One of the important areas of statistical analysis is testing of hypothesis. Often, in real life situations we require to take decisions about the population on the basis of sample information. Hypothesis testing is also referred to as “Statistical Decision Making”. It employs statistical techniques to arrive at decisions in certain situations where there is an element of uncertainty on the basis of sample, whose size is fixed in advance. So statistics helps us in arriving at the criterion for such decision is known as Testing of hypothesis which was initiated by J. Neyman and E.S. Pearson.
For Example: We may like to decide on the basis of sample data whether a new vaccine is effective in curing cold, whether a new training methodology is better than the existing one, whether the new fertilizer is more productive than the earlier one and so on.