1. Copyright © Texas Education Agency, 2012. All rights reserved. The Null-Hypothesis Statistics & Risk Management Copyright © Texas Education Agency, 2012. All rights reserved. 1

2. 2 “Copyright and Terms of Service Copyright © Texas Education Agency. The materials found on this website are copyrighted © and trademarked ™ as the property of the Texas Education Agency and may not be reproduced without the express written permission of the Texas Education Agency, except under the following conditions: 1)Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts’ and schools’ educational use without obtaining permission from the Texas Education Agency; 2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only without obtaining written permission of the Texas Education Agency; 3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way; 4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from the Texas Education Agency and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty fee. Call TEA Copyrights with any questions you have.

3. Copyright © Texas Education Agency, 2012. All rights reserved. The Null-Hypothesis To prove a research hypothesis as true you must disprove it’s corresponding null- hypothesis. To prove a research hypothesis as true you must disprove it’s corresponding null- hypothesis. Why….It is easier to (for sure) disprove something verses proving it is true all the time. Why….It is easier to (for sure) disprove something verses proving it is true all the time. However….You are not really proving a hypothesis as true….Just not false…so far. However….You are not really proving a hypothesis as true….Just not false…so far. 3

4. Copyright © Texas Education Agency, 2012. All rights reserved. The Null-Hypothesis As gas prices rise consumption of gas will not significantly drop. As gas prices rise consumption of gas will not significantly drop. Women do not significantly prefer driving a SUV over a Pickup truck. Women do not significantly prefer driving a SUV over a Pickup truck. Bonds do not significantly provide a better “Return on Investment” (ROI) over stocks. Bonds do not significantly provide a better “Return on Investment” (ROI) over stocks. 4

5. Copyright © Texas Education Agency, 2012. All rights reserved. Common Formulas? 5

6. Copyright © Texas Education Agency, 2012. All rights reserved. How Would We Test This? Ask randomly 100 adult woman if they prefer driving an SUV or a Pickup. Ask randomly 100 adult woman if they prefer driving an SUV or a Pickup. Analyze the results to see if any difference is significant for a sample size of 100 respondents. Analyze the results to see if any difference is significant for a sample size of 100 respondents. 6

7. Copyright © Texas Education Agency, 2012. All rights reserved. Can We Make Errors? 7

8. Copyright © Texas Education Agency, 2012. All rights reserved. Create a Null-Hypothesis 8 The reason students drop out of high school is because they are failing anyway.

9. Copyright © Texas Education Agency, 2012. All rights reserved. Create a Null-Hypothesis 9 Government employees are lazy.

10. Copyright © Texas Education Agency, 2012. All rights reserved. Create a Null-Hypothesis 10 Because of the recession, university enrollment has plummeted in the last 10 years.

11. Copyright © Texas Education Agency, 2012. All rights reserved. Create a Null-Hypothesis 11 Student obesity has been on the increase for the last 10 years.