Hypothesis Testing
Explore the concept of hypothesis testing and its use cases.
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Important concepts and terms
Hypothesis testing is a statistical technique used to make inferences about a population based on a data sample. In hypothesis testing, we use sample data to test a claim about a population. The claim, also known as the null hypothesis (), is compared against an alternative hypothesis (). By applying statistical methods, we decide whether to accept or reject the null hypothesis based on the evidence from the sample.
The null hypothesis always assumes that the effect of the independent variables on the dependent variables is insignificant. Our significance tests always seek answers to this question: “What would be the extreme probability if the null hypothesis were true?”
In short, we try to find if the current situation is too extreme for our null hypothesis.
Let’s explain some terms used in hypothesis ...