What is a hypothesis test

A hypothesis test is used for deciding if something is statistically significant or not.You begin stating your two hypothesesH0: Null hypothesisH1: Alternative hypothesisFor example in a linear regression, your beta value can be tested for significance. Here you'd set H0 to be that B = 0 and H1 being that B does not equal zero. Prior to undertaking the test, you need to decide on a significance level. This is the level at which you should neither accept or reject your hypothesis. Part of this there are two different types of tests: One tailed: This is where the alternative hypothesis is focused one way. E.g. < / > Two tailed This is where you are testing for significance either side of the null hypothesis. For example is B not equal to zero. Beta could either be positive or negatively significant.

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