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5 step hypothesis non parametric testing

Hypothesis statement: difference in the selling price of a house with a pool (M1) in relation to one without a pool (M2).

Based on the research question from which this hypothesis was formulated the numerical and verbal hypothesis is:
H₀: M1=M2, or M1- M2 = 0
H₁: M1≠M2, or M1-M2 ≠0

Conduct the equivalent, nonparametric test of hypothesis using the five-step process.

Solution Preview

Hypothesis testing is a five step process which are as follows:

1. The first step is to specify the null hypothesis (H0) and the alternative hypothesis (H1). In this case, the null hypothesis

is that the distribution of prices for houses with a pool and those without a pool are identical. The alternate hypothesis is

that they are different.

2. The next step is to select a significance level. Typically the 0.05 or the 0.01 level is used. This gives you the tolerance

you have for chance deviations if the null hypothesis were true.

3. The third step is to calculate a statistic U = f(D1, D2) would be computed where f is some function and D1 and D2 are the

data in the 2 groups.

4. The fourth step is to calculate the probability value (often called the p value). The p value is the probability of obtaining a

statistic as different or more different from the parameter specified in the null hypothesis as the statistic computed from

the data. The calculations are made assuming that the null hypothesis is ...

Solution Summary

How to conduct a 5 step hypothesis testing using a Mann Whitney non parametric test?