ABSTRACT
This chapter describes some of the concepts that are important to understanding hypothesis testing, and outlines the hypothesis testing procedure and apply it to testing a relatively simple hypothesis. The hypothesis testing procedure concludes that the population as a group does have a preferred tax. Critics of hypothesis testing argue that confidence intervals are a better analytical tool because they provide more information than hypothesis testing provides, and they do so without making a ridiculous assumption that is certainly false. Although there are criticisms of hypothesis testing, and some researchers believe hypothesis testing should be abandoned entirely, it is unlikely that hypothesis testing will go away so readers need to be comfortable with the ideas and methods to be described throughout this book. Confidence intervals are a way of handling the fact that a point estimate is almost certainly wrong when randomly sampling from a population.
