A Methods and Statistics student, Lisa, has an accountant for a father. He has b

Question

A Methods and Statistics student, Lisa, has an accountant for a father. He has been listening to Lisa tell him about Type I errors and = .05. He responds: “.05? That means you’re making an error one time in twenty! If I made errors 5 percent of the time I’d be out of a job so fast it would make your head spin! Those psychologists need to shape up and set their level to something more reasonable, say .001 or .0001!” Is Lisa’s father’s interpretation that an alpha level of 5% means you will commit errors 5% of the time correct? Explain (2 points), and in addition making it clear what the advantages and/or disadvantages of doing what Lisa’s father suggests are (3 points).

Explanation / Answer

A type 1 error is the rejection of the null hypothesis which should not have been rejected

A level of 0.05 means that there is a 5 out of 100 times chance that the null hypothesis should not have been rejected but is rejected

Lisa's father suggests that we have made a error 5 percent of the time, the disadvantage of doing what he suggests is that we will be rejecting a lot of null hypothesis than what is actually required i.e. our rejection rate will be 5 and not 0.05 which is 100 times more than the required level

By doing so we will not be arriving at the desired output

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