Introduction to hypothesis testing

Summary

• We denote the null-hypothesis by \(H_0\) and the alternative hypothesis by \(H_1\) or \(H_A\) .
• If there is evidence against the null-hypothesis then we say that we reject the null hypothesis. If we have no such evidence, we say that we do not reject the null hypothesis (we never accept a null-hypothesis)
• If we reject a true hypothesis we say that we make a type I error . If we fail to reject a false hypothesis we say that we make a type II error.
• The probability of committing a type I error is denoted by \(α\) and called the level of significance .
• The probability of rejecting a false hypothesis is called the power of the test.