INFERENCE - Critical Values, Hypothesis Testing, and Confidence Intervals

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Last updated 5:10 PM on 4/20/26
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4 Terms

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What is the Critical Value method?

Compares the boundaries of corresponding t-statistics along the axis

P-value = area beyond tobs

alpha = 5%

Area of boundary = Quantiles of a t distribution cutting an area of 5% beyond them

use qt function

<p>Compares the boundaries of corresponding t-statistics along the axis </p><p>P-value = area beyond tobs</p><p>alpha = 5%</p><p>Area of boundary = Quantiles of a t distribution cutting an area of 5% beyond them </p><p>use qt function </p>
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When do you accept / reject hypothesis?

REJECT the null when observed statistic is ≤ the lower critical value OR its ≥ the upper critical value

Why?

  • tobs > upper critical value = falls in area of low probability

  • tobs < lower critical value = falls in area of low probability

<p>REJECT the null when observed statistic is ≤ the lower critical value OR its ≥ the upper critical value</p><p>Why?</p><ul><li><p>tobs &gt; upper critical value = falls in area of low probability</p></li><li><p>tobs &lt; lower critical value = falls in area of low probability </p></li></ul><p></p>
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