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Null Hypothesis: Definition, Rejecting & Examples

By Jim Frost 6 Comments

What is a Null Hypothesis?

The null hypothesis in statistics states that there is no difference between groups or no relationship between variables. It is one of two mutually exclusive hypotheses about a population in a hypothesis test.

• Null Hypothesis H 0 : No effect exists in the population.
• Alternative Hypothesis H A : The effect exists in the population.

In every study or experiment, researchers assess an effect or relationship. This effect can be the effectiveness of a new drug, building material, or other intervention that has benefits. There is a benefit or connection that the researchers hope to identify. Unfortunately, no effect may exist. In statistics, we call this lack of an effect the null hypothesis. Researchers assume that this notion of no effect is correct until they have enough evidence to suggest otherwise, similar to how a trial presumes innocence.

In this context, the analysts don’t necessarily believe the null hypothesis is correct. In fact, they typically want to reject it because that leads to more exciting finds about an effect or relationship. The new vaccine works!

You can think of it as the default theory that requires sufficiently strong evidence to reject. Like a prosecutor, researchers must collect sufficient evidence to overturn the presumption of no effect. Investigators must work hard to set up a study and a data collection system to obtain evidence that can reject the null hypothesis.

Related post : What is an Effect in Statistics?

Null Hypothesis Examples

Null hypotheses start as research questions that the investigator rephrases as a statement indicating there is no effect or relationship.

After reading these examples, you might think they’re a bit boring and pointless. However, the key is to remember that the null hypothesis defines the condition that the researchers need to discredit before suggesting an effect exists.

Let’s see how you reject the null hypothesis and get to those more exciting findings!

When to Reject the Null Hypothesis

So, you want to reject the null hypothesis, but how and when can you do that? To start, you’ll need to perform a statistical test on your data. The following is an overview of performing a study that uses a hypothesis test.

The first step is to devise a research question and the appropriate null hypothesis. After that, the investigators need to formulate an experimental design and data collection procedures that will allow them to gather data that can answer the research question. Then they collect the data. For more information about designing a scientific study that uses statistics, read my post 5 Steps for Conducting Studies with Statistics .

After data collection is complete, statistics and hypothesis testing enter the picture. Hypothesis testing takes your sample data and evaluates how consistent they are with the null hypothesis. The p-value is a crucial part of the statistical results because it quantifies how strongly the sample data contradict the null hypothesis.

When the sample data provide sufficient evidence, you can reject the null hypothesis. In a hypothesis test, this process involves comparing the p-value to your significance level .

Rejecting the Null Hypothesis

Reject the null hypothesis when the p-value is less than or equal to your significance level. Your sample data favor the alternative hypothesis, which suggests that the effect exists in the population. For a mnemonic device, remember—when the p-value is low, the null must go!

When you can reject the null hypothesis, your results are statistically significant. Learn more about Statistical Significance: Definition & Meaning .

Failing to Reject the Null Hypothesis

Conversely, when the p-value is greater than your significance level, you fail to reject the null hypothesis. The sample data provides insufficient data to conclude that the effect exists in the population. When the p-value is high, the null must fly!

Note that failing to reject the null is not the same as proving it. For more information about the difference, read my post about Failing to Reject the Null .

That’s a very general look at the process. But I hope you can see how the path to more exciting findings depends on being able to rule out the less exciting null hypothesis that states there’s nothing to see here!

Let’s move on to learning how to write the null hypothesis for different types of effects, relationships, and tests.

Related posts : How Hypothesis Tests Work and Interpreting P-values

How to Write a Null Hypothesis

The null hypothesis varies by the type of statistic and hypothesis test. Remember that inferential statistics use samples to draw conclusions about populations. Consequently, when you write a null hypothesis, it must make a claim about the relevant population parameter . Further, that claim usually indicates that the effect does not exist in the population. Below are typical examples of writing a null hypothesis for various parameters and hypothesis tests.

Related posts : Descriptive vs. Inferential Statistics and Populations, Parameters, and Samples in Inferential Statistics

Group Means

T-tests and ANOVA assess the differences between group means. For these tests, the null hypothesis states that there is no difference between group means in the population. In other words, the experimental conditions that define the groups do not affect the mean outcome. Mu (µ) is the population parameter for the mean, and you’ll need to include it in the statement for this type of study.

For example, an experiment compares the mean bone density changes for a new osteoporosis medication. The control group does not receive the medicine, while the treatment group does. The null states that the mean bone density changes for the control and treatment groups are equal.

• Null Hypothesis H 0 : Group means are equal in the population: µ 1 = µ 2 , or µ 1 – µ 2 = 0
• Alternative Hypothesis H A : Group means are not equal in the population: µ 1 ≠ µ 2 , or µ 1 – µ 2 ≠ 0.

Group Proportions

Proportions tests assess the differences between group proportions. For these tests, the null hypothesis states that there is no difference between group proportions. Again, the experimental conditions did not affect the proportion of events in the groups. P is the population proportion parameter that you’ll need to include.

For example, a vaccine experiment compares the infection rate in the treatment group to the control group. The treatment group receives the vaccine, while the control group does not. The null states that the infection rates for the control and treatment groups are equal.

• Null Hypothesis H 0 : Group proportions are equal in the population: p 1 = p 2 .
• Alternative Hypothesis H A : Group proportions are not equal in the population: p 1 ≠ p 2 .

Correlation and Regression Coefficients

Some studies assess the relationship between two continuous variables rather than differences between groups.

In these studies, analysts often use either correlation or regression analysis . For these tests, the null states that there is no relationship between the variables. Specifically, it says that the correlation or regression coefficient is zero. As one variable increases, there is no tendency for the other variable to increase or decrease. Rho (ρ) is the population correlation parameter and beta (β) is the regression coefficient parameter.

For example, a study assesses the relationship between screen time and test performance. The null states that there is no correlation between this pair of variables. As screen time increases, test performance does not tend to increase or decrease.

• Null Hypothesis H 0 : The correlation in the population is zero: ρ = 0.
• Alternative Hypothesis H A : The correlation in the population is not zero: ρ ≠ 0.

For all these cases, the analysts define the hypotheses before the study. After collecting the data, they perform a hypothesis test to determine whether they can reject the null hypothesis.

The preceding examples are all for two-tailed hypothesis tests. To learn about one-tailed tests and how to write a null hypothesis for them, read my post One-Tailed vs. Two-Tailed Tests .

Related post : Understanding Correlation

Neyman, J; Pearson, E. S. (January 1, 1933).  On the Problem of the most Efficient Tests of Statistical Hypotheses .  Philosophical Transactions of the Royal Society A .  231  (694–706): 289–337.

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January 11, 2024 at 2:57 pm

Thanks for the reply.

January 10, 2024 at 1:23 pm

Hi Jim, In your comment you state that equivalence test null and alternate hypotheses are reversed. For hypothesis tests of data fits to a probability distribution, the null hypothesis is that the probability distribution fits the data. Is this correct?

January 10, 2024 at 2:15 pm

Those two separate things, equivalence testing and normality tests. But, yes, you’re correct for both.

Hypotheses are switched for equivalence testing. You need to “work” (i.e., collect a large sample of good quality data) to be able to reject the null that the groups are different to be able to conclude they’re the same.

With typical hypothesis tests, if you have low quality data and a low sample size, you’ll fail to reject the null that they’re the same, concluding they’re equivalent. But that’s more a statement about the low quality and small sample size than anything to do with the groups being equal.

So, equivalence testing make you work to obtain a finding that the groups are the same (at least within some amount you define as a trivial difference).

For normality testing, and other distribution tests, the null states that the data follow the distribution (normal or whatever). If you reject the null, you have sufficient evidence to conclude that your sample data don’t follow the probability distribution. That’s a rare case where you hope to fail to reject the null. And it suffers from the problem I describe above where you might fail to reject the null simply because you have a small sample size. In that case, you’d conclude the data follow the probability distribution but it’s more that you don’t have enough data for the test to register the deviation. In this scenario, if you had a larger sample size, you’d reject the null and conclude it doesn’t follow that distribution.

I don’t know of any equivalence testing type approach for distribution fit tests where you’d need to work to show the data follow a distribution, although I haven’t looked for one either!

February 20, 2022 at 9:26 pm

Is a null hypothesis regularly (always) stated in the negative? “there is no” or “does not”

February 23, 2022 at 9:21 pm

Typically, the null hypothesis includes an equal sign. The null hypothesis states that the population parameter equals a particular value. That value is usually one that represents no effect. In the case of a one-sided hypothesis test, the null still contains an equal sign but it’s “greater than or equal to” or “less than or equal to.” If you wanted to translate the null hypothesis from its native mathematical expression, you could use the expression “there is no effect.” But the mathematical form more specifically states what it’s testing.

It’s the alternative hypothesis that typically contains does not equal.

There are some exceptions. For example, in an equivalence test where the researchers want to show that two things are equal, the null hypothesis states that they’re not equal.

In short, the null hypothesis states the condition that the researchers hope to reject. They need to work hard to set up an experiment and data collection that’ll gather enough evidence to be able to reject the null condition.

February 15, 2022 at 9:32 am

Dear sir I always read your notes on Research methods.. Kindly tell is there any available Book on all these..wonderfull Urgent

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What is The Null Hypothesis & When Do You Reject The Null Hypothesis

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On This Page:

A null hypothesis is a statistical concept suggesting no significant difference or relationship between measured variables. It’s the default assumption unless empirical evidence proves otherwise.

The null hypothesis states no relationship exists between the two variables being studied (i.e., one variable does not affect the other).

The null hypothesis is the statement that a researcher or an investigator wants to disprove.

Testing the null hypothesis can tell you whether your results are due to the effects of manipulating ​ the dependent variable or due to random chance. 

