
• Compute test statistic: Calculate the appropriate statistical test to assess the evidence.
• Make a decision: Compare the test statistic with critical values or p-values and determine whether to reject H0 in favor of Ha or not.
• Draw conclusions: Interpret the results and communicate the findings in the context of the research question.

4. What are the 2 types of hypothesis testing?

• One-tailed (or one-sided) test: Tests for the significance of an effect in only one direction, either positive or negative.
• Two-tailed (or two-sided) test: Tests for the significance of an effect in both directions, allowing for the possibility of a positive or negative effect.

The choice between one-tailed and two-tailed tests depends on the specific research question and the directionality of the expected effect.

5. What are the 3 major types of hypothesis?

The three major types of hypotheses are:

• Null Hypothesis (H0): Represents the default assumption, stating that there is no significant effect or relationship in the data.
• Alternative Hypothesis (Ha): Contradicts the null hypothesis and proposes a specific effect or relationship that researchers want to investigate.
• Nondirectional Hypothesis: An alternative hypothesis that doesn't specify the direction of the effect, leaving it open for both positive and negative possibilities.

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Hypothesis Testing – A Deep Dive into Hypothesis Testing, The Backbone of Statistical Inference

• September 21, 2023

Explore the intricacies of hypothesis testing, a cornerstone of statistical analysis. Dive into methods, interpretations, and applications for making data-driven decisions.

In this Blog post we will learn:

• What is Hypothesis Testing?
• Steps in Hypothesis Testing 2.1. Set up Hypotheses: Null and Alternative 2.2. Choose a Significance Level (α) 2.3. Calculate a test statistic and P-Value 2.4. Make a Decision
• Example : Testing a new drug.
• Example in python

1. What is Hypothesis Testing?

In simple terms, hypothesis testing is a method used to make decisions or inferences about population parameters based on sample data. Imagine being handed a dice and asked if it’s biased. By rolling it a few times and analyzing the outcomes, you’d be engaging in the essence of hypothesis testing.

Think of hypothesis testing as the scientific method of the statistics world. Suppose you hear claims like “This new drug works wonders!” or “Our new website design boosts sales.” How do you know if these statements hold water? Enter hypothesis testing.

2. Steps in Hypothesis Testing

• Set up Hypotheses : Begin with a null hypothesis (H0) and an alternative hypothesis (Ha).
• Choose a Significance Level (α) : Typically 0.05, this is the probability of rejecting the null hypothesis when it’s actually true. Think of it as the chance of accusing an innocent person.
• Calculate Test statistic and P-Value : Gather evidence (data) and calculate a test statistic.
• p-value : This is the probability of observing the data, given that the null hypothesis is true. A small p-value (typically ≤ 0.05) suggests the data is inconsistent with the null hypothesis.
• Decision Rule : If the p-value is less than or equal to α, you reject the null hypothesis in favor of the alternative.

2.1. Set up Hypotheses: Null and Alternative

Before diving into testing, we must formulate hypotheses. The null hypothesis (H0) represents the default assumption, while the alternative hypothesis (H1) challenges it.

For instance, in drug testing, H0 : “The new drug is no better than the existing one,” H1 : “The new drug is superior .”

2.2. Choose a Significance Level (α)

When You collect and analyze data to test H0 and H1 hypotheses. Based on your analysis, you decide whether to reject the null hypothesis in favor of the alternative, or fail to reject / Accept the null hypothesis.

The significance level, often denoted by $α$, represents the probability of rejecting the null hypothesis when it is actually true.

In other words, it’s the risk you’re willing to take of making a Type I error (false positive).

Type I Error (False Positive) :

• Symbolized by the Greek letter alpha (α).
• Occurs when you incorrectly reject a true null hypothesis . In other words, you conclude that there is an effect or difference when, in reality, there isn’t.
• The probability of making a Type I error is denoted by the significance level of a test. Commonly, tests are conducted at the 0.05 significance level , which means there’s a 5% chance of making a Type I error .
• Commonly used significance levels are 0.01, 0.05, and 0.10, but the choice depends on the context of the study and the level of risk one is willing to accept.

Example : If a drug is not effective (truth), but a clinical trial incorrectly concludes that it is effective (based on the sample data), then a Type I error has occurred.

