Hypothesis testing is the use of statistics to determine the probability that a given hypothesis is true. The goal is to see whether to accept or reject a null hypothesis.

Hypothesis testing is done by taking sample data from a larger population. This is using statistical analysis, often by the Z-score.

A null and alternative hypothesis are mutually exclusive but one of the two will always prove true.

4 Steps of Hypothesis Testing:

All hypotheses are tested using a four-step process:

The first step is for the analyst to state the two hypotheses so that only one can be right.

The next step is to formulate an analysis plan, which outlines how the data will be evaluated.

The third step is to carry out the plan and physically analyze the sample data.

The fourth and final step is to analyze the results and either reject the null hypothesis, or state that the null hypothesis is plausible, given the data.

Depending on your results, you can then accept or reject the null hypothesis.