For the following purposes, we can carry out the Hypothesis testing in linear regression:
1. To check whether an independent variable (predictor) is significant or not for the prediction of the target variable. Two common methods for this are —
If the p-value of a particular independent variable is greater than a certain threshold (usually 0.05), then that independent variable is insignificant for the prediction of the target variable.
If the value of the regression coefficient corresponding to a particular independent variable is zero, then that variable is insignificant for the predictions of the dependent variable and has no linear relationship with it.
2. To verify whether the calculated regression coefficients i.e, with the help of linear regression algorithm, are good estimators or not of the actual coefficients.