Type II Error (False Negative) :

• Symbolized by the Greek letter beta (β).
• Occurs when you accept a false null hypothesis . This means you conclude there is no effect or difference when, in reality, there is.
• The probability of making a Type II error is denoted by β. The power of a test (1 – β) represents the probability of correctly rejecting a false null hypothesis.

Example : If a drug is effective (truth), but a clinical trial incorrectly concludes that it is not effective (based on the sample data), then a Type II error has occurred.

Balancing the Errors :

In practice, there’s a trade-off between Type I and Type II errors. Reducing the risk of one typically increases the risk of the other. For example, if you want to decrease the probability of a Type I error (by setting a lower significance level), you might increase the probability of a Type II error unless you compensate by collecting more data or making other adjustments.

It’s essential to understand the consequences of both types of errors in any given context. In some situations, a Type I error might be more severe, while in others, a Type II error might be of greater concern. This understanding guides researchers in designing their experiments and choosing appropriate significance levels.

2.3. Calculate a test statistic and P-Value

Test statistic : A test statistic is a single number that helps us understand how far our sample data is from what we’d expect under a null hypothesis (a basic assumption we’re trying to test against). Generally, the larger the test statistic, the more evidence we have against our null hypothesis. It helps us decide whether the differences we observe in our data are due to random chance or if there’s an actual effect.

P-value : The P-value tells us how likely we would get our observed results (or something more extreme) if the null hypothesis were true. It’s a value between 0 and 1. – A smaller P-value (typically below 0.05) means that the observation is rare under the null hypothesis, so we might reject the null hypothesis. – A larger P-value suggests that what we observed could easily happen by random chance, so we might not reject the null hypothesis.

2.4. Make a Decision

Relationship between $α$ and P-Value

When conducting a hypothesis test:

We then calculate the p-value from our sample data and the test statistic.

Finally, we compare the p-value to our chosen $α$:

• If $p−value≤α$: We reject the null hypothesis in favor of the alternative hypothesis. The result is said to be statistically significant.
• If $p−value>α$: We fail to reject the null hypothesis. There isn’t enough statistical evidence to support the alternative hypothesis.

3. Example : Testing a new drug.

Imagine we are investigating whether a new drug is effective at treating headaches faster than drug B.

Setting Up the Experiment : You gather 100 people who suffer from headaches. Half of them (50 people) are given the new drug (let’s call this the ‘Drug Group’), and the other half are given a sugar pill, which doesn’t contain any medication.

• Set up Hypotheses : Before starting, you make a prediction:
• Null Hypothesis (H0): The new drug has no effect. Any difference in healing time between the two groups is just due to random chance.
• Alternative Hypothesis (H1): The new drug does have an effect. The difference in healing time between the two groups is significant and not just by chance.

Calculate Test statistic and P-Value : After the experiment, you analyze the data. The “test statistic” is a number that helps you understand the difference between the two groups in terms of standard units.

For instance, let’s say:

• The average healing time in the Drug Group is 2 hours.
• The average healing time in the Placebo Group is 3 hours.

The test statistic helps you understand how significant this 1-hour difference is. If the groups are large and the spread of healing times in each group is small, then this difference might be significant. But if there’s a huge variation in healing times, the 1-hour difference might not be so special.

Imagine the P-value as answering this question: “If the new drug had NO real effect, what’s the probability that I’d see a difference as extreme (or more extreme) as the one I found, just by random chance?”

For instance:

• P-value of 0.01 means there’s a 1% chance that the observed difference (or a more extreme difference) would occur if the drug had no effect. That’s pretty rare, so we might consider the drug effective.
• P-value of 0.5 means there’s a 50% chance you’d see this difference just by chance. That’s pretty high, so we might not be convinced the drug is doing much.
• If the P-value is less than ($α$) 0.05: the results are “statistically significant,” and they might reject the null hypothesis , believing the new drug has an effect.
• If the P-value is greater than ($α$) 0.05: the results are not statistically significant, and they don’t reject the null hypothesis , remaining unsure if the drug has a genuine effect.

4. Example in python

For simplicity, let’s say we’re using a t-test (common for comparing means). Let’s dive into Python:

Making a Decision : “The results are statistically significant! p-value < 0.05 , The drug seems to have an effect!” If not, we’d say, “Looks like the drug isn’t as miraculous as we thought.”

5. Conclusion

Hypothesis testing is an indispensable tool in data science, allowing us to make data-driven decisions with confidence. By understanding its principles, conducting tests properly, and considering real-world applications, you can harness the power of hypothesis testing to unlock valuable insights from your data.

