Tests of Significance

Statistician applies appropriate “statistical test” to analyze the given data in order to draw conclusion. Such a conclusion or inference is called “statistical decision.” Contesting the null hypothesis (Ho) without any bias is essential. Accepting or rejecting the Ho illogically would lead to erroneous decisions. One-tailed or two-tailed tests are generally applied depending on the scope and requirement of given data. One-tailed test is applied for testing the hypothesis that one process is better than the other. These tests are applied to two sets of observations from the same subjects or two sets of observations for the same parameter from two different groups of subjects. Student’s t-distribution plays a great role in sampling. When sample size is large (n > 30), the sampling distribution is considered normal. But, when the sample size is small (n < 30), the sampling distribution may not be normal. This chapter is focused on the applications of student’s t-test for statistical decisions.