Hypothesis Testing

Inferential statistics are used to make decisions about the population based on sample information. In order to reach statistical decisions, broad statements or hypotheses are formed about the probability distribution of the population. Hypothesis testing is the formal statistical process used to evaluate the probability or likelihood a hypothesis is true. The two major procedures for hypothesis testing are the classical approach and the probability value or p value method.

In classical or traditional hypothesis testing, four major steps are employed: (1) statement of the null and alternative hypotheses (H0 and HA); (2) determination of an analysis plan; (3) calculation of the test statistic; and (4) evaluation of the hypothesis statements. In the first step, the H0 and HA identify the parameter(s) being tested (e.g., mean, ...