More Articles

Correlation – connecting the dots, the role of correlation in data analysis, sampling and sampling distributions – a comprehensive guide on sampling and sampling distributions, law of large numbers – a deep dive into the world of statistics, central limit theorem – a deep dive into central limit theorem and its significance in statistics, skewness and kurtosis – peaks and tails, understanding data through skewness and kurtosis”, similar articles, complete introduction to linear regression in r, how to implement common statistical significance tests and find the p value, logistic regression – a complete tutorial with examples in r.

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Unit 12: Significance tests (hypothesis testing)

About this unit.

Significance tests give us a formal process for using sample data to evaluate the likelihood of some claim about a population value. Learn how to conduct significance tests and calculate p-values to see how likely a sample result is to occur by random chance. You'll also see how we use p-values to make conclusions about hypotheses.

The idea of significance tests

• Simple hypothesis testing (Opens a modal)
• Idea behind hypothesis testing (Opens a modal)
• Examples of null and alternative hypotheses (Opens a modal)
• P-values and significance tests (Opens a modal)
• Comparing P-values to different significance levels (Opens a modal)
• Estimating a P-value from a simulation (Opens a modal)
• Using P-values to make conclusions (Opens a modal)
• Simple hypothesis testing Get 3 of 4 questions to level up!
• Writing null and alternative hypotheses Get 3 of 4 questions to level up!
• Estimating P-values from simulations Get 3 of 4 questions to level up!

Error probabilities and power

• Introduction to Type I and Type II errors (Opens a modal)
• Type 1 errors (Opens a modal)
• Examples identifying Type I and Type II errors (Opens a modal)
• Introduction to power in significance tests (Opens a modal)
• Examples thinking about power in significance tests (Opens a modal)
• Consequences of errors and significance (Opens a modal)
• Type I vs Type II error Get 3 of 4 questions to level up!
• Error probabilities and power Get 3 of 4 questions to level up!

Tests about a population proportion

• Constructing hypotheses for a significance test about a proportion (Opens a modal)
• Conditions for a z test about a proportion (Opens a modal)
• Reference: Conditions for inference on a proportion (Opens a modal)
• Calculating a z statistic in a test about a proportion (Opens a modal)
• Calculating a P-value given a z statistic (Opens a modal)
• Making conclusions in a test about a proportion (Opens a modal)
• Writing hypotheses for a test about a proportion Get 3 of 4 questions to level up!
• Conditions for a z test about a proportion Get 3 of 4 questions to level up!
• Calculating the test statistic in a z test for a proportion Get 3 of 4 questions to level up!
• Calculating the P-value in a z test for a proportion Get 3 of 4 questions to level up!
• Making conclusions in a z test for a proportion Get 3 of 4 questions to level up!

Tests about a population mean

• Writing hypotheses for a significance test about a mean (Opens a modal)
• Conditions for a t test about a mean (Opens a modal)
• Reference: Conditions for inference on a mean (Opens a modal)
• When to use z or t statistics in significance tests (Opens a modal)
• Example calculating t statistic for a test about a mean (Opens a modal)
• Using TI calculator for P-value from t statistic (Opens a modal)
• Using a table to estimate P-value from t statistic (Opens a modal)
• Comparing P-value from t statistic to significance level (Opens a modal)
• Free response example: Significance test for a mean (Opens a modal)
• Writing hypotheses for a test about a mean Get 3 of 4 questions to level up!
• Conditions for a t test about a mean Get 3 of 4 questions to level up!
• Calculating the test statistic in a t test for a mean Get 3 of 4 questions to level up!
• Calculating the P-value in a t test for a mean Get 3 of 4 questions to level up!
• Making conclusions in a t test for a mean Get 3 of 4 questions to level up!

More significance testing videos

• Hypothesis testing and p-values (Opens a modal)
• One-tailed and two-tailed tests (Opens a modal)
• Z-statistics vs. T-statistics (Opens a modal)
• Small sample hypothesis test (Opens a modal)
• Large sample proportion hypothesis testing (Opens a modal)

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• Fundamental Analysis

Hypothesis to Be Tested: Definition and 4 Steps for Testing with Example

What Is Hypothesis Testing?

Hypothesis testing, sometimes called significance testing, is an act in statistics whereby an analyst tests an assumption regarding a population parameter. The methodology employed by the analyst depends on the nature of the data used and the reason for the analysis.

