Null vs. Alternative Hypothesis

Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

Difference between Null Hypothesis and Alternative Hypothesis

The null and alternative hypothesis represents two opposing suppositions or statements used in statistical tests. The key difference is that the null hypothesis disapproves of the phenomenon or event put forth by the alternative hypothesis or research hypothesis. So, the statement defining the null hypothesis is tested in a statistical test like a t-test and linear regression. The statement explaining the alternative hypothesis is tested against the null hypothesis. Proving the null hypothesis points to the rejection of the alternative hypothesis.

Null-Hypothesis-vs-Alternative-Hypothesis

You are free to use this image on your website, templates, etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Null vs. Alternative Hypothesis (wallstreetmojo.com)

Key Takeaways

  • In null vs. alternative hypothesesthe two hypotheses exemplify the opposing statements in a statistical test. The null hypothesis is a “no effect” statement, and the alternative hypothesis is a statement defining the “effect.”
  • Null vs. alternative hypothesis symbols: Null hypothesis is denoted by the symbol H0, and H1 or Ha denotes the alternative hypothesis. 
  • The alternative hypothesis can be one-sided (directional) or two-sided (non-directional). The main types of null hypotheses are simple, composite, exact, and inexact hypotheses.
  • The null hypothesis is favored if the p-value is higher than the statistical significance level. In contrast, the alternate hypothesis is favored if the p-value is lower than the statistical significance level.
Financial Modeling & Valuation Courses Bundle (25+ Hours Video Series)

–>> If you want to learn Financial Modeling & Valuation professionally , then do check this ​Financial Modeling & Valuation Course Bundle​ (25+ hours of video tutorials with step by step McDonald’s Financial Model). Unlock the art of financial modeling and valuation with a comprehensive course covering McDonald’s forecast methodologies, advanced valuation techniques, and financial statements.

Null vs. Alternative Hypothesis – Comparative Table

ParticularsNull HypothesisAlternative Hypothesis
MeaningIt refers to the statement suggesting the absence of statistical significance and opposing the alternative hypothesis.It is the proposed theory or postulation in a hypothesis test.
Accept or rejectAccepting a null hypothesis dismisses the alternative hypothesis and indicates no statistical significance.Accepting the alternative hypothesis involves rejecting the null hypothesis and indicates statistical significance.
ImportanceIt disapproves of the central idea; researchers work to reject the null hypothesis.It is the prime statement or argument. So the researcher works to prove an alternative hypothesis.
P-valueThe null hypothesis is favored if the p-value is higher than the statistical significance level.The alternate hypothesis is favored if the p-value is lower than the statistical significance level.
RelationshipStates that there is no relationship between the variables.States that a relationship exists between variables.
ObservationIf results or effects are observed, they are caused by chance.If results or effects are observed, they are an outcome of a real cause.
Denoted byH0H1

What is Null Hypothesis?

The null hypothesis is denoted by the symbol H0. It implies that there is no effect on the population and that is dependent variable is not influenced by the independent variable in the study. According to the null hypothesis, the result or effect is caused by chance and establishes no relation between the two variables. The null hypothesis is generally based on a previous analysis or specialized knowledge. The main types of null hypotheses are simple, composite, exact, and inexact hypotheses.

To justify the research hypothesis or the argument coined by the researcher, the null hypothesis constructed against the alternative hypothesis must be proved wrong. It can only turn out in two ways, either getting rejected or accepted, depending upon the experimental data and nature of the scenario taken for observation. The null hypothesis is accepted if the statistical test provides no satisfactory evidence proving the anticipated effect on the population. Furthermore, incorrectly rejecting the null hypothesis points to type I error  (false positive conclusion), and incorrectly failing to reject the null hypothesis results in type II error (false negative conclusion).

What is Alternative Hypothesis?

The symbol H1 or Ha denotes the alternative hypothesis. It can be based on limited evidence or belief. It implies the effect on the population; the independent variable influences the dependent variable in the study. The alternative hypothesis can be one-sided (directional) or two (non-directional). 

The alternative hypothesis defines a statistically substantial relationship between the two variables. It can be based on limited evidence or belief. From the researcher’s perspective, this statement stands correct and thus works to reject the contrasting null hypothesis to replace it with the new or improved theory. The researcher predicts the distinguishing factors between the two variables, ensuring that the data observed is not due to chance.

Null vs. alternative hypothesis example statistics:

  • Research question: Does following a healthy diet ensure weight loss?
  • Null hypothesis: Healthy diet has no effect on weight loss
  • Alternative hypothesis: Healthy diet has an effect on weight loss
  • Statistical test output: Consider applying linear regression. If the beta value is equal to zero, then there exists no relationship, and if the beta value is not equal to zero implies the relationship between variables.

Null vs. Alternative Hypothesis – Infographics

Null-Hypothesis-vs-Alternative-Hypothesis-info

You are free to use this image on your website, templates, etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Null vs. Alternative Hypothesis (wallstreetmojo.com)

Similarities

  • Both null and alternative hypotheses are statements used in statistical hypothesis testing.
  • Both can be applied to a single scenario; however, the result and agendas are poles apart.
  • Both the hypotheses used the same route to a conclusion, following the same steps: defining the hypothesis, setting up the criteria, calculating the statistics, and finally arriving at a decision.

This has been a Guide to What is Null vs. Alternative Hypothesis. We explain the statements, differences, infographics, and examples. You can learn more about them from the following articles –

Reader Interactions

Leave a Reply

Your email address will not be published. Required fields are marked *