Hypothesis Testing for Decision-Making
Human beings are progressive in nature. Most of our decisions in life are governed by our past experiences. These decisions may be subjective or objective. Subjective decisions are solely based upon one’s own perception of viewing issues. These perception
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Hypothesis Testing for Decision-Making
Learning Objectives After completing this chapter, you should be able to do the following: • • • • • • • • • • • •
Understand the purpose of hypothesis testing. Learn to construct the hypotheses. Know the situations for using one- and two-tailed tests. Describe the procedure of hypothesis testing. Understand the p value. Learn the computing procedure manually in different situations by using t-tests. Identify an appropriate t-test in different research situations. Know the assumptions under which t-test should be used. Describe the situations in which one-tailed and two-tailed tests should be used. Interpret the difference between one-tailed and two-tailed hypotheses. Learn to compute t-statistic in different research situations by using SPSS. Learn to interpret the outputs of different t-tests generated in SPSS.
Introduction Human beings are progressive in nature. Most of our decisions in life are governed by our past experiences. These decisions may be subjective or objective. Subjective decisions are solely based upon one’s own perception of viewing issues. These perceptions keep on changing from person to person. Same thing or situation can be perceived differently by different persons, and therefore, the decision cannot be universalized. On the other hand, if decisions are taken on the basis of scientific law, it is widely accepted and works well in the similar situations. Decision makers are always engaged in identifying optimum decision in a given situation for solving a problem. Theory of statistical inference which is based on scientific principles provide optimum solution to these decision makers. Statistical inference includes theory of estimation and testing of hypothesis. In this chapter, J.P. Verma, Data Analysis in Management with SPSS Software, DOI 10.1007/978-81-322-0786-3_6, # Springer India 2013
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6 Hypothesis Testing for Decision-Making
different aspects of hypothesis testing regarding population parameter have been discussed. At times one may be interested to know as to whether the population mean is equal to the given value. In testing such hypothesis, a representative sample may be drawn to verify it by using statistical tests. Testing of hypothesis may be done for comparing two population averages on the basis of samples drawn from these populations. For instance, one may like to know whether memory retention power is more in girls or in boys in a particular age category or whether motivation level of employees in two different units of an organization is same or not. By comparing sample means of two groups, we intend to find out whether these samples come from the same population. In other words, we try to test whether their population means are equal or not. In this chapter, procedure of hypothesis testing in comparative studies has been discussed in detail. Besides comparative studies, the researcher may be interested to see the effect of certain treatment on dependent variable. Impact of advertisement campaign on the sale of a product,
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