Question

What is a hypothesis and discuss what you believe to be the most critical element in the procedure for testing a hypothesis?

Answer 1

Hypothesis refers to the assumption taken up about a statement that needs to be tested using statistical methods. It will be of two types. The first is null hypothesis that says that there is no significant difference in the standard statement and the second is alternative hypothesis that says that there is a significant difference.
For example, if a bike manufacturer test 50 bikes and find the average mileage to be 70 KM/lt., but in reality there is a mileage of 80 KM/lt.

Here,
Null hypothesis (µo)   : Mileage = 70KM / lt.
Alternative Hypothesis (µ1)   : Mileage ≠ 70KM / lt.

It is the confidence level or significant level of the hypothesis test that is most important. With an increase in confidence level (such as 95% or 97.5), the testing becomes more stringent and it affects the result whether the observation is statistically significant or insignificant. So, it is very important to consider the suitable confidence level to get the optimum result.