Statistical Hypothesis Testing

Statistical Hypothesis Testing

A statistical hypothesis test is a method of making decisions using data, whether from a controlled experiment or an observational study (not controlled). In statistics, a result is called statistically significant if it is unlikely to have occurred by chance alone, according to a pre-determined threshold probability, the significance level. The phrase "test of significance" was coined by Ronald Fisher: "Critical tests of this kind may be called tests of significance, and when such tests are available we may discover whether a second sample is or is not significantly different from the first."

These tests are used in determining what outcomes of an experiment would lead to a rejection of the null hypothesis for a pre-specified level of significance; helping to decide whether experimental results contain enough information to cast doubt on conventional wisdom. It is sometimes called confirmatory data analysis, in contrast to exploratory data analysis.

Statistical hypothesis tests answer the question Assuming that the null hypothesis is true, what is the probability of observing a value for the test statistic that is at least as extreme as the value that was actually observed?. That probability is known as the P-value.

Statistical hypothesis testing is a key technique of frequentist statistical inference. The Bayesian approach to hypothesis testing is to base rejection of the hypothesis on the posterior probability. Other approaches to reaching a decision based on data are available via decision theory and optimal decisions.

The critical region of a hypothesis test is the set of all outcomes which cause the null hypothesis to be rejected in favor of the alternative hypothesis.

Read more about Statistical Hypothesis Testing:  The Testing Process, Definition of Terms, Interpretation, Origins, Use and Importance, Education, Cautions, Controversy

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