EC255 Lecture Notes - Lecture 9: Type I And Type Ii Errors, Null Hypothesis, Statistical Hypothesis Testing
Document Summary
Ec255 chapter 9: hypothesis testing for single populations. Hypothesis testing: test the validity of statements about an unknown population parameter based on a random sample. One of the most important mechanisms for decision-making. Structure problems to use statistical evidence to test theories about business phenomena. Population mean: e. g. the city-wide mean monthly cell phone bill is = . Population proportion: e. g. the proportion of students who love this course is p 0. 70. Assumed to be true: the status quo, nothing new is happening. A non-statistical example: the defendant is innocent. Opposite of h0: challenges the status quo, something new is happening, hypothesis that needs to be supported. A non-statistical example: the defendant is guilty. An accountant would like to test whether this average has increased over the years. An accountant would like to test whether this average has changed over the years. Historically, a company"s market share was no more than 18%
