Concepts in Testing of Hypothesis

A Hypothesis is an assumption or a statement which may be true or not true. The testing of the hypothesis takes place on the basis of the information that has been obtained from a sample. The use of Hypothesis testing is widely prevalent in the business industry as it assists in decision making. There is some important terminology in hypothesis that needs to be known so as to completely understand the concept.

Null Hypothesis: Those hypotheses that have been proposed with the intention of receiving a rejection are called the null hypothesis. It means that the researcher hypotheses the opposite of what is desired to be proved.

Alternative Hypothesis:  When the null hypothesis is rejected, the alternate hypothesis has to be accepted. The rejection of the null hypothesis means that there is a relationship between the variables. The alternate hypotheses cover a large range of values.

One tailed test:  Any test can be either one tailed or two tailed. A test is put in the category of a one tailed test when the null hypothesis gets rejected and the value of the test statistic comes into a specified tail of the distribution. The test is called a two tailed test when the null hypothesis gets rejected and the statistics of the test fall in either of the two tails of the sampling distribution. There  are often the chances of errors in hypothesis testing which need to be corrected at the right time so as to avoid any major flaws in the analysis and interpretation of the data. There are usually Type I and Type II errors