Critical Values

Definition

Critical values are the threshold values used in hypothesis testing to determine whether to reject or fail to reject the null hypothesis. They represent the boundary between the region where the null hypothesis is accepted and the region where it is rejected, based on the chosen significance level and the test statistic's probability distribution.

5 Must Know Facts For Your Next Test

1. Critical values are determined based on the chosen significance level and the probability distribution of the test statistic, such as the $\chi^2$ (chi-square) distribution.
2. The critical value represents the point on the distribution where the probability of obtaining a test statistic more extreme than the critical value is equal to the significance level.
3. For a one-tailed test, the critical value is the value that separates the rejection region from the non-rejection region on the distribution.
4. For a two-tailed test, the critical values are the values that separate the rejection regions from the non-rejection region on both tails of the distribution.
5. Critical values are used to make decisions about the null hypothesis: if the test statistic falls in the rejection region (beyond the critical value), the null hypothesis is rejected; if the test statistic falls in the non-rejection region (within the critical values), the null hypothesis is not rejected.

Review Questions

• Explain the role of critical values in hypothesis testing, particularly in the context of the $\chi^2$ distribution.
  • Critical values play a crucial role in hypothesis testing by defining the boundary between the region where the null hypothesis is accepted and the region where it is rejected. In the context of the $\chi^2$ distribution, the critical values are determined based on the chosen significance level and the degrees of freedom of the $\chi^2$ statistic. These critical values represent the points on the $\chi^2$ distribution where the probability of obtaining a test statistic more extreme than the critical value is equal to the significance level. If the calculated $\chi^2$ test statistic falls within the critical values, the null hypothesis is not rejected; if the test statistic falls outside the critical values, the null hypothesis is rejected.
• Describe the differences between one-tailed and two-tailed tests in the context of critical values.
  • The critical values for one-tailed and two-tailed tests differ in their interpretation and application. For a one-tailed test, there is only one critical value that separates the rejection region from the non-rejection region on one side of the distribution. In contrast, for a two-tailed test, there are two critical values that separate the rejection regions from the non-rejection region on both tails of the distribution. The choice between a one-tailed or two-tailed test depends on the specific research question and the directionality of the expected effect. The critical values used in the hypothesis test will reflect this choice and determine the decision-making process regarding the null hypothesis.
• Analyze the relationship between the significance level, the critical values, and the decision-making process in hypothesis testing.
  • The significance level, critical values, and decision-making process in hypothesis testing are closely related. The significance level, typically denoted as $\alpha$, represents the maximum acceptable probability of rejecting the null hypothesis when it is true (Type I error). The critical values are determined based on this significance level and the probability distribution of the test statistic. These critical values define the boundary between the region where the null hypothesis is accepted and the region where it is rejected. If the calculated test statistic falls within the critical values, the null hypothesis is not rejected; if the test statistic falls outside the critical values, the null hypothesis is rejected. The choice of significance level, in turn, affects the stringency of the decision-making process, with lower significance levels (e.g., $\alpha = 0.01$) requiring more extreme test statistics to reject the null hypothesis compared to higher significance levels (e.g., $\alpha = 0.05$).

Related terms

Hypothesis Testing: A statistical method used to determine whether a particular claim or hypothesis about a population parameter is supported by sample data.

Null Hypothesis: A statement that there is no significant difference between a population parameter and a hypothesized value or that there is no significant difference between two population parameters.

Significance Level: The probability of rejecting the null hypothesis when it is true, also known as the Type I error rate.