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.
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.
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)
z = 11.11
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
Z Test
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.
T Test
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.