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Understanding Hypothesis Testing

Hypothesis testing is a fundamental statistical method employed in various fields, including data science , machine learning , and statistics , to make informed decisions based on empirical evidence. It involves formulating assumptions about population parameters using sample statistics and rigorously evaluating these assumptions against collected data. At its core, hypothesis testing is a systematic approach that allows researchers to assess the validity of a statistical claim about an unknown population parameter. This article sheds light on the significance of hypothesis testing and the critical steps involved in the process.

Table of Content

What is Hypothesis Testing?

Why do we use hypothesis testing, one-tailed and two-tailed test, what are type 1 and type 2 errors in hypothesis testing, how does hypothesis testing work, real life examples of hypothesis testing, limitations of hypothesis testing.

A hypothesis is an assumption or idea, specifically a statistical claim about an unknown population parameter. For example, a judge assumes a person is innocent and verifies this by reviewing evidence and hearing testimony before reaching a verdict.

Hypothesis testing is a statistical method that is used to make a statistical decision using experimental data. Hypothesis testing is basically an assumption that we make about a population parameter. It evaluates two mutually exclusive statements about a population to determine which statement is best supported by the sample data. 

To test the validity of the claim or assumption about the population parameter:

• A sample is drawn from the population and analyzed.
• The results of the analysis are used to decide whether the claim is true or not.

Example: You say an average height in the class is 30 or a boy is taller than a girl. All of these is an assumption that we are assuming, and we need some statistical way to prove these. We need some mathematical conclusion whatever we are assuming is true.

This structured approach to hypothesis testing in data science , hypothesis testing in machine learning , and hypothesis testing in statistics is crucial for making informed decisions based on data.

• By employing hypothesis testing in data analytics and other fields, practitioners can rigorously evaluate their assumptions and derive meaningful insights from their analyses.
• Understanding hypothesis generation and testing is also essential for effectively implementing statistical hypothesis testing in various applications.

Defining Hypotheses

• Null hypothesis (H 0 ): In statistics, the null hypothesis is a general statement or default position that there is no relationship between two measured cases or no relationship among groups. In other words, it is a basic assumption or made based on the problem knowledge. Example : A company’s mean production is 50 units/per da H 0 : [Tex]\mu [/Tex] = 50.
• Alternative hypothesis (H 1 ): The alternative hypothesis is the hypothesis used in hypothesis testing that is contrary to the null hypothesis.  Example: A company’s production is not equal to 50 units/per day i.e. H 1 : [Tex]\mu [/Tex] [Tex]\ne [/Tex] 50.

Key Terms of Hypothesis Testing

• Level of significance : It refers to the degree of significance in which we accept or reject the null hypothesis. 100% accuracy is not possible for accepting a hypothesis, so we, therefore, select a level of significance that is usually 5%. This is normally denoted with  [Tex]\alpha[/Tex] and generally, it is 0.05 or 5%, which means your output should be 95% confident to give a similar kind of result in each sample.
• P-value: The P value , or calculated probability, is the probability of finding the observed/extreme results when the null hypothesis(H0) of a study-given problem is true. If your P-value is less than the chosen significance level then you reject the null hypothesis i.e. accept that your sample claims to support the alternative hypothesis.
• Test Statistic: The test statistic is a numerical value calculated from sample data during a hypothesis test, used to determine whether to reject the null hypothesis. It is compared to a critical value or p-value to make decisions about the statistical significance of the observed results.
• Critical value : The critical value in statistics is a threshold or cutoff point used to determine whether to reject the null hypothesis in a hypothesis test.
• Degrees of freedom: Degrees of freedom are associated with the variability or freedom one has in estimating a parameter. The degrees of freedom are related to the sample size and determine the shape.

Hypothesis testing is an important procedure in statistics. Hypothesis testing evaluates two mutually exclusive population statements to determine which statement is most supported by sample data. When we say that the findings are statistically significant, thanks to hypothesis testing.

Understanding hypothesis testing in statistics is essential for data scientists and machine learning practitioners, as it provides a structured framework for statistical hypothesis generation and testing. This methodology can also be applied in hypothesis testing in Python , enabling data analysts to perform robust statistical analyses efficiently. By employing techniques such as multiple hypothesis testing in machine learning , researchers can ensure more reliable results and avoid potential pitfalls associated with drawing conclusions from statistical tests. 

One tailed test focuses on one direction, either greater than or less than a specified value. We use a one-tailed test when there is a clear directional expectation based on prior knowledge or theory. The critical region is located on only one side of the distribution curve. If the sample falls into this critical region, the null hypothesis is rejected in favor of the alternative hypothesis.

