The Null and Alternative Hypothesis for The Piggy Bank Options Essay

The Null and Alternative Hypothesis for The Piggy Bank Options - Essay Example Online purchasing is a rising trend in the purchasing behavior of the world population since more people are becoming online users. As of 2006, there were over 1.1 billion online users worldwide. In the United States in the fiscal year 2006, the total e-commerce sales were $106 billion, while the US total retail sales were $3,905 (Plunckett Research, 2007). Online sales to retail sale ratio are 0.027 or 2.7%. This data still does not clear up the purchasing tendencies since the second product offering is sales of clothing. In the same year, 2006, in the United States the overall clothing sales were $214.3 (Plunckett Research, 2007). So far the data provided gives us a better view of how to set up a null hypothesis and alternative hypothesis to create a hypothesis test for the Piggy Bankcard incentive problem. A statistician sets up a null hypothesis in order to test a claim. In reality, the statistician knows there is a more viable solution than the null hypothesis, thus the goal of the test is to reject the null hypothesis in order to go with the alternative hypothesis solution. The market research data could make a person think that considering that total clothes expenditure in the US is double than the US online sales then the most likely scenario is that it is better to go with the clothing store incentive. This is all the data needed to create a null and alternative hypothesis. The null and alternative hypothesis for the Piggy Bank options is illustrated below: Null Hypothesis (Ho) – (U1-U2) = 0.