Week 4, DQ 2 Why does the significance level differ among industries? Will the null hypothesis be more likely to be rejected at α = 0.01 than α = 0.10? As the significance level increases to α = 0.10 from α = 0.01, which type error is more likely to occur? What can be done to reduce the likelihood of incurring this error?
Significance levels differ among industries because each industry is concerned with one type error as opposed to the other (there are two errors associated with hypothesis testing-type 1 and type 2).