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.