How to Write a Null Hypothesis

Null hypotheses (H0) start as research questions that the investigator rephrases as statements indicating no effect or relationship between the independent and dependent variables.

It is a default position that your research aims to challenge or confirm.

For example, if studying the impact of exercise on weight loss, your null hypothesis might be:

There is no significant difference in weight loss between individuals who exercise daily and those who do not.

Examples of Null Hypotheses

When Do We Reject The Null Hypothesis? 

We reject the null hypothesis when the data provide strong enough evidence to conclude that it is likely incorrect. This often occurs when the p-value (probability of observing the data given the null hypothesis is true) is below a predetermined significance level.

If the collected data does not meet the expectation of the null hypothesis, a researcher can conclude that the data lacks sufficient evidence to back up the null hypothesis, and thus the null hypothesis is rejected. 

Rejecting the null hypothesis means that a relationship does exist between a set of variables and the effect is statistically significant ( p > 0.05).

If the data collected from the random sample is not statistically significance , then the null hypothesis will be accepted, and the researchers can conclude that there is no relationship between the variables. 

You need to perform a statistical test on your data in order to evaluate how consistent it is with the null hypothesis. A p-value is one statistical measurement used to validate a hypothesis against observed data.

Calculating the p-value is a critical part of null-hypothesis significance testing because it quantifies how strongly the sample data contradicts the null hypothesis.

The level of statistical significance is often expressed as a  p  -value between 0 and 1. The smaller the p-value, the stronger the evidence that you should reject the null hypothesis.

Usually, a researcher uses a confidence level of 95% or 99% (p-value of 0.05 or 0.01) as general guidelines to decide if you should reject or keep the null.

When your p-value is less than or equal to your significance level, you reject the null hypothesis.

In other words, smaller p-values are taken as stronger evidence against the null hypothesis. Conversely, when the p-value is greater than your significance level, you fail to reject the null hypothesis.

In this case, the sample data provides insufficient data to conclude that the effect exists in the population.

Because you can never know with complete certainty whether there is an effect in the population, your inferences about a population will sometimes be incorrect.

When you incorrectly reject the null hypothesis, it’s called a type I error. When you incorrectly fail to reject it, it’s called a type II error.

Why Do We Never Accept The Null Hypothesis?

The reason we do not say “accept the null” is because we are always assuming the null hypothesis is true and then conducting a study to see if there is evidence against it. And, even if we don’t find evidence against it, a null hypothesis is not accepted.

A lack of evidence only means that you haven’t proven that something exists. It does not prove that something doesn’t exist. 

It is risky to conclude that the null hypothesis is true merely because we did not find evidence to reject it. It is always possible that researchers elsewhere have disproved the null hypothesis, so we cannot accept it as true, but instead, we state that we failed to reject the null. 

One can either reject the null hypothesis, or fail to reject it, but can never accept it.

Why Do We Use The Null Hypothesis?

We can never prove with 100% certainty that a hypothesis is true; We can only collect evidence that supports a theory. However, testing a hypothesis can set the stage for rejecting or accepting this hypothesis within a certain confidence level.

The null hypothesis is useful because it can tell us whether the results of our study are due to random chance or the manipulation of a variable (with a certain level of confidence).

A null hypothesis is rejected if the measured data is significantly unlikely to have occurred and a null hypothesis is accepted if the observed outcome is consistent with the position held by the null hypothesis.

Rejecting the null hypothesis sets the stage for further experimentation to see if a relationship between two variables exists. 

Hypothesis testing is a critical part of the scientific method as it helps decide whether the results of a research study support a particular theory about a given population. Hypothesis testing is a systematic way of backing up researchers’ predictions with statistical analysis.

It helps provide sufficient statistical evidence that either favors or rejects a certain hypothesis about the population parameter. 

Purpose of a Null Hypothesis 

• The primary purpose of the null hypothesis is to disprove an assumption. 
• Whether rejected or accepted, the null hypothesis can help further progress a theory in many scientific cases.
• A null hypothesis can be used to ascertain how consistent the outcomes of multiple studies are.

Do you always need both a Null Hypothesis and an Alternative Hypothesis?

The null (H0) and alternative (Ha or H1) hypotheses are two competing claims that describe the effect of the independent variable on the dependent variable. They are mutually exclusive, which means that only one of the two hypotheses can be true. 

While the null hypothesis states that there is no effect in the population, an alternative hypothesis states that there is statistical significance between two variables. 

The goal of hypothesis testing is to make inferences about a population based on a sample. In order to undertake hypothesis testing, you must express your research hypothesis as a null and alternative hypothesis. Both hypotheses are required to cover every possible outcome of the study. 

What is the difference between a null hypothesis and an alternative hypothesis?

The alternative hypothesis is the complement to the null hypothesis. The null hypothesis states that there is no effect or no relationship between variables, while the alternative hypothesis claims that there is an effect or relationship in the population.

It is the claim that you expect or hope will be true. The null hypothesis and the alternative hypothesis are always mutually exclusive, meaning that only one can be true at a time.

What are some problems with the null hypothesis?

One major problem with the null hypothesis is that researchers typically will assume that accepting the null is a failure of the experiment. However, accepting or rejecting any hypothesis is a positive result. Even if the null is not refuted, the researchers will still learn something new.

Why can a null hypothesis not be accepted?

We can either reject or fail to reject a null hypothesis, but never accept it. If your test fails to detect an effect, this is not proof that the effect doesn’t exist. It just means that your sample did not have enough evidence to conclude that it exists.

We can’t accept a null hypothesis because a lack of evidence does not prove something that does not exist. Instead, we fail to reject it.

Failing to reject the null indicates that the sample did not provide sufficient enough evidence to conclude that an effect exists.

If the p-value is greater than the significance level, then you fail to reject the null hypothesis.

Is a null hypothesis directional or non-directional?

A hypothesis test can either contain an alternative directional hypothesis or a non-directional alternative hypothesis. A directional hypothesis is one that contains the less than (“<“) or greater than (“>”) sign.

A nondirectional hypothesis contains the not equal sign (“≠”).  However, a null hypothesis is neither directional nor non-directional.

A null hypothesis is a prediction that there will be no change, relationship, or difference between two variables.

The directional hypothesis or nondirectional hypothesis would then be considered alternative hypotheses to the null hypothesis.

Gill, J. (1999). The insignificance of null hypothesis significance testing.  Political research quarterly ,  52 (3), 647-674.

Krueger, J. (2001). Null hypothesis significance testing: On the survival of a flawed method.  American Psychologist ,  56 (1), 16.

Masson, M. E. (2011). A tutorial on a practical Bayesian alternative to null-hypothesis significance testing.  Behavior research methods ,  43 , 679-690.

Nickerson, R. S. (2000). Null hypothesis significance testing: a review of an old and continuing controversy.  Psychological methods ,  5 (2), 241.

Rozeboom, W. W. (1960). The fallacy of the null-hypothesis significance test.  Psychological bulletin ,  57 (5), 416.

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• Null and Alternative Hypotheses | Definitions & Examples

Null & Alternative Hypotheses | Definitions, Templates & Examples

Published on May 6, 2022 by Shaun Turney . Revised on June 22, 2023.

The null and alternative hypotheses are two competing claims that researchers weigh evidence for and against using a statistical test :

• Null hypothesis ( H 0 ): There’s no effect in the population .
• Alternative hypothesis ( H a or H 1 ) : There’s an effect in the population.

Table of contents

Answering your research question with hypotheses, what is a null hypothesis, what is an alternative hypothesis, similarities and differences between null and alternative hypotheses, how to write null and alternative hypotheses, other interesting articles, frequently asked questions.

The null and alternative hypotheses offer competing answers to your research question . When the research question asks “Does the independent variable affect the dependent variable?”:

• The null hypothesis ( H 0 ) answers “No, there’s no effect in the population.”
• The alternative hypothesis ( H a ) answers “Yes, there is an effect in the population.”

The null and alternative are always claims about the population. That’s because the goal of hypothesis testing is to make inferences about a population based on a sample . Often, we infer whether there’s an effect in the population by looking at differences between groups or relationships between variables in the sample. It’s critical for your research to write strong hypotheses .

You can use a statistical test to decide whether the evidence favors the null or alternative hypothesis. Each type of statistical test comes with a specific way of phrasing the null and alternative hypothesis. However, the hypotheses can also be phrased in a general way that applies to any test.

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The null hypothesis is the claim that there’s no effect in the population.

If the sample provides enough evidence against the claim that there’s no effect in the population ( p ≤ α), then we can reject the null hypothesis . Otherwise, we fail to reject the null hypothesis.

Although “fail to reject” may sound awkward, it’s the only wording that statisticians accept . Be careful not to say you “prove” or “accept” the null hypothesis.

Null hypotheses often include phrases such as “no effect,” “no difference,” or “no relationship.” When written in mathematical terms, they always include an equality (usually =, but sometimes ≥ or ≤).

You can never know with complete certainty whether there is an effect in the population. Some percentage of the time, your inference about the population will be incorrect. When you incorrectly reject the null hypothesis, it’s called a type I error . When you incorrectly fail to reject it, it’s a type II error.

Examples of null hypotheses

The table below gives examples of research questions and null hypotheses. There’s always more than one way to answer a research question, but these null hypotheses can help you get started.

*Note that some researchers prefer to always write the null hypothesis in terms of “no effect” and “=”. It would be fine to say that daily meditation has no effect on the incidence of depression and p 1 = p 2 .

The alternative hypothesis ( H a ) is the other answer to your research question . It claims that there’s an effect in the population.

Often, your alternative hypothesis is the same as your research hypothesis. In other words, it’s the claim that you expect or hope will be true.

The alternative hypothesis is the complement to the null hypothesis. Null and alternative hypotheses are exhaustive, meaning that together they cover every possible outcome. They are also mutually exclusive, meaning that only one can be true at a time.