One-Tailed Test

There are two types of one-tailed test:

• Left-Tailed (Left-Sided) Test: The alternative hypothesis asserts that the true parameter value is less than the null hypothesis. Example: H 0 ​: [Tex]\mu \geq 50 [/Tex] and H 1 : [Tex]\mu < 50 [/Tex]
• Right-Tailed (Right-Sided) Test : The alternative hypothesis asserts that the true parameter value is greater than the null hypothesis. Example: H 0 : [Tex]\mu \leq50 [/Tex] and H 1 : [Tex]\mu > 50 [/Tex]

Two-Tailed Test

A two-tailed test considers both directions, greater than and less than a specified value.We use a two-tailed test when there is no specific directional expectation, and want to detect any significant difference.

Example: H 0 : [Tex]\mu = [/Tex] 50 and H 1 : [Tex]\mu \neq 50 [/Tex]

To delve deeper into differences into both types of test: Refer to link

In hypothesis testing, Type I and Type II errors are two possible errors that researchers can make when drawing conclusions about a population based on a sample of data. These errors are associated with the decisions made regarding the null hypothesis and the alternative hypothesis.

• Type I error: When we reject the null hypothesis, although that hypothesis was true. Type I error is denoted by alpha( [Tex]\alpha [/Tex] ).
• Type II errors : When we accept the null hypothesis, but it is false. Type II errors are denoted by beta( [Tex]\beta [/Tex] ).

Step 1: Define Null and Alternative Hypothesis

State the null hypothesis ( [Tex]H_0 [/Tex] ), representing no effect, and the alternative hypothesis ( [Tex]H_1 [/Tex] ​), suggesting an effect or difference.

We first identify the problem about which we want to make an assumption keeping in mind that our assumption should be contradictory to one another, assuming Normally distributed data.

Step 2 – Choose significance level

Select a significance level ( [Tex]\alpha [/Tex] ), typically 0.05, to determine the threshold for rejecting the null hypothesis. It provides validity to our hypothesis test, ensuring that we have sufficient data to back up our claims. Usually, we determine our significance level beforehand of the test. The p-value is the criterion used to calculate our significance value.

Step 3 – Collect and Analyze data.

Gather relevant data through observation or experimentation. Analyze the data using appropriate statistical methods to obtain a test statistic.

Step 4-Calculate Test Statistic

The data for the tests are evaluated in this step we look for various scores based on the characteristics of data. The choice of the test statistic depends on the type of hypothesis test being conducted.

There are various hypothesis tests, each appropriate for various goal to calculate our test. This could be a Z-test , Chi-square , T-test , and so on.

• Z-test : If population means and standard deviations are known. Z-statistic is commonly used.
• t-test : If population standard deviations are unknown. and sample size is small than t-test statistic is more appropriate.
• Chi-square test : Chi-square test is used for categorical data or for testing independence in contingency tables
• F-test : F-test is often used in analysis of variance (ANOVA) to compare variances or test the equality of means across multiple groups.

We have a smaller dataset, So, T-test is more appropriate to test our hypothesis.

T-statistic is a measure of the difference between the means of two groups relative to the variability within each group. It is calculated as the difference between the sample means divided by the standard error of the difference. It is also known as the t-value or t-score.

Step 5 – Comparing Test Statistic:

In this stage, we decide where we should accept the null hypothesis or reject the null hypothesis. There are two ways to decide where we should accept or reject the null hypothesis.

Method A: Using Crtical values

Comparing the test statistic and tabulated critical value we have,

• If Test Statistic>Critical Value: Reject the null hypothesis.
• If Test Statistic≤Critical Value: Fail to reject the null hypothesis.

Note: Critical values are predetermined threshold values that are used to make a decision in hypothesis testing. To determine critical values for hypothesis testing, we typically refer to a statistical distribution table , such as the normal distribution or t-distribution tables based on.

Method B: Using P-values

We can also come to an conclusion using the p-value,

• If the p-value is less than or equal to the significance level i.e. ( [Tex]p\leq\alpha [/Tex] ), you reject the null hypothesis. This indicates that the observed results are unlikely to have occurred by chance alone, providing evidence in favor of the alternative hypothesis.
• If the p-value is greater than the significance level i.e. ( [Tex]p\geq \alpha[/Tex] ), you fail to reject the null hypothesis. This suggests that the observed results are consistent with what would be expected under the null hypothesis.

