Hypothesis Testing for the mean. The general procedure. Statistics Hypothesis Testing for the mean. The general procedure.

For the construction of hypothesis tests follow the general procedure below: Write down the two hypotheses, for example Determine the appropriate test statistics and the distribution of the corresponding random variable (using the parameter value specified by ). Determine the significance level. This is probability of Type I error. Determine the acceptance and rejection regions (one or two tail tests). Draw diagrams to visualise. Consider now the case when the value of the parameter is not that specified by Ho. Determine the distribution of the random variable corresponding to the test statistics given Calculate the probability of an outcome falling in the acceptance region (given ). This is the probability of Type II error. Notes: As usual, it is sensible to avoid premature rounding during intermediate calculations. Store values on your calculator.