Basic hypothesis testing

Core concepts¶

Z-Statistic¶

Measures how many standard deviations an observed value (or sample mean) is away from the expected value under the null hypothesis. A large absolute z-value means the observation is far from what you’d expect by chance.

Formula: z = (x̄ − μ) / (σ / √n)

• x̄ sample mean

• μ population mean from null hypothesis

• σ standard deviation

• n sample size