11. Hypothesis Testing

Hypothesis testing involves making decisions on a claim or statement made about the value of population parameter.

First, the claim is used to define the null $H_o$ and alternative $H_a$ hypotheses. The alternative hypothesis is used to determine if the test is left (smaller), right (greater) or two-tailed test. A test-statistic and p-value are calculated with the assumption that the null hypothesis is true. A significant level or rejection region can be used to make a decision about the null-hypothesis.