Intro to Business Statistics

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Type I error

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Intro to Business Statistics

Definition

A Type I error occurs when a true null hypothesis is incorrectly rejected. It is also known as a 'false positive' or 'alpha error'.

5 Must Know Facts For Your Next Test

  1. The probability of committing a Type I error is denoted by $\alpha$, which is the significance level of the test.
  2. Common values for $\alpha$ are 0.05, 0.01, and 0.10, representing the risk of making a Type I error.
  3. Reducing the significance level $\alpha$ decreases the likelihood of a Type I error but increases the risk of a Type II error.
  4. Type I errors can lead to incorrect conclusions that there is an effect or difference when there isn't one.
  5. In hypothesis testing, controlling the Type I error rate is crucial to maintaining the integrity of statistical conclusions.

Review Questions

  • What does it mean to commit a Type I error in hypothesis testing?
  • How does changing the significance level $\alpha$ affect the probability of making a Type I error?
  • Why is controlling for Type I errors important in statistical analysis?
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