Note : The p-value is the probability of obtaining a test statistic as extreme as, or more extreme than, the one observed in the sample, assuming the null hypothesis is true. To determine p-value for hypothesis testing, we typically refer to a statistical distribution table , such as the normal distribution or t-distribution tables based on.

Step 7- Interpret the Results

At last, we can conclude our experiment using method A or B.

Calculating test statistic

To validate our hypothesis about a population parameter we use statistical functions . We use the z-score, p-value, and level of significance(alpha) to make evidence for our hypothesis for normally distributed data .

1. Z-statistics:

When population means and standard deviations are known.

[Tex]z = \frac{\bar{x} – \mu}{\frac{\sigma}{\sqrt{n}}}[/Tex]

• [Tex]\bar{x} [/Tex] is the sample mean,
• μ represents the population mean, 
• σ is the standard deviation
• and n is the size of the sample.

2. T-Statistics

T test is used when n<30,

t-statistic calculation is given by:

[Tex]t=\frac{x̄-μ}{s/\sqrt{n}} [/Tex]

• t = t-score,
• x̄ = sample mean
• μ = population mean,
• s = standard deviation of the sample,
• n = sample size

3. Chi-Square Test

Chi-Square Test for Independence categorical Data (Non-normally distributed) using:

[Tex]\chi^2 = \sum \frac{(O_{ij} – E_{ij})^2}{E_{ij}}[/Tex]

• [Tex]O_{ij}[/Tex] is the observed frequency in cell [Tex]{ij} [/Tex]
• i,j are the rows and columns index respectively.
• [Tex]E_{ij}[/Tex] is the expected frequency in cell [Tex]{ij}[/Tex] , calculated as : [Tex]\frac{{\text{{Row total}} \times \text{{Column total}}}}{{\text{{Total observations}}}}[/Tex]

Let’s examine hypothesis testing using two real life situations,

Case A: D oes a New Drug Affect Blood Pressure?

Imagine a pharmaceutical company has developed a new drug that they believe can effectively lower blood pressure in patients with hypertension. Before bringing the drug to market, they need to conduct a study to assess its impact on blood pressure.

• Before Treatment: 120, 122, 118, 130, 125, 128, 115, 121, 123, 119
• After Treatment: 115, 120, 112, 128, 122, 125, 110, 117, 119, 114

Step 1 : Define the Hypothesis

• Null Hypothesis : (H 0 )The new drug has no effect on blood pressure.
• Alternate Hypothesis : (H 1 )The new drug has an effect on blood pressure.

Step 2: Define the Significance level

Let’s consider the Significance level at 0.05, indicating rejection of the null hypothesis.

If the evidence suggests less than a 5% chance of observing the results due to random variation.

Step 3 : Compute the test statistic

Using paired T-test analyze the data to obtain a test statistic and a p-value.

The test statistic (e.g., T-statistic) is calculated based on the differences between blood pressure measurements before and after treatment.

t = m/(s/√n)

• m  = mean of the difference i.e X after, X before
• s  = standard deviation of the difference (d) i.e d i ​= X after, i ​− X before,
• n  = sample size,

then, m= -3.9, s= 1.8 and n= 10

we, calculate the , T-statistic = -9 based on the formula for paired t test

Step 4: Find the p-value

The calculated t-statistic is -9 and degrees of freedom df = 9, you can find the p-value using statistical software or a t-distribution table.

thus, p-value = 8.538051223166285e-06

Step 5: Result

• If the p-value is less than or equal to 0.05, the researchers reject the null hypothesis.
• If the p-value is greater than 0.05, they fail to reject the null hypothesis.

Conclusion: Since the p-value (8.538051223166285e-06) is less than the significance level (0.05), the researchers reject the null hypothesis. There is statistically significant evidence that the average blood pressure before and after treatment with the new drug is different.

Python Implementation of Case A

Let’s create hypothesis testing with python, where we are testing whether a new drug affects blood pressure. For this example, we will use a paired T-test. We’ll use the scipy.stats library for the T-test.

Scipy is a mathematical library in Python that is mostly used for mathematical equations and computations.

We will implement our first real life problem via python,

T-statistic (from scipy): -9.0 P-value (from scipy): 8.538051223166285e-06 T-statistic (calculated manually): -9.0 Decision: Reject the null hypothesis at alpha=0.05. Conclusion: There is statistically significant evidence that the average blood pressure before and after treatment with the new drug is different.

In the above example, given the T-statistic of approximately -9 and an extremely small p-value, the results indicate a strong case to reject the null hypothesis at a significance level of 0.05. 