Alternative hypotheses often include phrases such as “an effect,” “a difference,” or “a relationship.” When alternative hypotheses are written in mathematical terms, they always include an inequality (usually ≠, but sometimes < or >). As with null hypotheses, there are many acceptable ways to phrase an alternative hypothesis.

Examples of alternative hypotheses

The table below gives examples of research questions and alternative hypotheses to help you get started with formulating your own.

Null and alternative hypotheses are similar in some ways:

• They’re both answers to the research question.
• They both make claims about the population.
• They’re both evaluated by statistical tests.

However, there are important differences between the two types of hypotheses, summarized in the following table.

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To help you write your hypotheses, you can use the template sentences below. If you know which statistical test you’re going to use, you can use the test-specific template sentences. Otherwise, you can use the general template sentences.

General template sentences

The only thing you need to know to use these general template sentences are your dependent and independent variables. To write your research question, null hypothesis, and alternative hypothesis, fill in the following sentences with your variables:

Does independent variable affect dependent variable ?

• Null hypothesis ( H 0 ): Independent variable does not affect dependent variable.
• Alternative hypothesis ( H a ): Independent variable affects dependent variable.

Test-specific template sentences

Once you know the statistical test you’ll be using, you can write your hypotheses in a more precise and mathematical way specific to the test you chose. The table below provides template sentences for common statistical tests.

Note: The template sentences above assume that you’re performing one-tailed tests . One-tailed tests are appropriate for most studies.

If you want to know more about statistics , methodology , or research bias , make sure to check out some of our other articles with explanations and examples.

• Normal distribution
• Descriptive statistics
• Measures of central tendency
• Correlation coefficient

Methodology

• Cluster sampling
• Stratified sampling
• Types of interviews
• Cohort study
• Thematic analysis

Research bias

• Implicit bias
• Cognitive bias
• Survivorship bias
• Availability heuristic
• Nonresponse bias
• Regression to the mean

Hypothesis testing is a formal procedure for investigating our ideas about the world using statistics. It is used by scientists to test specific predictions, called hypotheses , by calculating how likely it is that a pattern or relationship between variables could have arisen by chance.

Null and alternative hypotheses are used in statistical hypothesis testing . The null hypothesis of a test always predicts no effect or no relationship between variables, while the alternative hypothesis states your research prediction of an effect or relationship.

The null hypothesis is often abbreviated as H 0 . When the null hypothesis is written using mathematical symbols, it always includes an equality symbol (usually =, but sometimes ≥ or ≤).

The alternative hypothesis is often abbreviated as H a or H 1 . When the alternative hypothesis is written using mathematical symbols, it always includes an inequality symbol (usually ≠, but sometimes < or >).

A research hypothesis is your proposed answer to your research question. The research hypothesis usually includes an explanation (“ x affects y because …”).

A statistical hypothesis, on the other hand, is a mathematical statement about a population parameter. Statistical hypotheses always come in pairs: the null and alternative hypotheses . In a well-designed study , the statistical hypotheses correspond logically to the research hypothesis.

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Null Hypothesis Definition and Examples, How to State

What is the null hypothesis, how to state the null hypothesis, null hypothesis overview.

Why is it Called the “Null”?

The word “null” in this context means that it’s a commonly accepted fact that researchers work to nullify . It doesn’t mean that the statement is null (i.e. amounts to nothing) itself! (Perhaps the term should be called the “nullifiable hypothesis” as that might cause less confusion).

Why Do I need to Test it? Why not just prove an alternate one?

The short answer is, as a scientist, you are required to ; It’s part of the scientific process. Science uses a battery of processes to prove or disprove theories, making sure than any new hypothesis has no flaws. Including both a null and an alternate hypothesis is one safeguard to ensure your research isn’t flawed. Not including the null hypothesis in your research is considered very bad practice by the scientific community. If you set out to prove an alternate hypothesis without considering it, you are likely setting yourself up for failure. At a minimum, your experiment will likely not be taken seriously.

• Null hypothesis : H 0 : The world is flat.
• Alternate hypothesis: The world is round.

Several scientists, including Copernicus , set out to disprove the null hypothesis. This eventually led to the rejection of the null and the acceptance of the alternate. Most people accepted it — the ones that didn’t created the Flat Earth Society !. What would have happened if Copernicus had not disproved the it and merely proved the alternate? No one would have listened to him. In order to change people’s thinking, he first had to prove that their thinking was wrong .

How to State the Null Hypothesis from a Word Problem

You’ll be asked to convert a word problem into a hypothesis statement in statistics that will include a null hypothesis and an alternate hypothesis . Breaking your problem into a few small steps makes these problems much easier to handle.

Step 2: Convert the hypothesis to math . Remember that the average is sometimes written as μ.

H 1 : μ > 8.2

Broken down into (somewhat) English, that’s H 1 (The hypothesis): μ (the average) > (is greater than) 8.2

Step 3: State what will happen if the hypothesis doesn’t come true. If the recovery time isn’t greater than 8.2 weeks, there are only two possibilities, that the recovery time is equal to 8.2 weeks or less than 8.2 weeks.

H 0 : μ ≤ 8.2

Broken down again into English, that’s H 0 (The null hypothesis): μ (the average) ≤ (is less than or equal to) 8.2

How to State the Null Hypothesis: Part Two

But what if the researcher doesn’t have any idea what will happen.

Example Problem: A researcher is studying the effects of radical exercise program on knee surgery patients. There is a good chance the therapy will improve recovery time, but there’s also the possibility it will make it worse. Average recovery times for knee surgery patients is 8.2 weeks. 

Step 1: State what will happen if the experiment doesn’t make any difference. That’s the null hypothesis–that nothing will happen. In this experiment, if nothing happens, then the recovery time will stay at 8.2 weeks.

H 0 : μ = 8.2

Broken down into English, that’s H 0 (The null hypothesis): μ (the average) = (is equal to) 8.2

Step 2: Figure out the alternate hypothesis . The alternate hypothesis is the opposite of the null hypothesis. In other words, what happens if our experiment makes a difference?

H 1 : μ ≠ 8.2

In English again, that’s H 1 (The  alternate hypothesis): μ (the average) ≠ (is not equal to) 8.2

That’s How to State the Null Hypothesis!

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Gonick, L. (1993). The Cartoon Guide to Statistics . HarperPerennial. Kotz, S.; et al., eds. (2006), Encyclopedia of Statistical Sciences , Wiley.

Null Hypothesis

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• Cite this reference work entry

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In formal hypothesis testing, the null hypothesis ( H 0 ) is the hypothesis assumed to be true in the population and which gives rise to the sampling distribution of the test statistic in question (Hays 1994 ). The critical feature of the null hypothesis across hypothesis testing frameworks is that it is stated with enough precision that it can be tested.

Introduction

A hypothesis is a statement or explanation about the nature or causes of some phenomena of interest. In the process of scientific study, we can distinguish two forms of hypotheses. A research hypothesis poses the question of interest, and if well stated, will include the variables under study and the expected relationship between them. A statistical hypothesis translates the research hypothesis into a mathematically precise, statistically testable statement concerning the assumed value of a parameter of interest in the population. The null hypothesis is an example of a statistical hypothesis.

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Neyman, J., & Pearson, E. S. (1933). On the problem of the most efficient tests of statistical hypotheses. Philosophical Transactions of the Royal Society of London, Series A, 231 , 289–337.

Szucs, D., & Ioannidis, J. P. A. (2016). When null hypothesis significance testing is unsuitable for research: A reassessment. bioRxiv . https://doi.org/10.1101/095570 .

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Booth, T., Doumas, A., Murray, A.L. (2020). Null Hypothesis. In: Zeigler-Hill, V., Shackelford, T.K. (eds) Encyclopedia of Personality and Individual Differences. Springer, Cham. https://doi.org/10.1007/978-3-319-24612-3_1335

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Writing Null Hypotheses in Research and Statistics

Last Updated: January 17, 2024 Fact Checked

This article was co-authored by Joseph Quinones and by wikiHow staff writer, Jennifer Mueller, JD . Joseph Quinones is a Physics Teacher working at South Bronx Community Charter High School. Joseph specializes in astronomy and astrophysics and is interested in science education and science outreach, currently practicing ways to make physics accessible to more students with the goal of bringing more students of color into the STEM fields. He has experience working on Astrophysics research projects at the Museum of Natural History (AMNH). Joseph recieved his Bachelor's degree in Physics from Lehman College and his Masters in Physics Education from City College of New York (CCNY). He is also a member of a network called New York City Men Teach. There are 7 references cited in this article, which can be found at the bottom of the page. This article has been fact-checked, ensuring the accuracy of any cited facts and confirming the authority of its sources. This article has been viewed 29,248 times.

Are you working on a research project and struggling with how to write a null hypothesis? Well, you've come to the right place! Start by recognizing that the basic definition of "null" is "none" or "zero"—that's your biggest clue as to what a null hypothesis should say. Keep reading to learn everything you need to know about the null hypothesis, including how it relates to your research question and your alternative hypothesis as well as how to use it in different types of studies.

Things You Should Know

• Write a research null hypothesis as a statement that the studied variables have no relationship to each other, or that there's no difference between 2 groups.

• Adjust the format of your null hypothesis to match the statistical method you used to test it, such as using "mean" if you're comparing the mean between 2 groups.

What is a null hypothesis?

• Research hypothesis: States in plain language that there's no relationship between the 2 variables or there's no difference between the 2 groups being studied.
• Statistical hypothesis: States the predicted outcome of statistical analysis through a mathematical equation related to the statistical method you're using.

Examples of Null Hypotheses

Null Hypothesis vs. Alternative Hypothesis

• For example, your alternative hypothesis could state a positive correlation between 2 variables while your null hypothesis states there's no relationship. If there's a negative correlation, then both hypotheses are false.

