ECON 120B Lecture : Top-8.docx
Document Summary
Introduction to hypothesis testing: description and definitions, hypothesis testing extends statistical inference into the realm of decision making, typically, the decision is to take action a or action b (which may simply be not a), the choice depends on the true but unknown value of some parameter of the popu lation distribution f(x) of a random variable x, for example, the fda will license a new drug if the proportion particular side effect is 0. 15. It seems simple, but there are two complications: first, is unknown and has to be estimated with sample data, second, our estimate almost certainly won"t exactly equal due to sampling error. H0: 0; h1: < 0 [ is left of: right sided alternative. H0: 0; h1: > 0 [ is right of: two sided alternative h0: = 0; h1: 0 [ to either side of. S e ( x )= s2 n( n n.