• The results suggest that the new drug, treatment, or intervention has a significant effect on lowering blood pressure.
• The negative T-statistic indicates that the mean blood pressure after treatment is significantly lower than the assumed population mean before treatment.

Case B : Cholesterol level in a population

Data: A sample of 25 individuals is taken, and their cholesterol levels are measured.

Cholesterol Levels (mg/dL): 205, 198, 210, 190, 215, 205, 200, 192, 198, 205, 198, 202, 208, 200, 205, 198, 205, 210, 192, 205, 198, 205, 210, 192, 205.

Populations Mean = 200

Population Standard Deviation (σ): 5 mg/dL(given for this problem)

Step 1: Define the Hypothesis

• Null Hypothesis (H 0 ): The average cholesterol level in a population is 200 mg/dL.
• Alternate Hypothesis (H 1 ): The average cholesterol level in a population is different from 200 mg/dL.

As the direction of deviation is not given , we assume a two-tailed test, and based on a normal distribution table, the critical values for a significance level of 0.05 (two-tailed) can be calculated through the z-table and are approximately -1.96 and 1.96.

The test statistic is calculated by using the z formula Z = [Tex](203.8 – 200) / (5 \div \sqrt{25}) [/Tex] ​ and we get accordingly , Z =2.039999999999992.

Step 4: Result

Since the absolute value of the test statistic (2.04) is greater than the critical value (1.96), we reject the null hypothesis. And conclude that, there is statistically significant evidence that the average cholesterol level in the population is different from 200 mg/dL

Python Implementation of Case B

Reject the null hypothesis. There is statistically significant evidence that the average cholesterol level in the population is different from 200 mg/dL.

Although hypothesis testing is a useful technique in data science , it does not offer a comprehensive grasp of the topic being studied.

• Lack of Comprehensive Insight : Hypothesis testing in data science often focuses on specific hypotheses, which may not fully capture the complexity of the phenomena being studied.
• Dependence on Data Quality : The accuracy of hypothesis testing results relies heavily on the quality of available data. Inaccurate data can lead to incorrect conclusions, particularly in hypothesis testing in machine learning .
• Overlooking Patterns : Sole reliance on hypothesis testing can result in the omission of significant patterns or relationships in the data that are not captured by the tested hypotheses.
• Contextual Limitations : Hypothesis testing in statistics may not reflect the broader context, leading to oversimplification of results.
• Complementary Methods Needed : To gain a more holistic understanding, it’s essential to complement hypothesis testing with other analytical approaches, especially in data analytics and data mining .
• Misinterpretation Risks : Poorly formulated hypotheses or inappropriate statistical methods can lead to misinterpretation, emphasizing the need for careful consideration in hypothesis testing in Python and related analyses.
• Multiple Hypothesis Testing Challenges : Multiple hypothesis testing in machine learning poses additional challenges, as it can increase the likelihood of Type I errors, requiring adjustments to maintain validity.

Hypothesis testing is a cornerstone of statistical analysis , allowing data scientists to navigate uncertainties and draw credible inferences from sample data. By defining null and alternative hypotheses, selecting significance levels, and employing statistical tests, researchers can validate their assumptions effectively.

This article emphasizes the distinction between Type I and Type II errors, highlighting their relevance in hypothesis testing in data science and machine learning . A practical example involving a paired T-test to assess a new drug’s effect on blood pressure underscores the importance of statistical rigor in data-driven decision-making .

Ultimately, understanding hypothesis testing in statistics , alongside its applications in data mining , data analytics , and hypothesis testing in Python , enhances analytical frameworks and supports informed decision-making.

Understanding Hypothesis Testing- FAQs

What is hypothesis testing in data science.

In data science, hypothesis testing is used to validate assumptions or claims about data. It helps data scientists determine whether observed patterns are statistically significant or could have occurred by chance.

How does hypothesis testing work in machine learning?

In machine learning, hypothesis testing helps assess the effectiveness of models. For example, it can be used to compare the performance of different algorithms or to evaluate whether a new feature significantly improves a model’s accuracy.

What is hypothesis testing in ML?

Statistical method to evaluate the performance and validity of machine learning models. Tests specific hypotheses about model behavior, like whether features influence predictions or if a model generalizes well to unseen data.

What is the difference between Pytest and hypothesis in Python?

Pytest purposes general testing framework for Python code while Hypothesis is a Property-based testing framework for Python, focusing on generating test cases based on specified properties of the code.