• You need additional data or evidence to show that your alternative hypothesis is correct—proving the null hypothesis false is just the first step.
• In smaller studies, sometimes it's enough to show that there's some relationship and your hypothesis could be correct—you can leave the additional proof as an open question for other researchers to tackle.

How do I test a null hypothesis?

• Group means: Compare the mean of the variable in your sample with the mean of the variable in the general population. [6] X Research source
• Group proportions: Compare the proportion of the variable in your sample with the proportion of the variable in the general population. [7] X Research source
• Correlation: Correlation analysis looks at the relationship between 2 variables—specifically, whether they tend to happen together. [8] X Research source
• Regression: Regression analysis reveals the correlation between 2 variables while also controlling for the effect of other, interrelated variables. [9] X Research source

Templates for Null Hypotheses

• Research null hypothesis: There is no difference in the mean [dependent variable] between [group 1] and [group 2].

• Research null hypothesis: The proportion of [dependent variable] in [group 1] and [group 2] is the same.

• Research null hypothesis: There is no correlation between [independent variable] and [dependent variable] in the population.

• Research null hypothesis: There is no relationship between [independent variable] and [dependent variable] in the population.

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Thanks for reading our article! If you’d like to learn more about physics, check out our in-depth interview with Joseph Quinones .

• ↑ https://online.stat.psu.edu/stat100/lesson/10/10.1
• ↑ https://online.stat.psu.edu/stat501/lesson/2/2.12
• ↑ https://support.minitab.com/en-us/minitab/21/help-and-how-to/statistics/basic-statistics/supporting-topics/basics/null-and-alternative-hypotheses/
• ↑ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5635437/
• ↑ https://online.stat.psu.edu/statprogram/reviews/statistical-concepts/hypothesis-testing
• ↑ https://education.arcus.chop.edu/null-hypothesis-testing/
• ↑ https://sphweb.bumc.bu.edu/otlt/mph-modules/bs/bs704_hypothesistest-means-proportions/bs704_hypothesistest-means-proportions_print.html

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Null Hypothesis

In mathematics, Statistics deals with the study of research and surveys on the numerical data. For taking surveys, we have to define the hypothesis. Generally, there are two types of hypothesis. One is a null hypothesis, and another is an alternative hypothesis .

In probability and statistics, the null hypothesis is a comprehensive statement or default status that there is zero happening or nothing happening. For example, there is no connection among groups or no association between two measured events. It is generally assumed here that the hypothesis is true until any other proof has been brought into the light to deny the hypothesis. Let us learn more here with definition, symbol, principle, types and example, in this article.

Table of contents:

• Comparison with Alternative Hypothesis

Null Hypothesis Definition

The null hypothesis is a kind of hypothesis which explains the population parameter whose purpose is to test the validity of the given experimental data. This hypothesis is either rejected or not rejected based on the viability of the given population or sample . In other words, the null hypothesis is a hypothesis in which the sample observations results from the chance. It is said to be a statement in which the surveyors wants to examine the data. It is denoted by H 0 .

Null Hypothesis Symbol

In statistics, the null hypothesis is usually denoted by letter H with subscript ‘0’ (zero), such that H 0 . It is pronounced as H-null or H-zero or H-nought. At the same time, the alternative hypothesis expresses the observations determined by the non-random cause. It is represented by H 1 or H a .

Null Hypothesis Principle

The principle followed for null hypothesis testing is, collecting the data and determining the chances of a given set of data during the study on some random sample, assuming that the null hypothesis is true. In case if the given data does not face the expected null hypothesis, then the outcome will be quite weaker, and they conclude by saying that the given set of data does not provide strong evidence against the null hypothesis because of insufficient evidence. Finally, the researchers tend to reject that.

Null Hypothesis Formula

Here, the hypothesis test formulas are given below for reference.

The formula for the null hypothesis is:

H 0 :  p = p 0

The formula for the alternative hypothesis is:

H a = p >p 0 , < p 0 ≠ p 0

The formula for the test static is:

Remember that,  p 0  is the null hypothesis and p – hat is the sample proportion.

Also, read:

Types of Null Hypothesis

There are different types of hypothesis. They are:

Simple Hypothesis

It completely specifies the population distribution. In this method, the sampling distribution is the function of the sample size.

Composite Hypothesis

The composite hypothesis is one that does not completely specify the population distribution.

Exact Hypothesis

Exact hypothesis defines the exact value of the parameter. For example μ= 50

Inexact Hypothesis

This type of hypothesis does not define the exact value of the parameter. But it denotes a specific range or interval. For example 45< μ <60

Null Hypothesis Rejection

Sometimes the null hypothesis is rejected too. If this hypothesis is rejected means, that research could be invalid. Many researchers will neglect this hypothesis as it is merely opposite to the alternate hypothesis. It is a better practice to create a hypothesis and test it. The goal of researchers is not to reject the hypothesis. But it is evident that a perfect statistical model is always associated with the failure to reject the null hypothesis.

How do you Find the Null Hypothesis?

The null hypothesis says there is no correlation between the measured event (the dependent variable) and the independent variable. We don’t have to believe that the null hypothesis is true to test it. On the contrast, you will possibly assume that there is a connection between a set of variables ( dependent and independent).

When is Null Hypothesis Rejected?

The null hypothesis is rejected using the P-value approach. If the P-value is less than or equal to the α, there should be a rejection of the null hypothesis in favour of the alternate hypothesis. In case, if P-value is greater than α, the null hypothesis is not rejected.

Null Hypothesis and Alternative Hypothesis

Now, let us discuss the difference between the null hypothesis and the alternative hypothesis.

Null Hypothesis Examples

Here, some of the examples of the null hypothesis are given below. Go through the below ones to understand the concept of the null hypothesis in a better way.

If a medicine reduces the risk of cardiac stroke, then the null hypothesis should be “the medicine does not reduce the chance of cardiac stroke”. This testing can be performed by the administration of a drug to a certain group of people in a controlled way. If the survey shows that there is a significant change in the people, then the hypothesis is rejected.

Few more examples are:

1). Are there is 100% chance of getting affected by dengue?

Ans: There could be chances of getting affected by dengue but not 100%.

2). Do teenagers are using mobile phones more than grown-ups to access the internet?

Ans: Age has no limit on using mobile phones to access the internet.

3). Does having apple daily will not cause fever?

Ans: Having apple daily does not assure of not having fever, but increases the immunity to fight against such diseases.

4). Do the children more good in doing mathematical calculations than grown-ups?

Ans: Age has no effect on Mathematical skills.

In many common applications, the choice of the null hypothesis is not automated, but the testing and calculations may be automated. Also, the choice of the null hypothesis is completely based on previous experiences and inconsistent advice. The choice can be more complicated and based on the variety of applications and the diversity of the objectives. 

The main limitation for the choice of the null hypothesis is that the hypothesis suggested by the data is based on the reasoning which proves nothing. It means that if some hypothesis provides a summary of the data set, then there would be no value in the testing of the hypothesis on the particular set of data. 

Frequently Asked Questions on Null Hypothesis

What is meant by the null hypothesis.

In Statistics, a null hypothesis is a type of hypothesis which explains the population parameter whose purpose is to test the validity of the given experimental data.

What are the benefits of hypothesis testing?

Hypothesis testing is defined as a form of inferential statistics, which allows making conclusions from the entire population based on the sample representative.

When a null hypothesis is accepted and rejected?

The null hypothesis is either accepted or rejected in terms of the given data. If P-value is less than α, then the null hypothesis is rejected in favor of the alternative hypothesis, and if the P-value is greater than α, then the null hypothesis is accepted in favor of the alternative hypothesis.

Why is the null hypothesis important?

The importance of the null hypothesis is that it provides an approximate description of the phenomena of the given data. It allows the investigators to directly test the relational statement in a research study.

How to accept or reject the null hypothesis in the chi-square test?

If the result of the chi-square test is bigger than the critical value in the table, then the data does not fit the model, which represents the rejection of the null hypothesis.

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Null hypothesis

Null hypothesis n., plural: null hypotheses [nʌl haɪˈpɒθɪsɪs] Definition: a hypothesis that is valid or presumed true until invalidated by a statistical test

Table of Contents

Null Hypothesis Definition

Null hypothesis is defined as “the commonly accepted fact (such as the sky is blue) and researcher aim to reject or nullify this fact”.

More formally, we can define a null hypothesis as “a statistical theory suggesting that no statistical relationship exists between given observed variables” .

In biology , the null hypothesis is used to nullify or reject a common belief. The researcher carries out the research which is aimed at rejecting the commonly accepted belief.

What Is a Null Hypothesis?

A hypothesis is defined as a theory or an assumption that is based on inadequate evidence. It needs and requires more experiments and testing for confirmation. There are two possibilities that by doing more experiments and testing, a hypothesis can be false or true. It means it can either prove wrong or true (Blackwelder, 1982).

For example, Susie assumes that mineral water helps in the better growth and nourishment of plants over distilled water. To prove this hypothesis, she performs this experiment for almost a month. She watered some plants with mineral water and some with distilled water.

In a hypothesis when there are no statistically significant relationships among the two variables, the hypothesis is said to be a null hypothesis. The investigator is trying to disprove such a hypothesis. In the above example of plants, the null hypothesis is:

There are no statistical relationships among the forms of water that are given to plants for growth and nourishment.

Usually, an investigator tries to prove the null hypothesis wrong and tries to explain a relation and association between the two variables.

An opposite and reverse of the null hypothesis are known as the alternate hypothesis . In the example of plants the alternate hypothesis is:

There are statistical relationships among the forms of water that are given to plants for growth and nourishment.

The example below shows the difference between null vs alternative hypotheses:

Alternate Hypothesis: The world is round Null Hypothesis: The world is not round.

