Chapter Summary
A statistical hypothesis asserts that a population has a certain property. The null hypothesis H0 asserts a claim about a parameter of a population. The alternative hypothesis asserts that H0 is false. The choice of the null hypothesis typically depends on a break-even economic analysis. The effect size refers to the deviation of the sample mean from the hypothesized parameter. This situation produces a one-sided test that rejects H0 either for large or for small values of a test statistic (not both). The test statistic counts the number of standard errors between the statistic and the region specified by H0. If the standard error is known, the test statistic is a z-statistic (z-test); it is a t-statistic (or t-ratio; t-test) ...
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