Answer to Question #250001 in Other for Gabs

Question

1. (a) By given an appropriate intuitive example, explain the meaning of statistical decision. (b) Explain the concept of hypothesis testing and how it aids in statistical decision.

Answer 1

(a). The statistical decision is made on the basis of observations of a phenomenon that obeys probability laws.

Let's consider an example of the disinfection of water by chlorination. The amount of chlorine to be added depends on the average number of bacteria per unit volume. The statistical decision is the amount of chlorine to be added will therefore be a function of statistical estimates.

(b). Hypothesis Testing Is the practice of testing a hypothesis by comparing it with the null hypothesis. The null hypothesis is only rejected if its probability falls below a predetermined significance level, in which case the hypothesis being tested is said to have that level of significance.