Steps in Hypothesis Testing (2 of 5)

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  1. The fourth step is to calculate the probability value (often called the p value). The p value is the probability of obtaining a statistic as different or more different from the parameter specified in the null hypothesis as the statistic computed from the data. The calculations are made assuming that the null hypothesis is true. (click here for a concrete example)

  2. The probability value computed in Step 4 is compared with the significance level chosen in Step 2. If the probability is less than or equal to the significance level, then the null hypothesis is rejected; if the probability is greater than the significance level then the null hypothesis is not rejected. When the null hypothesis is rejected, the outcome is said to be "statistically significant" when the null hypothesis is not rejected then the outcome is said be "not statistically significant."

  3. If the outcome is statistically significant, then the null hypothesis is rejected in favor of the alternative hypothesis. If the rejected null hypothesis were that μ1- μ2 = 0, then the alternative hypothesis would be that μ1≠ μ2. If M1 were greater than M2 then the researcher would naturally conclude that μ1 ≥ μ2. (Click here to see why you can conclude more than μ1 ≠ μ2)
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