Hypothesis Testing

Our general strategy is to specify a null and alternative hypothesis and then select and calculate the appropriate test statistic, which we will use to determine the p-value, i.e., the probability of finding differences this great or greater due to sampling error (chance). If the p-value is very small, it indicates a low probability of observing these difference as a result of sampling error, i.e., the null hypothesis is probably not true, so we will reject the null hypothesis and accept the alternative.

For continuous outcomes, there are three fundamental comparisons to make:

where

(There is also a procedure called analysis of variance (ANOVA) for comparing the means among more than two groups, but we will not address ANOVA in this course.)

Notice that all three of these tests generate a test statistic that takes into account: