Economics- Regression and Statistics Help!?

Question

Well I am about to take my econ 309 final in a few days.

It is a upper division stats course.

There is one question that always stumps me.

How do you tell if the question is one-sided or two-sided?

I ask this because I always choose the wrong side. Which throws off my entire answer.

Thanks, to anyone who can help! :)

Answer 1

A statistical test is called two-sided (or two-tailed) if the null hypothesis is rejected for values of the test statistic falling into either tail of its sampling distribution. In other words, the null hypothesis is rejected if the value is either too large or too small.

A statistical test is called one-sided (or one-tailed) if the null hypothesis is rejected only for values of the test statistic falling into one specified tail of its sampling distribution".

For example, if our hypothesis is that the value of your variable  ÃŽÂ¼ is 42.5, the corresponding alternative hypothesis is that μ ≠ 42.5, rejecting the null hypothesis of μ = 42.5 for small or for large values of the sample mean, the test is called two-tailed or two-sided.

In contrast, if our alternative hypothesis is that  ÃŽÂ¼ > 1.4, rejecting the null hypothesis of μ <= 1.4 only for large values of the sample mean, it is then called one-tailed or one-sided.