Given that hypothesis testing holds the potential to provide keen business insights, the question that immediately arises is 'how does one conducts a hypothesis test?' It is a five step process.
1. First we formulate the null hypothesis (Ho), the statement or claim that will be tested. Using our earlier widget example, the null hypothesis (Ho) would be "Productivity is low in the widget making department because morale is low" (Bushman, 2007).
2. Next we formulate the alternative hypothesis (Ha), the exact opposite of the null hypothesis. The alternative hypothesis (Ha) would be "productivity is unrelated to morale."
3. We then identify a test statistic that can be used to measure the truth of the null hypothesis (more on this shortly).
4. We determine the P-value is the probability of obtaining a test statistic at least as extreme as the one...
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