Hypothesis testing is used to assess the plausibility of a hypothesis by using sample data. Such data may come from a larger population, or from a data-generating process. The word "population" will be used for both of these cases in the following descriptions.

Key Takeaways

• Hypothesis testing is used to assess the plausibility of a hypothesis by using sample data.
• The test provides evidence concerning the plausibility of the hypothesis, given the data.
• Statistical analysts test a hypothesis by measuring and examining a random sample of the population being analyzed.
• The four steps of hypothesis testing include stating the hypotheses, formulating an analysis plan, analyzing the sample data, and analyzing the result.

How Hypothesis Testing Works

In hypothesis testing, an  analyst  tests a statistical sample, with the goal of providing evidence on the plausibility of the null hypothesis.

Statistical analysts test a hypothesis by measuring and examining a random sample of the population being analyzed. All analysts use a random population sample to test two different hypotheses: the null hypothesis and the alternative hypothesis.

The null hypothesis is usually a hypothesis of equality between population parameters; e.g., a null hypothesis may state that the population mean return is equal to zero. The alternative hypothesis is effectively the opposite of a null hypothesis (e.g., the population mean return is not equal to zero). Thus, they are mutually exclusive , and only one can be true. However, one of the two hypotheses will always be true.

The null hypothesis is a statement about a population parameter, such as the population mean, that is assumed to be true.

4 Steps of Hypothesis Testing

All hypotheses are tested using a four-step process:

• The first step is for the analyst to state the hypotheses.
• The second step is to formulate an analysis plan, which outlines how the data will be evaluated.
• The third step is to carry out the plan and analyze the sample data.
• The final step is to analyze the results and either reject the null hypothesis, or state that the null hypothesis is plausible, given the data.

Real-World Example of Hypothesis Testing

If, for example, a person wants to test that a penny has exactly a 50% chance of landing on heads, the null hypothesis would be that 50% is correct, and the alternative hypothesis would be that 50% is not correct.

Mathematically, the null hypothesis would be represented as Ho: P = 0.5. The alternative hypothesis would be denoted as "Ha" and be identical to the null hypothesis, except with the equal sign struck-through, meaning that it does not equal 50%.

A random sample of 100 coin flips is taken, and the null hypothesis is then tested. If it is found that the 100 coin flips were distributed as 40 heads and 60 tails, the analyst would assume that a penny does not have a 50% chance of landing on heads and would reject the null hypothesis and accept the alternative hypothesis.

If, on the other hand, there were 48 heads and 52 tails, then it is plausible that the coin could be fair and still produce such a result. In cases such as this where the null hypothesis is "accepted," the analyst states that the difference between the expected results (50 heads and 50 tails) and the observed results (48 heads and 52 tails) is "explainable by chance alone."

Some staticians attribute the first hypothesis tests to satirical writer John Arbuthnot in 1710, who studied male and female births in England after observing that in nearly every year, male births exceeded female births by a slight proportion. Arbuthnot calculated that the probability of this happening by chance was small, and therefore it was due to “divine providence.”

What is Hypothesis Testing?

Hypothesis testing refers to a process used by analysts to assess the plausibility of a hypothesis by using sample data. In hypothesis testing, statisticians formulate two hypotheses: the null hypothesis and the alternative hypothesis. A null hypothesis determines there is no difference between two groups or conditions, while the alternative hypothesis determines that there is a difference. Researchers evaluate the statistical significance of the test based on the probability that the null hypothesis is true.

What are the Four Key Steps Involved in Hypothesis Testing?

Hypothesis testing begins with an analyst stating two hypotheses, with only one that can be right. The analyst then formulates an analysis plan, which outlines how the data will be evaluated. Next, they move to the testing phase and analyze the sample data. Finally, the analyst analyzes the results and either rejects the null hypothesis or states that the null hypothesis is plausible, given the data.

What are the Benefits of Hypothesis Testing?

Hypothesis testing helps assess the accuracy of new ideas or theories by testing them against data. This allows researchers to determine whether the evidence supports their hypothesis, helping to avoid false claims and conclusions. Hypothesis testing also provides a framework for decision-making based on data rather than personal opinions or biases. By relying on statistical analysis, hypothesis testing helps to reduce the effects of chance and confounding variables, providing a robust framework for making informed conclusions.

What are the Limitations of Hypothesis Testing?