What is the difference between hypothesis testing and data mining?

Hypothesis testing focuses on evaluating specific claims or hypotheses about a dataset, while data mining involves exploring large datasets to discover patterns, relationships, or insights without predefined hypotheses.

How is hypothesis generation used in business analytics?

In business analytics , hypothesis generation involves formulating assumptions or predictions based on available data. These hypotheses can then be tested using statistical methods to inform decision-making and strategy.

What is the significance level in hypothesis testing?

The significance level, often denoted as alpha (α), is the threshold for deciding whether to reject the null hypothesis. Common significance levels are 0.05, 0.01, and 0.10, indicating the probability of making a Type I error in statistical hypothesis testing .

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How to know when your hypothesis is validated

Emerson Taymor

March 08, 2022

A lot of executives are asking me – “how do we know when a hypothesis is validated?”I’m pleased because this means rapid experimentation is starting to make it! Even getting to the stage of caring about hypotheses being validated is a game-changer. But I understand that this question is tricky to answer. This post shares how we at Philosophie by InfoBeans validate or invalidate hypotheses.

Before you can validate anything you need to run experiments on these hypotheses. Luckily we have a whole article on that topic: How to Select the Right Experiment for Your Project

But once an experiment has been run and we have some data, how do we know if a hypothesis that we’ve prioritized has been validated or invalidated?

A key goal of early stage product validation work is to provide confidence that you are building the right thing. Each company will require different levels of confidence during these product validation cycles. So I can’t say there is a magic formula for validation – these experiments need to work within the constraints of your company culture.

Early in the product development lifecycle you will rely on smaller data sets and leverage qualitative feedback from user interviews. Naturally these data sets get bigger over time as you run multiple iterations.

The earlier you invalidate something the better, because it means you are saving time and money that would be spent building something that people may not want.

As you move from this early stage discovery work to product market fit validation, you will layer in analytics. This quantitative data shows you exactly how people are using the feature or the application. This will be the ultimate test to validate or invalidate hypotheses.

When you have low confidence in an idea and there is a high cost to build it, you don’t just want to build the thing. You want to run lower cost and faster experiments to validate the idea. Of course, this will not give you a 100% accurate answer, because people aren’t actually using the product or buying a service. But it will point you in the right direction and create a higher degree of confidence.

Typically, these experiments will rely on 5 – 10 one-on-one interviews. You could also run a landing page test where you drive some traffic to a landing page. Given the relatively low volume, we typically look at the data within intervals of 20% and then layer the feedback from the interviews along it.

40% or more away from what you expected

If you run a usability test and only 3 out of 5 or even worse 4 out of 10 people complete the task, it means your hypothesis is likely NOT validated.

However, your hypothesis may not be completely invalidated.

Instead, this could mean that your solution wasn’t the right one to solve the problem and you need to iterate on it further. Or you could decide to bench this idea and revisit it in the future.

Try looking into the raw data from the interviews. You may hear your users indicate subtly that the feature might be useful, but not necessarily in the way you initially thought.

Recently we were working with a leading health & wellness resort. We had a hypothesis that “If we allow guests to mark activities they are interested in, we will increase the number of services they book”. When we interviewed guests with a prototype we got a mixed bag of reactions.

Looking at the specific interview notes, there was confusion about both the feature’s interface and how the content such as activities and services was organized. So we continued to explore other potential solutions.

Within 20% of what you expected

Now is where it gets fun! Let’s say 4 of the 5 people you interviewed easily completed the task you hoped they would. This might be enough to validate the hypothesis at this stage.

Again, look at the qualitative feedback to see if there are more clues. It can also be valuable to compare how impactful your feature is to the business or the level of effort it will take to build. If it is super impactful or if it is relatively trivial to build, then you can consider validating it.

Some hypotheses may not require every one of your test users to complete the tasks. This is where the qualitative data is again important, because you want to hear what users who don’t like the feature are saying. In this case, you want to make sure you are not impacting the brand negatively.

For example, we worked with a top 3 media company to figure out how to increase the number of people opting in to data tracking. We wanted to accomplish this in a way that would increase trust with the brand.

The existing baseline analytics of opt-in was low, so we never planned to create a solution that had a 100% opt-in rate. As we tested our prototypes we wanted to hear people express interest or indicate that they trusted the brand. We wanted to make sure we didn’t get any negative feedback like “this scares me because….”

After additional iteration and an internal discussion, we felt like we had enough to get more real data if people would actually opt-in via an A/B test. The small sample size data was validated and we increased opt-ins by 30%. This work was promoted to production and eventually rolled out to their other properties.