Copernicus and many other scientists try to prove the null hypothesis wrong and false. By their experiments and testing, they make people believe that alternate hypotheses are correct and true. If they do not prove the null hypothesis experimentally wrong then people will not believe them and never consider the alternative hypothesis true and correct.

The alternative and null hypothesis for Susie’s assumption is:

• Null Hypothesis: If one plant is watered with distilled water and the other with mineral water, then there is no difference in the growth and nourishment of these two plants.
• Alternative Hypothesis:  If one plant is watered with distilled water and the other with mineral water, then the plant with mineral water shows better growth and nourishment.

The null hypothesis suggests that there is no significant or statistical relationship. The relation can either be in a single set of variables or among two sets of variables.

Most people consider the null hypothesis true and correct. Scientists work and perform different experiments and do a variety of research so that they can prove the null hypothesis wrong or nullify it. For this purpose, they design an alternate hypothesis that they think is correct or true. The null hypothesis symbol is H 0 (it is read as H null or H zero ).

Why is it named the “Null”?

The name null is given to this hypothesis to clarify and explain that the scientists are working to prove it false i.e. to nullify the hypothesis. Sometimes it confuses the readers; they might misunderstand it and think that statement has nothing. It is blank but, actually, it is not. It is more appropriate and suitable to call it a nullifiable hypothesis instead of the null hypothesis.

Why do we need to assess it? Why not just verify an alternate one?

In science, the scientific method is used. It involves a series of different steps. Scientists perform these steps so that a hypothesis can be proved false or true. Scientists do this to confirm that there will be any limitation or inadequacy in the new hypothesis. Experiments are done by considering both alternative and null hypotheses, which makes the research safe. It gives a negative as well as a bad impact on research if a null hypothesis is not included or a part of the study. It seems like you are not taking your research seriously and not concerned about it and just want to impose your results as correct and true if the null hypothesis is not a part of the study.

Development of the Null

In statistics, firstly it is necessary to design alternate and null hypotheses from the given problem. Splitting the problem into small steps makes the pathway towards the solution easier and less challenging. how to write a null hypothesis?

Writing a null hypothesis consists of two steps:

• Firstly, initiate by asking a question.
• Secondly, restate the question in such a way that it seems there are no relationships among the variables.

In other words, assume in such a way that the treatment does not have any effect.

The usual recovery duration after knee surgery is considered almost 8 weeks.

A researcher thinks that the recovery period may get elongated if patients go to a physiotherapist for rehabilitation twice per week, instead of thrice per week, i.e. recovery duration reduces if the patient goes three times for rehabilitation instead of two times.

Step 1: Look for the problem in the hypothesis. The hypothesis either be a word or can be a statement. In the above example the hypothesis is:

“The expected recovery period in knee rehabilitation is more than 8 weeks”

Step 2: Make a mathematical statement from the hypothesis. Averages can also be represented as μ, thus the null hypothesis formula will be.

In the above equation, the hypothesis is equivalent to H1, the average is denoted by μ and > that the average is greater than eight.

Step 3: Explain what will come up if the hypothesis does not come right i.e., the rehabilitation period may not proceed more than 08 weeks.

There are two options: either the recovery will be less than or equal to 8 weeks.

H 0 : μ ≤ 8

In the above equation, the null hypothesis is equivalent to H 0 , the average is denoted by μ and ≤ represents that the average is less than or equal to eight.

What will happen if the scientist does not have any knowledge about the outcome?

Problem: An investigator investigates the post-operative impact and influence of radical exercise on patients who have operative procedures of the knee. The chances are either the exercise will improve the recovery or will make it worse. The usual time for recovery is 8 weeks.

Step 1: Make a null hypothesis i.e. the exercise does not show any effect and the recovery time remains almost 8 weeks.

H 0 : μ = 8

In the above equation, the null hypothesis is equivalent to H 0 , the average is denoted by μ, and the equal sign (=) shows that the average is equal to eight.

Step 2: Make the alternate hypothesis which is the reverse of the null hypothesis. Particularly what will happen if treatment (exercise) makes an impact?

In the above equation, the alternate hypothesis is equivalent to H1, the average is denoted by μ and not equal sign (≠) represents that the average is not equal to eight.

Significance Tests

To get a reasonable and probable clarification of statistics (data), a significance test is performed. The null hypothesis does not have data. It is a piece of information or statement which contains numerical figures about the population. The data can be in different forms like in means or proportions. It can either be the difference of proportions and means or any odd ratio.

The following table will explain the symbols:

P-value is the chief statistical final result of the significance test of the null hypothesis.

• P-value = Pr(data or data more extreme | H 0 true)
• | = “given”
• Pr = probability
• H 0 = the null hypothesis

The first stage of Null Hypothesis Significance Testing (NHST) is to form an alternate and null hypothesis. By this, the research question can be briefly explained.

Null Hypothesis = no effect of treatment, no difference, no association Alternative Hypothesis = effective treatment, difference, association

When to reject the null hypothesis?

Researchers will reject the null hypothesis if it is proven wrong after experimentation. Researchers accept null hypothesis to be true and correct until it is proven wrong or false. On the other hand, the researchers try to strengthen the alternate hypothesis. The binomial test is performed on a sample and after that, a series of tests were performed (Frick, 1995).

Step 1: Evaluate and read the research question carefully and consciously and make a null hypothesis. Verify the sample that supports the binomial proportion. If there is no difference then find out the value of the binomial parameter.

Show the null hypothesis as:

H 0 :p= the value of p if H 0 is true

To find out how much it varies from the proposed data and the value of the null hypothesis, calculate the sample proportion.

Step 2: In test statistics, find the binomial test that comes under the null hypothesis. The test must be based on precise and thorough probabilities. Also make a list of pmf that apply, when the null hypothesis proves true and correct.

When H 0 is true, X~b(n, p)

N = size of the sample

P = assume value if H 0 proves true.

Step 3: Find out the value of P. P-value is the probability of data that is under observation.

Rise or increase in the P value = Pr(X ≥ x)

X = observed number of successes

P value = Pr(X ≤ x).

Step 4: Demonstrate the findings or outcomes in a descriptive detailed way.

• Sample proportion
• The direction of difference (either increases or decreases)

Perceived Problems With the Null Hypothesis

Variable or model selection and less information in some cases are the chief important issues that affect the testing of the null hypothesis. Statistical tests of the null hypothesis are reasonably not strong. There is randomization about significance. (Gill, 1999) The main issue with the testing of the null hypothesis is that they all are wrong or false on a ground basis.

There is another problem with the a-level . This is an ignored but also a well-known problem. The value of a-level is without a theoretical basis and thus there is randomization in conventional values, most commonly 0.q, 0.5, or 0.01. If a fixed value of a is used, it will result in the formation of two categories (significant and non-significant) The issue of a randomized rejection or non-rejection is also present when there is a practical matter which is the strong point of the evidence related to a scientific matter.

The P-value has the foremost importance in the testing of null hypothesis but as an inferential tool and for interpretation, it has a problem. The P-value is the probability of getting a test statistic at least as extreme as the observed one.

The main point about the definition is: Observed results are not based on a-value

Moreover, the evidence against the null hypothesis was overstated due to unobserved results. A-value has importance more than just being a statement. It is a precise statement about the evidence from the observed results or data. Similarly, researchers found that P-values are objectionable. They do not prefer null hypotheses in testing. It is also clear that the P-value is strictly dependent on the null hypothesis. It is computer-based statistics. In some precise experiments, the null hypothesis statistics and actual sampling distribution are closely related but this does not become possible in observational studies.

Some researchers pointed out that the P-value is depending on the sample size. If the true and exact difference is small, a null hypothesis even of a large sample may get rejected. This shows the difference between biological importance and statistical significance. (Killeen, 2005)

Another issue is the fix a-level, i.e., 0.1. On the basis, if a-level a null hypothesis of a large sample may get accepted or rejected. If the size of simple is infinity and the null hypothesis is proved true there are still chances of Type I error. That is the reason this approach or method is not considered consistent and reliable. There is also another problem that the exact information about the precision and size of the estimated effect cannot be known. The only solution is to state the size of the effect and its precision.

Null Hypothesis Examples

Here are some examples:

Example 1: Hypotheses with One Sample of One Categorical Variable

Among all the population of humans, almost 10% of people prefer to do their task with their left hand i.e. left-handed. Let suppose, a researcher in the Penn States says that the population of students at the College of Arts and Architecture is mostly left-handed as compared to the general population of humans in general public society. In this case, there is only a sample and there is a comparison among the known population values to the population proportion of sample value.

• Research Question: Do artists more expected to be left-handed as compared to the common population persons in society?
• Response Variable: Sorting the student into two categories. One category has left-handed persons and the other category have right-handed persons.
• Form Null Hypothesis: Arts and Architecture college students are no more predicted to be lefty as compared to the common population persons in society (Lefty students of Arts and Architecture college population is 10% or p= 0.10)

Example 2: Hypotheses with One Sample of One Measurement Variable

A generic brand of antihistamine Diphenhydramine making medicine in the form of a capsule, having a 50mg dose. The maker of the medicines is concerned that the machine has come out of calibration and is not making more capsules with the suitable and appropriate dose.

• Research Question: Does the statistical data recommended about the mean and average dosage of the population differ from 50mg?
• Response Variable: Chemical assay used to find the appropriate dosage of the active ingredient.
• Null Hypothesis: Usually, the 50mg dosage of capsules of this trade name (population average and means dosage =50 mg).

Example 3: Hypotheses with Two Samples of One Categorical Variable

Several people choose vegetarian meals on a daily basis. Typically, the researcher thought that females like vegetarian meals more than males.

• Research Question: Does the data recommend that females (women) prefer vegetarian meals more than males (men) regularly?
• Response Variable: Cataloguing the persons into vegetarian and non-vegetarian categories. Grouping Variable: Gender
• Null Hypothesis: Gender is not linked to those who like vegetarian meals. (Population percent of women who eat vegetarian meals regularly = population percent of men who eat vegetarian meals regularly or p women = p men).

