In which case would we choose to a one-sided alternative hypothesis over a two-sided alternative hypothesis?
A) It does not matter what type of alternative hypothesis we specify.
B) Choose a one sided alternative hypothesis when the theory and literature suggests either that the coefficient should be greater than zero or that the coefficient should be less than zero.
C) We choose a one sided alternative hypothesis when we have a large sample size.
D) We choose a one sided alternative hypothesis when we specify a low (0.01) alpha.

Question

Quizplus · Accepted Answer

We choose a one-sided alternative hypothesis when the theory and literature suggest either that the coefficient should be greater than zero or that the coefficient should be less than zero. This is because a two-sided alternative hypothesis assumes that the coefficient could be either positive or negative, while a one-sided alternative hypothesis specifies the direction of the effect that we are interested in testing.

In Which Case Would We Choose to a One-Sided Alternative