Likewise, with a top 3 Credit Card company we attempted to validate a concept around people sharing their credit card to their friends through a SMS-based chatbot experience. One specific thing we wanted to validate was how we might pre-approve someone for a credit card. And what was the best way to collect this information – that included their social security number – to run a basic credit check.

It’s unlikely that every single person that comes through a text-based credit card application is going to finish this process with their SSN. But we were still able to get clarity on different methods and why they would work or wouldn’t work.

Other times, hypotheses in this zone need to be further experimented and tested. You can add a similar prototype to the next experiment that you run to see if more data comes in that shifts your opinion one way or another.

Exceeds your target

When you run an experiment and you get resounding feedback and evidence that your interviewees are loving what you created, that means your hypothesis is likely validated.

With the health & wellness brand we referenced before, we had a hypothesis that “If guests can see when they have time in their schedule, they will be more likely to book more services.” When the guests saw our prototype, their eyes lit up. They wanted a way to easily find activities and services that were happening based on a time they were free. The user experience we created and the approach we took resonated strongly with our interviewees.

When you eventually launch, there is still a chance these hypotheses may be invalidated. However, this is generally good news and it’s still worth progressing your hypothesis to the next step.

Moving Beyond Discovery

As you build confidence in the early stages, you can move to quantitative experiments. This could involve running an A/B test on your product with a certain feature and without, or building the feature and watching how users actually use the product through analytics or screen recordings like Hotjar.

If the work you are doing is to update or improve an existing product, then you can look to the baselines already established. For example, what is the conversion rate or how much revenue does each user spend? Using these baselines as a benchmark, you can then set your validation criteria based on the improvement you hope to achieve.

If you don’t have any existing baseline data, look at standards from your industry or come up with metrics as a team. Then make sure that your application is actually recording the analytics that you need to validate your hypothesis.

When we worked with We Work to create a sales tool, we heard a lot of great ideas in the user interviews. One thing that came up with a couple sales reps was a desire to easily find and view case studies. Even better, they said they wanted them in AR so they could truly experience the space.

We built a quick and dirty version of this feature into the application, including AR case studies from a partner that they already had. But when we examined how the sales reps actually used the application during pitches, we found they almost never navigated to the case studies! Instead they spent most of their time on the virtual floor plans we created. This indicated we should spend more time building out functionality around these floor plans instead of the virtual case studies.

On the other hand, while working with a major skincare company, we prototyped and tested multiple features. One of these features was a mini quiz to find the right skincare solution. In our early usability tests we saw that the quiz tested well. This feature was also aligned with the organization’s new brand vision. We then promoted this to a production A/B test against their existing homepage. We found two things:

1) People actually completed the quiz – something that some stakeholders were concerned about

2) Conversion rate increased against our control homepage – success!

As you validate or invalidate these hypotheses, make sure to update your Experiment Dashboard . And remember, learning never ends. Always look to update hypotheses as you go and learn more – just because you validated something in a previous cycle doesn’t mean that you can’t still improve it.

Does your team believe that a big impact could be made to the business by improving a feature? If so, continue to iterate on the feature. But if you don’t think a big impact could be made or the cost to iterate would exceed the impact, then hold off on it and look at other initiatives. Consider what investment makes sense and when to focus on new priorities to find the right balance.

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• Hypothesis Testing: Definition, Uses, Limitations + Examples

Hypothesis testing is as old as the scientific method and is at the heart of the research process. 

Research exists to validate or disprove assumptions about various phenomena. The process of validation involves testing and it is in this context that we will explore hypothesis testing. 

What is a Hypothesis? 

A hypothesis is a calculated prediction or assumption about a population parameter based on limited evidence. The whole idea behind hypothesis formulation is testing—this means the researcher subjects his or her calculated assumption to a series of evaluations to know whether they are true or false. 

Typically, every research starts with a hypothesis—the investigator makes a claim and experiments to prove that this claim is true or false . For instance, if you predict that students who drink milk before class perform better than those who don’t, then this becomes a hypothesis that can be confirmed or refuted using an experiment.  

Read: What is Empirical Research Study? [Examples & Method]

What are the Types of Hypotheses? 

1. simple hypothesis.

Also known as a basic hypothesis, a simple hypothesis suggests that an independent variable is responsible for a corresponding dependent variable. In other words, an occurrence of the independent variable inevitably leads to an occurrence of the dependent variable. 

Typically, simple hypotheses are considered as generally true, and they establish a causal relationship between two variables. 