Example 4: Hypotheses with Two Samples of One Measurement Variable

Nowadays obesity and being overweight is one of the major and dangerous health issues. Research is performed to confirm that a low carbohydrates diet leads to faster weight loss than a low-fat diet.

• Research Question: Does the given data recommend that usually, a low-carbohydrate diet helps in losing weight faster as compared to a low-fat diet?
• Response Variable: Weight loss (pounds)
• Explanatory Variable: Form of diet either low carbohydrate or low fat
• Null Hypothesis: There is no significant difference when comparing the mean loss of weight of people using a low carbohydrate diet to people using a diet having low fat. (population means loss of weight on a low carbohydrate diet = population means loss of weight on a diet containing low fat).

Example 5: Hypotheses about the relationship between Two Categorical Variables

A case-control study was performed. The study contains nonsmokers, stroke patients, and controls. The subjects are of the same occupation and age and the question was asked if someone at their home or close surrounding smokes?

• Research Question: Did second-hand smoke enhance the chances of stroke?
• Variables: There are 02 diverse categories of variables. (Controls and stroke patients) (whether the smoker lives in the same house). The chances of having a stroke will be increased if a person is living with a smoker.
• Null Hypothesis: There is no significant relationship between a passive smoker and stroke or brain attack. (odds ratio between stroke and the passive smoker is equal to 1).

Example 6: Hypotheses about the relationship between Two Measurement Variables

A financial expert observes that there is somehow a positive and effective relationship between the variation in stock rate price and the quantity of stock bought by non-management employees

• Response variable- Regular alteration in price
• Explanatory Variable- Stock bought by non-management employees
• Null Hypothesis: The association and relationship between the regular stock price alteration ($) and the daily stock-buying by non-management employees ($) = 0.

Example 7: Hypotheses about comparing the relationship between Two Measurement Variables in Two Samples

• Research Question: Is the relation between the bill paid in a restaurant and the tip given to the waiter, is linear? Is this relation different for dining and family restaurants?
• Explanatory Variable- total bill amount
• Response Variable- the amount of tip
• Null Hypothesis: The relationship and association between the total bill quantity at a family or dining restaurant and the tip, is the same.

Try to answer the quiz below to check what you have learned so far about the null hypothesis.

Choose the best answer. 

Send Your Results (Optional)

• Blackwelder, W. C. (1982). “Proving the null hypothesis” in clinical trials. Controlled Clinical Trials , 3(4), 345–353.
• Frick, R. W. (1995). Accepting the null hypothesis. Memory & Cognition, 23(1), 132–138.
• Gill, J. (1999). The insignificance of null hypothesis significance testing. Political Research Quarterly , 52(3), 647–674.
• Killeen, P. R. (2005). An alternative to null-hypothesis significance tests. Psychological Science, 16(5), 345–353.

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Last updated on June 16th, 2022

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Hypothesis testing involves the careful construction of two statements: the null hypothesis and the alternative hypothesis. These hypotheses can look very similar but are actually different.

How do we know which hypothesis is the null and which one is the alternative? We will see that there are a few ways to tell the difference.

The Null Hypothesis

The null hypothesis reflects that there will be no observed effect in our experiment. In a mathematical formulation of the null hypothesis, there will typically be an equal sign. This hypothesis is denoted by H 0 .

The null hypothesis is what we attempt to find evidence against in our hypothesis test. We hope to obtain a small enough p-value that it is lower than our level of significance alpha and we are justified in rejecting the null hypothesis. If our p-value is greater than alpha, then we fail to reject the null hypothesis.

If the null hypothesis is not rejected, then we must be careful to say what this means. The thinking on this is similar to a legal verdict. Just because a person has been declared "not guilty", it does not mean that he is innocent. In the same way, just because we failed to reject a null hypothesis it does not mean that the statement is true.

For example, we may want to investigate the claim that despite what convention has told us, the mean adult body temperature is not the accepted value of 98.6 degrees Fahrenheit . The null hypothesis for an experiment to investigate this is “The mean adult body temperature for healthy individuals is 98.6 degrees Fahrenheit.” If we fail to reject the null hypothesis, then our working hypothesis remains that the average adult who is healthy has a temperature of 98.6 degrees. We do not prove that this is true.

If we are studying a new treatment, the null hypothesis is that our treatment will not change our subjects in any meaningful way. In other words, the treatment will not produce any effect in our subjects.

The Alternative Hypothesis

The alternative or experimental hypothesis reflects that there will be an observed effect for our experiment. In a mathematical formulation of the alternative hypothesis, there will typically be an inequality, or not equal to symbol. This hypothesis is denoted by either H a or by H 1 .

The alternative hypothesis is what we are attempting to demonstrate in an indirect way by the use of our hypothesis test. If the null hypothesis is rejected, then we accept the alternative hypothesis. If the null hypothesis is not rejected, then we do not accept the alternative hypothesis. Going back to the above example of mean human body temperature, the alternative hypothesis is “The average adult human body temperature is not 98.6 degrees Fahrenheit.”

If we are studying a new treatment, then the alternative hypothesis is that our treatment does, in fact, change our subjects in a meaningful and measurable way.

The following set of negations may help when you are forming your null and alternative hypotheses. Most technical papers rely on just the first formulation, even though you may see some of the others in a statistics textbook.

• Null hypothesis: “ x is equal to y .” Alternative hypothesis “ x is not equal to y .”
• Null hypothesis: “ x is at least y .” Alternative hypothesis “ x is less than y .”
• Null hypothesis: “ x is at most y .” Alternative hypothesis “ x is greater than y .”
• What 'Fail to Reject' Means in a Hypothesis Test
• Type I and Type II Errors in Statistics
• An Example of a Hypothesis Test
• The Runs Test for Random Sequences
• An Example of Chi-Square Test for a Multinomial Experiment
• The Difference Between Type I and Type II Errors in Hypothesis Testing
• What Level of Alpha Determines Statistical Significance?
• What Is the Difference Between Alpha and P-Values?
• What Is ANOVA?
• How to Find Critical Values with a Chi-Square Table
• Example of a Permutation Test
• Degrees of Freedom for Independence of Variables in Two-Way Table
• Example of an ANOVA Calculation
• How to Find Degrees of Freedom in Statistics
• How to Construct a Confidence Interval for a Population Proportion
• Degrees of Freedom in Statistics and Mathematics

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null hypothesis

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Null Hypothesis

Null Hypothesis , often denoted as H 0, is a foundational concept in statistical hypothesis testing. It represents an assumption that no significant difference, effect, or relationship exists between variables within a population. It serves as a baseline assumption, positing no observed change or effect occurring. The null is t he truth or falsity of an idea in analysis.

In this article, we will discuss the null hypothesis in detail, along with some solved examples and questions on the null hypothesis.

Table of Content

What is Null Hypothesis?

Null hypothesis symbol, formula of null hypothesis, types of null hypothesis, null hypothesis examples, principle of null hypothesis, how do you find null hypothesis, null hypothesis in statistics, null hypothesis and alternative hypothesis, null hypothesis and alternative hypothesis examples, null hypothesis – practice problems.

Null Hypothesis in statistical analysis suggests the absence of statistical significance within a specific set of observed data. Hypothesis testing, using sample data, evaluates the validity of this hypothesis. Commonly denoted as H 0 or simply “null,” it plays an important role in quantitative analysis, examining theories related to markets, investment strategies, or economies to determine their validity.

Null Hypothesis Meaning

Null Hypothesis represents a default position, often suggesting no effect or difference, against which researchers compare their experimental results. The Null Hypothesis, often denoted as H 0 asserts a default assumption in statistical analysis. It posits no significant difference or effect, serving as a baseline for comparison in hypothesis testing.

The null Hypothesis is represented as H 0 , the Null Hypothesis symbolizes the absence of a measurable effect or difference in the variables under examination.

Certainly, a simple example would be asserting that the mean score of a group is equal to a specified value like stating that the average IQ of a population is 100.

The Null Hypothesis is typically formulated as a statement of equality or absence of a specific parameter in the population being studied. It provides a clear and testable prediction for comparison with the alternative hypothesis. The formulation of the Null Hypothesis typically follows a concise structure, stating the equality or absence of a specific parameter in the population.

Mean Comparison (Two-sample t-test)

H 0 : μ 1 = μ 2

This asserts that there is no significant difference between the means of two populations or groups.

Proportion Comparison

H 0 : p 1 − p 2 = 0

This suggests no significant difference in proportions between two populations or conditions.

Equality in Variance (F-test in ANOVA)

H 0 : σ 1 = σ 2

This states that there’s no significant difference in variances between groups or populations.

Independence (Chi-square Test of Independence):

H 0 : Variables are independent

This asserts that there’s no association or relationship between categorical variables.

Null Hypotheses vary including simple and composite forms, each tailored to the complexity of the research question. Understanding these types is pivotal for effective hypothesis testing.

Equality Null Hypothesis (Simple Null Hypothesis)

The Equality Null Hypothesis, also known as the Simple Null Hypothesis, is a fundamental concept in statistical hypothesis testing that assumes no difference, effect or relationship between groups, conditions or populations being compared.

Non-Inferiority Null Hypothesis

In some studies, the focus might be on demonstrating that a new treatment or method is not significantly worse than the standard or existing one.

Superiority Null Hypothesis

The concept of a superiority null hypothesis comes into play when a study aims to demonstrate that a new treatment, method, or intervention is significantly better than an existing or standard one.

Independence Null Hypothesis

In certain statistical tests, such as chi-square tests for independence, the null hypothesis assumes no association or independence between categorical variables.

Homogeneity Null Hypothesis

In tests like ANOVA (Analysis of Variance), the null hypothesis suggests that there’s no difference in population means across different groups.

