05. Setting Up Hypothesis Tests - Part II

In this video, you learned a few rules for setting up null and alternative hypotheses:

1. The $H_0$ is true before you collect any data.
   
   
2. The $H_0$ usually states there is no effect or that two groups are equal.
   
   
3. The $H_0$ and $H_1$ are competing, non-overlapping hypotheses.
   
   
4. $H_1$ is what we would like to prove to be true.
   
   
5. $H_0$ contains an equal sign of some kind - either =, $\leq$, or $\geq$.
   
   
6. $H_1$ contains the opposition of the null - either $\neq$, $>$, or $<$.

Because we wanted to test if a new page was better than an existing page, we set that up in the alternative. Two indicators are that the null should hold the equality, and the statement we would like to be true should be in the alternative. Therefore, it would look like this:

$H_0: \mu_1 \leq \mu_2$

$H_1: \mu_1 > \mu_2$

Here $\mu_1$ represents the population mean return from the new page. Similarly, $\mu_2$ represents the population mean return from the old page.

Depending on your question of interest, you would change your null and alternative hypotheses to match.