Examples of Simple Hypothesis  

• Drinking soda and other sugary drinks can cause obesity. 
• Smoking cigarettes daily leads to lung cancer.

2. Complex Hypothesis

A complex hypothesis is also known as a modal. It accounts for the causal relationship between two independent variables and the resulting dependent variables. This means that the combination of the independent variables leads to the occurrence of the dependent variables . 

Examples of Complex Hypotheses  

• Adults who do not smoke and drink are less likely to develop liver-related conditions.
• Global warming causes icebergs to melt which in turn causes major changes in weather patterns.

3. Null Hypothesis

As the name suggests, a null hypothesis is formed when a researcher suspects that there’s no relationship between the variables in an observation. In this case, the purpose of the research is to approve or disapprove this assumption. 

Examples of Null Hypothesis

• This is no significant change in a student’s performance if they drink coffee or tea before classes. 
• There’s no significant change in the growth of a plant if one uses distilled water only or vitamin-rich water. 

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4. Alternative Hypothesis 

To disapprove a null hypothesis, the researcher has to come up with an opposite assumption—this assumption is known as the alternative hypothesis. This means if the null hypothesis says that A is false, the alternative hypothesis assumes that A is true. 

An alternative hypothesis can be directional or non-directional depending on the direction of the difference. A directional alternative hypothesis specifies the direction of the tested relationship, stating that one variable is predicted to be larger or smaller than the null value while a non-directional hypothesis only validates the existence of a difference without stating its direction. 

Examples of Alternative Hypotheses  

• Starting your day with a cup of tea instead of a cup of coffee can make you more alert in the morning. 
• The growth of a plant improves significantly when it receives distilled water instead of vitamin-rich water. 

5. Logical Hypothesis

Logical hypotheses are some of the most common types of calculated assumptions in systematic investigations. It is an attempt to use your reasoning to connect different pieces in research and build a theory using little evidence. In this case, the researcher uses any data available to him, to form a plausible assumption that can be tested. 

Examples of Logical Hypothesis

• Waking up early helps you to have a more productive day. 
• Beings from Mars would not be able to breathe the air in the atmosphere of the Earth. 

6. Empirical Hypothesis  

After forming a logical hypothesis, the next step is to create an empirical or working hypothesis. At this stage, your logical hypothesis undergoes systematic testing to prove or disprove the assumption. An empirical hypothesis is subject to several variables that can trigger changes and lead to specific outcomes. 

Examples of Empirical Testing 

• People who eat more fish run faster than people who eat meat.
• Women taking vitamin E grow hair faster than those taking vitamin K.

7. Statistical Hypothesis

When forming a statistical hypothesis, the researcher examines the portion of a population of interest and makes a calculated assumption based on the data from this sample. A statistical hypothesis is most common with systematic investigations involving a large target audience. Here, it’s impossible to collect responses from every member of the population so you have to depend on data from your sample and extrapolate the results to the wider population. 

Examples of Statistical Hypothesis  

• 45% of students in Louisiana have middle-income parents. 
• 80% of the UK’s population gets a divorce because of irreconcilable differences.

What is Hypothesis Testing? 

Hypothesis testing is an assessment method that allows researchers to determine the plausibility of a hypothesis. It involves testing an assumption about a specific population parameter to know whether it’s true or false. These population parameters include variance, standard deviation, and median. 

Typically, hypothesis testing starts with developing a null hypothesis and then performing several tests that support or reject the null hypothesis. The researcher uses test statistics to compare the association or relationship between two or more variables. 

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Researchers also use hypothesis testing to calculate the coefficient of variation and determine if the regression relationship and the correlation coefficient are statistically significant.

How Hypothesis Testing Works

The basis of hypothesis testing is to examine and analyze the null hypothesis and alternative hypothesis to know which one is the most plausible assumption. Since both assumptions are mutually exclusive, only one can be true. In other words, the occurrence of a null hypothesis destroys the chances of the alternative coming to life, and vice-versa. 

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What Are The Stages of Hypothesis Testing?  

To successfully confirm or refute an assumption, the researcher goes through five (5) stages of hypothesis testing; 

• Determine the null hypothesis
• Specify the alternative hypothesis
• Set the significance level
• Calculate the test statistics and corresponding P-value
• Draw your conclusion
• Determine the Null Hypothesis

Like we mentioned earlier, hypothesis testing starts with creating a null hypothesis which stands as an assumption that a certain statement is false or implausible. For example, the null hypothesis (H0) could suggest that different subgroups in the research population react to a variable in the same way. 

