Supplementary Exercise 6.70 of IPS7e ------------------------------------ (a) The description does not give us any sense of what data may have been involved. Let us for the sake of discussion assume that the improvement is represented by a mean parameter mu. Then mu=0 would correspond to no improvement, mu>0 would correspond to a positive improvement and mu<0 would correspond to a worsening of the situation. With this notation, the suggested test setup is H0: mu>0 versus Ha: mu=0. This is contrary to how statistical tests are being set up. The null hypothesis must involve a specific value whereas the alternative hypothesis can be one- or two-sided. The test should have been set up as H0: mu=0 versus Ha: mu>0. (b) The sample mean is a statistic, and hypotheses involve parameters, not statistics. Therefore the description is totally wrong. If the sample mean is our estimate of a population mean mu (which is a parameter), the null hypothesis should have been phrased as H0: mu=value, where value is some value relevant to the problem and not derived from the data. The sample mean could by coincidence happen to be exactly equal to that value, in which case the test outcome will be non-significant. It is however not meaningful to test a hypothesis stating that the population mean equals the sample mean. (c) Statistical significance is relative to a significance level, and the most commonly significance level is 0.05. This means that P-values less than 0.05 are statistically significant, and a P-value of 0.95 is absolutely not significant. Although there is some flexibility in setting the significance level, it would never be set as high as 0.95. The idea of the significance level is to single out events that could not have happened by chance alone. Events with a probability less than 0.95, say for example with a probability of 0.5, can easily happen by chance alone. In practice, the significance level is always close to zero.