• Medicine: Null Hypothesis: “No significant difference exists in blood pressure levels between patients given the experimental drug versus those given a placebo.”
• Education: Null Hypothesis: “There’s no significant variation in test scores between students using a new teaching method and those using traditional teaching.”
• Economics: Null Hypothesis: “There’s no significant change in consumer spending pre- and post-implementation of a new taxation policy.”
• Environmental Science: Null Hypothesis: “There’s no substantial difference in pollution levels before and after a water treatment plant’s establishment.”

The principle of the null hypothesis is a fundamental concept in statistical hypothesis testing. It involves making an assumption about the population parameter or the absence of an effect or relationship between variables.

In essence, the null hypothesis (H 0 ) proposes that there is no significant difference, effect, or relationship between variables. It serves as a starting point or a default assumption that there is no real change, no effect or no difference between groups or conditions.

The null hypothesis is usually formulated to be tested against an alternative hypothesis (H 1 or H [Tex]\alpha [/Tex] ) which suggests that there is an effect, difference or relationship present in the population.

Null Hypothesis Rejection

Rejecting the Null Hypothesis occurs when statistical evidence suggests a significant departure from the assumed baseline. It implies that there is enough evidence to support the alternative hypothesis, indicating a meaningful effect or difference. Null Hypothesis rejection occurs when statistical evidence suggests a deviation from the assumed baseline, prompting a reconsideration of the initial hypothesis.

Identifying the Null Hypothesis involves defining the status quotient, asserting no effect and formulating a statement suitable for statistical analysis.

When is Null Hypothesis Rejected?

The Null Hypothesis is rejected when statistical tests indicate a significant departure from the expected outcome, leading to the consideration of alternative hypotheses. It occurs when statistical evidence suggests a deviation from the assumed baseline, prompting a reconsideration of the initial hypothesis.

In statistical hypothesis testing, researchers begin by stating the null hypothesis, often based on theoretical considerations or previous research. The null hypothesis is then tested against an alternative hypothesis (Ha), which represents the researcher’s claim or the hypothesis they seek to support.

The process of hypothesis testing involves collecting sample data and using statistical methods to assess the likelihood of observing the data if the null hypothesis were true. This assessment is typically done by calculating a test statistic, which measures the difference between the observed data and what would be expected under the null hypothesis.

In the realm of hypothesis testing, the null hypothesis (H 0 ) and alternative hypothesis (H₁ or Ha) play critical roles. The null hypothesis generally assumes no difference, effect, or relationship between variables, suggesting that any observed change or effect is due to random chance. Its counterpart, the alternative hypothesis, asserts the presence of a significant difference, effect, or relationship between variables, challenging the null hypothesis. These hypotheses are formulated based on the research question and guide statistical analyses.

Difference Between Null Hypothesis and Alternative Hypothesis

The null hypothesis (H 0 ) serves as the baseline assumption in statistical testing, suggesting no significant effect, relationship, or difference within the data. It often proposes that any observed change or correlation is merely due to chance or random variation. Conversely, the alternative hypothesis (H 1 or Ha) contradicts the null hypothesis, positing the existence of a genuine effect, relationship or difference in the data. It represents the researcher’s intended focus, seeking to provide evidence against the null hypothesis and support for a specific outcome or theory. These hypotheses form the crux of hypothesis testing, guiding the assessment of data to draw conclusions about the population being studied.

Let’s envision a scenario where a researcher aims to examine the impact of a new medication on reducing blood pressure among patients. In this context:

Null Hypothesis (H 0 ): “The new medication does not produce a significant effect in reducing blood pressure levels among patients.”

Alternative Hypothesis (H 1 or Ha): “The new medication yields a significant effect in reducing blood pressure levels among patients.”

The null hypothesis implies that any observed alterations in blood pressure subsequent to the medication’s administration are a result of random fluctuations rather than a consequence of the medication itself. Conversely, the alternative hypothesis contends that the medication does indeed generate a meaningful alteration in blood pressure levels, distinct from what might naturally occur or by random chance.

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Example 1: A researcher claims that the average time students spend on homework is 2 hours per night.

Null Hypothesis (H 0 ): The average time students spend on homework is equal to 2 hours per night. Data: A random sample of 30 students has an average homework time of 1.8 hours with a standard deviation of 0.5 hours. Test Statistic and Decision: Using a t-test, if the calculated t-statistic falls within the acceptance region, we fail to reject the null hypothesis. If it falls in the rejection region, we reject the null hypothesis. Conclusion: Based on the statistical analysis, we fail to reject the null hypothesis, suggesting that there is not enough evidence to dispute the claim of the average homework time being 2 hours per night.

Example 2: A company asserts that the error rate in its production process is less than 1%.

Null Hypothesis (H 0 ): The error rate in the production process is 1% or higher. Data: A sample of 500 products shows an error rate of 0.8%. Test Statistic and Decision: Using a z-test, if the calculated z-statistic falls within the acceptance region, we fail to reject the null hypothesis. If it falls in the rejection region, we reject the null hypothesis. Conclusion: The statistical analysis supports rejecting the null hypothesis, indicating that there is enough evidence to dispute the company’s claim of an error rate of 1% or higher.

Q1. A researcher claims that the average time spent by students on homework is less than 2 hours per day. Formulate the null hypothesis for this claim?

Q2. A manufacturing company states that their new machine produces widgets with a defect rate of less than 5%. Write the null hypothesis to test this claim?

Q3. An educational institute believes that their online course completion rate is at least 60%. Develop the null hypothesis to validate this assertion?

Q4. A restaurant claims that the waiting time for customers during peak hours is not more than 15 minutes. Formulate the null hypothesis for this claim?

Q5. A study suggests that the mean weight loss after following a specific diet plan for a month is more than 8 pounds. Construct the null hypothesis to evaluate this statement?

Summary – Null Hypothesis and Alternative Hypothesis

The null hypothesis (H 0 ) and alternative hypothesis (H a ) are fundamental concepts in statistical hypothesis testing. The null hypothesis represents the default assumption, stating that there is no significant effect, difference, or relationship between variables. It serves as the baseline against which the alternative hypothesis is tested. In contrast, the alternative hypothesis represents the researcher’s hypothesis or the claim to be tested, suggesting that there is a significant effect, difference, or relationship between variables. The relationship between the null and alternative hypotheses is such that they are complementary, and statistical tests are conducted to determine whether the evidence from the data is strong enough to reject the null hypothesis in favor of the alternative hypothesis. This decision is based on the strength of the evidence and the chosen level of significance. Ultimately, the choice between the null and alternative hypotheses depends on the specific research question and the direction of the effect being investigated.

FAQs on Null Hypothesis

What does null hypothesis stands for.

The null hypothesis, denoted as H 0 ​, is a fundamental concept in statistics used for hypothesis testing. It represents the statement that there is no effect or no difference, and it is the hypothesis that the researcher typically aims to provide evidence against.

How to Form a Null Hypothesis?

A null hypothesis is formed based on the assumption that there is no significant difference or effect between the groups being compared or no association between variables being tested. It often involves stating that there is no relationship, no change, or no effect in the population being studied.

When Do we reject the Null Hypothesis?

In statistical hypothesis testing, if the p-value (the probability of obtaining the observed results) is lower than the chosen significance level (commonly 0.05), we reject the null hypothesis. This suggests that the data provides enough evidence to refute the assumption made in the null hypothesis.

What is a Null Hypothesis in Research?

In research, the null hypothesis represents the default assumption or position that there is no significant difference or effect. Researchers often try to test this hypothesis by collecting data and performing statistical analyses to see if the observed results contradict the assumption.

What Are Alternative and Null Hypotheses?

The null hypothesis (H0) is the default assumption that there is no significant difference or effect. The alternative hypothesis (H1 or Ha) is the opposite, suggesting there is a significant difference, effect or relationship.

What Does it Mean to Reject the Null Hypothesis?

Rejecting the null hypothesis implies that there is enough evidence in the data to support the alternative hypothesis. In simpler terms, it suggests that there might be a significant difference, effect or relationship between the groups or variables being studied.

How to Find Null Hypothesis?

Formulating a null hypothesis often involves considering the research question and assuming that no difference or effect exists. It should be a statement that can be tested through data collection and statistical analysis, typically stating no relationship or no change between variables or groups.

How is Null Hypothesis denoted?

The null hypothesis is commonly symbolized as H 0 in statistical notation.

What is the Purpose of the Null hypothesis in Statistical Analysis?

The null hypothesis serves as a starting point for hypothesis testing, enabling researchers to assess if there’s enough evidence to reject it in favor of an alternative hypothesis.

What happens if we Reject the Null hypothesis?

Rejecting the null hypothesis implies that there is sufficient evidence to support an alternative hypothesis, suggesting a significant effect or relationship between variables.

What are Test for Null Hypothesis?

Various statistical tests, such as t-tests or chi-square tests, are employed to evaluate the validity of the Null Hypothesis in different scenarios.

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9.1 Null and Alternative Hypotheses

The actual test begins by considering two hypotheses . They are called the null hypothesis and the alternative hypothesis . These hypotheses contain opposing viewpoints.

H 0 : The null hypothesis: It is a statement of no difference between the variables—they are not related. This can often be considered the status quo and as a result if you cannot accept the null it requires some action.

H a : The alternative hypothesis: It is a claim about the population that is contradictory to H 0 and what we conclude when we reject H 0 . This is usually what the researcher is trying to prove.

Since the null and alternative hypotheses are contradictory, you must examine evidence to decide if you have enough evidence to reject the null hypothesis or not. The evidence is in the form of sample data.

After you have determined which hypothesis the sample supports, you make a decision. There are two options for a decision. They are "reject H 0 " if the sample information favors the alternative hypothesis or "do not reject H 0 " or "decline to reject H 0 " if the sample information is insufficient to reject the null hypothesis.

