Margaret Mary Asst. Professor

Maharani’s Commerce & Mgt. College for

Women, Mysore

Hypothesis is considered as principal instrument

in research.

It paves the way for new experiments and

observations.

Hypothesis is tested on the basis of available

information.

It is widely used in Social Science where direct

knowledge of population is rare.

Decision can be made on the basis of sample

data.

A set of logical and statistical guidelines used to

make decisions from sample statistics to

population characteristics.

A predictive statement capable of being tested by

scientific methods

A Hypothesis is the statement or an assumption

about relationships between variables.

A Hypothesis is a tentative explanation for certain

behaviors, phenomenon or events that have

occurred or will occur

Bankers assumed high-income earners are more

profitable than low-income earners.

Old clients were more likely to diminish CD

balances by large amounts compared to younger

clients.

This was non-intrusive because conventional

wisdom suggested that older clients have a larger

portfolio of assets and seek less risky investments

Null Hypotheses &Alternate Hypotheses

Level of Significance

Critical Region

Decision Rule(Test of Hypothesis)

Type I & Type II Errors

Two Tailed & One Tailed Tests

Types of Hypothesis

• Null Hypothesis (H0)

• Alternative Hypothesis (Ha or H1)

Each of the following statements is an example of a null

hypothesis and alternative hypothesis.

Determined in advance before testing of

Hypothesis.

Maximum value of the probability of

rejecting H0 when it is true

Some percentage i.e. 1%,5%,10%

Risk of rejecting null hypothesis when it is

true.

Whether the test involves one sample or

two Samples ?

Whether two or more samples used are

independent or related?

Is the measurement scale nominal,

ordinal, interval, or ratio?

Accept H0 if the test statistic value falls

within the area of acceptance.

Reject otherwise.