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PARAMETRIC STATISTICAL INFERENCE. We are now going to test these statements Examine the likelihood (probability) that a suspected claim would occur if an existing claim were true What is the claim being challenged? What is the alternate claim?
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PARAMETRIC STATISTICAL INFERENCE We are now going to test these statements • Examine the likelihood (probability) that a suspected claim would occur if an existing claim were true • What is the claim being challenged? • What is the alternate claim? • If we get an outcome that would be unlikely if Ho were true and is in the direction suggested by Ha, we have evidence against Ho in favor of Ha. • Make “unlikely” precise by calculating the probability that an alternate (suspected) event is observed assuming Ho to be true (default or existing claim is true)
PARAMETRIC STATISTICAL INFERENCE • The probability, computed assuming Ho is true, that the observed outcome would take a value as extreme or more extreme than that actually observed is called the P-VALUE of the test. • The smaller the p-value the stronger is the evidence against Ho provided by the data. 1-SAMPLE Z STATISTIC FOR , known • the test statistic assesses the evidence against the null hypothesis by allowing the calculation of p-value • If the test statistic (Z-value) falls far from the value suggested by the null hypothesis in the direction specified by the alternative hypothesis, it is good evidence against Ho and in favor of Ha. P-value describes how strong the evidence is