Hypothesis testing relies exclusively on data and doesn’t provide a comprehensive understanding of the subject being studied. Additionally, the accuracy of the results depends on the quality of the available data and the statistical methods used. Inaccurate data or inappropriate hypothesis formulation may lead to incorrect conclusions or failed tests. Hypothesis testing can also lead to errors, such as analysts either accepting or rejecting a null hypothesis when they shouldn’t have. These errors may result in false conclusions or missed opportunities to identify significant patterns or relationships in the data.

The Bottom Line

Hypothesis testing refers to a statistical process that helps researchers and/or analysts determine the reliability of a study. By using a well-formulated hypothesis and set of statistical tests, individuals or businesses can make inferences about the population that they are studying and draw conclusions based on the data presented. There are different types of hypothesis testing, each with their own set of rules and procedures. However, all hypothesis testing methods have the same four step process, which includes stating the hypotheses, formulating an analysis plan, analyzing the sample data, and analyzing the result. Hypothesis testing plays a vital part of the scientific process, helping to test assumptions and make better data-based decisions.

Sage. " Introduction to Hypothesis Testing. " Page 4.

Elder Research. " Who Invented the Null Hypothesis? "

Formplus. " Hypothesis Testing: Definition, Uses, Limitations and Examples. "

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7.1: Logic and Purpose of Hypothesis Testing

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• Page ID 7113

• Foster et al.
• University of Missouri-St. Louis, Rice University, & University of Houston, Downtown Campus via University of Missouri’s Affordable and Open Access Educational Resources Initiative

The statistician R. Fisher explained the concept of hypothesis testing with a story of a lady tasting tea. Here we will present an example based on James Bond who insisted that martinis should be shaken rather than stirred. Let's consider a hypothetical experiment to determine whether Mr. Bond can tell the difference between a shaken and a stirred martini. Suppose we gave Mr. Bond a series of 16 taste tests. In each test, we flipped a fair coin to determine whether to stir or shake the martini. Then we presented the martini to Mr. Bond and asked him to decide whether it was shaken or stirred. Let's say Mr. Bond was correct on 13 of the 16 taste tests. Does this prove that Mr. Bond has at least some ability to tell whether the martini was shaken or stirred?

This result does not prove that he does; it could be he was just lucky and guessed right 13 out of 16 times. But how plausible is the explanation that he was just lucky? To assess its plausibility, we determine the probability that someone who was just guessing would be correct 13/16 times or more. This probability can be computed to be 0.0106. This is a pretty low probability, and therefore someone would have to be very lucky to be correct 13 or more times out of 16 if they were just guessing. So either Mr. Bond was very lucky, or he can tell whether the drink was shaken or stirred. The hypothesis that he was guessing is not proven false, but considerable doubt is cast on it. Therefore, there is strong evidence that Mr. Bond can tell whether a drink was shaken or stirred.

Let's consider another example. The case study Physicians' Reactions sought to determine whether physicians spend less time with obese patients. Physicians were sampled randomly and each was shown a chart of a patient complaining of a migraine headache. They were then asked to estimate how long they would spend with the patient. The charts were identical except that for half the charts, the patient was obese and for the other half, the patient was of average weight. The chart a particular physician viewed was determined randomly. Thirty-three physicians viewed charts of average-weight patients and 38 physicians viewed charts of obese patients.

The mean time physicians reported that they would spend with obese patients was 24.7 minutes as compared to a mean of 31.4 minutes for normal-weight patients. How might this difference between means have occurred? One possibility is that physicians were influenced by the weight of the patients. On the other hand, perhaps by chance, the physicians who viewed charts of the obese patients tend to see patients for less time than the other physicians. Random assignment of charts does not ensure that the groups will be equal in all respects other than the chart they viewed. In fact, it is certain the groups differed in many ways by chance. The two groups could not have exactly the same mean age (if measured precisely enough such as in days). Perhaps a physician's age affects how long physicians see patients. There are innumerable differences between the groups that could affect how long they view patients. With this in mind, is it plausible that these chance differences are responsible for the difference in times?

To assess the plausibility of the hypothesis that the difference in mean times is due to chance, we compute the probability of getting a difference as large or larger than the observed difference (31.4 - 24.7 = 6.7 minutes) if the difference were, in fact, due solely to chance. Using methods presented in later chapters, this probability can be computed to be 0.0057. Since this is such a low probability, we have confidence that the difference in times is due to the patient's weight and is not due to chance.