Mathematical Symbols Used in H 0 and H a :

H 0 always has a symbol with an equal in it. H a never has a symbol with an equal in it. The choice of symbol depends on the wording of the hypothesis test. However, be aware that many researchers (including one of the co-authors in research work) use = in the null hypothesis, even with > or < as the symbol in the alternative hypothesis. This practice is acceptable because we only make the decision to reject or not reject the null hypothesis.

Example 9.1

H 0 : No more than 30% of the registered voters in Santa Clara County voted in the primary election. p ≤ .30 H a : More than 30% of the registered voters in Santa Clara County voted in the primary election. p > 30

A medical trial is conducted to test whether or not a new medicine reduces cholesterol by 25%. State the null and alternative hypotheses.

Example 9.2

We want to test whether the mean GPA of students in American colleges is different from 2.0 (out of 4.0). The null and alternative hypotheses are: H 0 : μ = 2.0 H a : μ ≠ 2.0

We want to test whether the mean height of eighth graders is 66 inches. State the null and alternative hypotheses. Fill in the correct symbol (=, ≠, ≥, <, ≤, >) for the null and alternative hypotheses.

• H 0 : μ __ 66
• H a : μ __ 66

Example 9.3

We want to test if college students take less than five years to graduate from college, on the average. The null and alternative hypotheses are: H 0 : μ ≥ 5 H a : μ < 5

We want to test if it takes fewer than 45 minutes to teach a lesson plan. State the null and alternative hypotheses. Fill in the correct symbol ( =, ≠, ≥, <, ≤, >) for the null and alternative hypotheses.

• H 0 : μ __ 45
• H a : μ __ 45

Example 9.4

In an issue of U. S. News and World Report , an article on school standards stated that about half of all students in France, Germany, and Israel take advanced placement exams and a third pass. The same article stated that 6.6% of U.S. students take advanced placement exams and 4.4% pass. Test if the percentage of U.S. students who take advanced placement exams is more than 6.6%. State the null and alternative hypotheses. H 0 : p ≤ 0.066 H a : p > 0.066

On a state driver’s test, about 40% pass the test on the first try. We want to test if more than 40% pass on the first try. Fill in the correct symbol (=, ≠, ≥, <, ≤, >) for the null and alternative hypotheses.

• H 0 : p __ 0.40
• H a : p __ 0.40

Collaborative Exercise

Bring to class a newspaper, some news magazines, and some Internet articles . In groups, find articles from which your group can write null and alternative hypotheses. Discuss your hypotheses with the rest of the class.

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What Is a Null Hypothesis?

The alternative hypothesis.

• Additional Examples
• Null Hypothesis and Investments

The Bottom Line

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Null Hypothesis: What Is It, and How Is It Used in Investing?

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

A null hypothesis is a type of statistical hypothesis that proposes that no statistical significance exists in a set of given observations. Hypothesis testing is used to assess the credibility of a hypothesis by using sample data. Sometimes referred to simply as the “null,” it is represented as H 0 .

The null hypothesis, also known as “the conjecture,” is used in quantitative analysis to test theories about markets, investing strategies, and economies to decide if an idea is true or false.

Key Takeaways

• A null hypothesis is a type of conjecture in statistics that proposes that there is no difference between certain characteristics of a population or data-generating process.
• The alternative hypothesis proposes that there is a difference.
• Hypothesis testing provides a method to reject a null hypothesis within a certain confidence level.
• If you can reject the null hypothesis, it provides support for the alternative hypothesis.
• Null hypothesis testing is the basis of the principle of falsification in science.

Alex Dos Diaz / Investopedia

Understanding a Null Hypothesis

A gambler may be interested in whether a game of chance is fair. If it is, then the expected earnings per play come to zero for both players. If it is not, then the expected earnings are positive for one player and negative for the other.

To test whether the game is fair, the gambler collects earnings data from many repetitions of the game, calculates the average earnings from these data, then tests the null hypothesis that the expected earnings are not different from zero.

If the average earnings from the sample data are sufficiently far from zero, then the gambler will reject the null hypothesis and conclude the alternative hypothesis—namely, that the expected earnings per play are different from zero. If the average earnings from the sample data are near zero, then the gambler will not reject the null hypothesis, concluding instead that the difference between the average from the data and zero is explainable by chance alone.

A null hypothesis can only be rejected, not proven.

The null hypothesis assumes that any kind of difference between the chosen characteristics that you see in a set of data is due to chance. For example, if the expected earnings for the gambling game are truly equal to zero, then any difference between the average earnings in the data and zero is due to chance.

Analysts look to reject   the null hypothesis because doing so is a strong conclusion. This requires evidence in the form of an observed difference that is too large to be explained solely by chance. Failing to reject the null hypothesis—that the results are explainable by chance alone—is a weak conclusion because it allows that while factors other than chance may be at work, they may not be strong enough for the statistical test to detect them.

An important point to note is that we are testing the null hypothesis because there is an element of doubt about its validity. Whatever information that is against the stated null hypothesis is captured in the alternative (alternate) hypothesis (H 1 ).

For the examples below, the alternative hypothesis would be:

• Students score an average that is not equal to seven.
• The mean annual return of a mutual fund is not equal to 8% per year.

In other words, the alternative hypothesis is a direct contradiction of the null hypothesis.

Null Hypothesis Examples

Here is a simple example: A school principal claims that students in her school score an average of seven out of 10 in exams. The null hypothesis is that the population mean is not 7.0. To test this null hypothesis, we record marks of, say, 30 students ( sample ) from the entire student population of the school (say, 300) and calculate the mean of that sample.

We can then compare the (calculated) sample mean to the (hypothesized) population mean of 7.0 and attempt to reject the null hypothesis. (The null hypothesis here—that the population mean is not 7.0—cannot be proved using the sample data. It can only be rejected.)

Take another example: The annual return of a particular  mutual fund  is claimed to be 8%. Assume that the mutual fund has been in existence for 20 years. The null hypothesis is that the mean return is not 8% for the mutual fund. We take a random sample of annual returns of the mutual fund for, say, five years (sample) and calculate the sample mean. We then compare the (calculated) sample mean to the (claimed) population mean (8%) to test the null hypothesis.

For the above examples, null hypotheses are:

• Example A: Students in the school don’t score an average of seven out of 10 in exams.
• Example B: The mean annual return of the mutual fund is not 8% per year.

For the purposes of determining whether to reject the null hypothesis (abbreviated H0), said hypothesis is assumed, for the sake of argument, to be true. Then the likely range of possible values of the calculated statistic (e.g., the average score on 30 students’ tests) is determined under this presumption (e.g., the range of plausible averages might range from 6.2 to 7.8 if the population mean is 7.0).

If the sample average is outside of this range, the null hypothesis is rejected. Otherwise, the difference is said to be “explainable by chance alone,” being within the range that is determined by chance alone.

How Null Hypothesis Testing Is Used in Investments

As an example related to financial markets, assume Alice sees that her investment strategy produces higher average returns than simply buying and holding a stock . The null hypothesis states that there is no difference between the two average returns, and Alice is inclined to believe this until she can conclude contradictory results.

Refuting the null hypothesis would require showing statistical significance, which can be found by a variety of tests. The alternative hypothesis would state that the investment strategy has a higher average return than a traditional buy-and-hold strategy.

One tool that can determine the statistical significance of the results is the p-value. A p-value represents the probability that a difference as large or larger than the observed difference between the two average returns could occur solely by chance.

A p-value that is less than or equal to 0.05 often indicates whether there is evidence against the null hypothesis. If Alice conducts one of these tests, such as a test using the normal model, resulting in a significant difference between her returns and the buy-and-hold returns (the p-value is less than or equal to 0.05), she can then reject the null hypothesis and conclude the alternative hypothesis.

How Is the Null Hypothesis Identified?

The analyst or researcher establishes a null hypothesis based on the research question or problem they are trying to answer. Depending on the question, the null may be identified differently. For example, if the question is simply whether an effect exists (e.g., does X influence Y?), the null hypothesis could be H 0 : X = 0. If the question is instead, is X the same as Y, the H 0 would be X = Y. If it is that the effect of X on Y is positive, H 0 would be X > 0. If the resulting analysis shows an effect that is statistically significantly different from zero, the null can be rejected.

How Is Null Hypothesis Used in Finance?

In finance , a null hypothesis is used in quantitative analysis. It tests the premise of an investing strategy, the markets, or an economy to determine if it is true or false.

For instance, an analyst may want to see if two stocks, ABC and XYZ, are closely correlated. The null hypothesis would be ABC ≠ XYZ.

How Are Statistical Hypotheses Tested?

Statistical hypotheses are tested by a four-step process . The first is for the analyst to state the two hypotheses so that only one can be right. The second is to formulate an analysis plan, which outlines how the data will be evaluated. The third 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 claim that the observed differences are explainable by chance alone.

What Is an Alternative Hypothesis?

An alternative hypothesis is a direct contradiction of a null hypothesis. This means that if one of the two hypotheses is true, the other is false.

A null hypothesis states there is no difference between groups or relationship between variables. It is a type of statistical hypothesis and proposes that no statistical significance exists in a set of given observations. “Null” means nothing.

The null hypothesis is used in quantitative analysis to test theories about economies, investing strategies, and markets to decide if an idea is true or false. Hypothesis testing assesses the credibility of a hypothesis by using sample data. It is represented as H 0 and is sometimes simply known as “the null.”

Sage Publishing. “ Chapter 8: Introduction to Hypothesis Testing ,” Page 4.

Sage Publishing. “ Chapter 8: Introduction to Hypothesis Testing ,” Pages 4 to 7.

Sage Publishing. “ Chapter 8: Introduction to Hypothesis Testing ,” Page 7.

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