• Specify the Alternative Hypothesis

Once you know the variables for the null hypothesis, the next step is to determine the alternative hypothesis. The alternative hypothesis counters the null assumption by suggesting the statement or assertion is true. Depending on the purpose of your research, the alternative hypothesis can be one-sided or two-sided. 

Using the example we established earlier, the alternative hypothesis may argue that the different sub-groups react differently to the same variable based on several internal and external factors. 

• Set the Significance Level

Many researchers create a 5% allowance for accepting the value of an alternative hypothesis, even if the value is untrue. This means that there is a 0.05 chance that one would go with the value of the alternative hypothesis, despite the truth of the null hypothesis. 

Something to note here is that the smaller the significance level, the greater the burden of proof needed to reject the null hypothesis and support the alternative hypothesis.

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• Calculate the Test Statistics and Corresponding P-Value 

Test statistics in hypothesis testing allow you to compare different groups between variables while the p-value accounts for the probability of obtaining sample statistics if your null hypothesis is true. In this case, your test statistics can be the mean, median and similar parameters. 

If your p-value is 0.65, for example, then it means that the variable in your hypothesis will happen 65 in100 times by pure chance. Use this formula to determine the p-value for your data: 

• Draw Your Conclusions

After conducting a series of tests, you should be able to agree or refute the hypothesis based on feedback and insights from your sample data.  

Applications of Hypothesis Testing in Research

Hypothesis testing isn’t only confined to numbers and calculations; it also has several real-life applications in business, manufacturing, advertising, and medicine. 

In a factory or other manufacturing plants, hypothesis testing is an important part of quality and production control before the final products are approved and sent out to the consumer. 

During ideation and strategy development, C-level executives use hypothesis testing to evaluate their theories and assumptions before any form of implementation. For example, they could leverage hypothesis testing to determine whether or not some new advertising campaign, marketing technique, etc. causes increased sales. 

In addition, hypothesis testing is used during clinical trials to prove the efficacy of a drug or new medical method before its approval for widespread human usage. 

What is an Example of Hypothesis Testing?

An employer claims that her workers are of above-average intelligence. She takes a random sample of 20 of them and gets the following results: 

Mean IQ Scores: 110

Standard Deviation: 15 

Mean Population IQ: 100

Step 1: Using the value of the mean population IQ, we establish the null hypothesis as 100.

Step 2: State that the alternative hypothesis is greater than 100.

Step 3: State the alpha level as 0.05 or 5% 

Step 4: Find the rejection region area (given by your alpha level above) from the z-table. An area of .05 is equal to a z-score of 1.645.

Step 5: Calculate the test statistics using this formula

Z = (110–100) ÷ (15÷√20) 

10 ÷ 3.35 = 2.99 

If the value of the test statistics is higher than the value of the rejection region, then you should reject the null hypothesis. If it is less, then you cannot reject the null. 

In this case, 2.99 > 1.645 so we reject the null. 

Importance/Benefits of Hypothesis Testing 

The most significant benefit of hypothesis testing is it allows you to evaluate the strength of your claim or assumption before implementing it in your data set. Also, hypothesis testing is the only valid method to prove that something “is or is not”. Other benefits include: 

• Hypothesis testing provides a reliable framework for making any data decisions for your population of interest. 
• It helps the researcher to successfully extrapolate data from the sample to the larger population. 
• Hypothesis testing allows the researcher to determine whether the data from the sample is statistically significant. 
• Hypothesis testing is one of the most important processes for measuring the validity and reliability of outcomes in any systematic investigation. 
• It helps to provide links to the underlying theory and specific research questions.

Criticism and Limitations of Hypothesis Testing

Several limitations of hypothesis testing can affect the quality of data you get from this process. Some of these limitations include: 

• The interpretation of a p-value for observation depends on the stopping rule and definition of multiple comparisons. This makes it difficult to calculate since the stopping rule is subject to numerous interpretations, plus “multiple comparisons” are unavoidably ambiguous. 
• Conceptual issues often arise in hypothesis testing, especially if the researcher merges Fisher and Neyman-Pearson’s methods which are conceptually distinct. 
• In an attempt to focus on the statistical significance of the data, the researcher might ignore the estimation and confirmation by repeated experiments.
• Hypothesis testing can trigger publication bias, especially when it requires statistical significance as a criterion for publication.
• When used to detect whether a difference exists between groups, hypothesis testing can trigger absurd assumptions that affect the reliability of your observation.

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