Level of Significance

There are two levels of significance commonly used in statistics.. These are the

A. 5 or, 05 level of significance, and

B. .01 level of significance

The .05 level of significance means the researcher allows 5 error or inversely, it ensures 95reliabilitu.
(Note: the .01 level is equivalent to 2.58)

Types of Error in Statistics

In testing hypothesis, two types of wrong inference can be drawn and must be reckoned with by the
researcher. What are called Type I and Type II errors may be describes as follows:

Type I errors are made when we reject a null hypothesis by marking a difference significant, although no
true different exists.

Type II errors are made when we accept a null hypothesis by marking a difference not significant, when
a true difference actually exists.

The distinction between these two kinds of error can perhaps be made clear in the following way.
Suppose that the difference between two population means ( Mpop1-Mpop2) is actually zero. If our test
of significance when applied to the two sample means lead us to believe that the difference in
population means is significant, we make a Type I error. On the other hand, suppose there is a true
difference between the two population means. Now if our test of significance leads to the judgement
"not significant", we commit a Type II error.
Determining the Reliability of the Sample Mean

If we wish to establish the reliability or trustworthiness of a measure, we need to use standard

error formulas and set up our confidence intervals, either at the .05 or .01 level.

Ex. A survey using samples reveals a mean of 41.25. How well does this statistic predict the true mean of
the population if the total population is 300 and the sample SD is 3.6?

Solution:

A. Determine the Standard Error (SE) of the obtained mean.

𝝈
SEm = √𝑵
3.6 3.6
= √300 = 17.32

SEm = .21

B) Set up the confidence intervals:

at the 1 confidence level at the 5 confidence level

M ± 2.58 M ± 1.96 (SEm)

41.25 ± 2.58 (.21) 41.25 ± 1.96 (.21)

41.25 ±.54 41.25 ±.41

41.25 ± .54 = 41.79 41.25 ± .41 = 41.66

41.25 -- .54 = 40.71 41.25 -- .41 = 40.84

C. State your fiduciary (confidence/trust) probabilities

1. I’m sure 99 times out of 100 that the true mean of the population from which the sample was drawn,
lies anywhere between 40.71 and 41.79

2. I’m sure 99 times out of 100 that the true mean of the population from which the sample was drawn,
lies anywhere between 40.84 and 41.66.
Determining the Reliability of the Sample Standard Deviation
Given: M = 41.25 SD = 3.6 N = 300
a) Determine the Standard Error (SE𝜎) of the Standard Deviation

.𝟕𝟏
SE𝝈 = √𝑵
.𝟕𝟏 .𝟕𝟏
= √𝟑𝟎𝟎 = 𝟏𝟕.𝟑𝟐

SE𝜎 = .04
b. Set up the confidence intervals
at the 1% confidence level at the 5% confidence level
SD ± 2.58 SE𝜎 SD ± 1.96 SE𝜎
3.6 ± 2.58 (.04) 3.6 ± 1.96 (.04)
3.6 ± .10 3.6 ± .08
3.6 ± .10 = 3.7 3.6 ± .08 = 3.68
3.6 -- .10 = 3.5 3.6 -- .10 = 3.52
c. State fiduciary probabilities
1. I’m sure 99% of the time that the true SD of the population from which the sample was drawn lies
anywhere between 3.5 and 3.7
2. I’m sure 99% of the time that the true SD of the population from which the sample was drawn lies
anywhere between 3.5 and 3.68
Other Standard Error Formulas
𝟏.𝟐𝟓𝟑𝝈 𝟏.𝟖𝟓𝟖𝑸
SE + √𝑵
or √𝑵

.𝟕𝟖𝟔𝝈 𝟏.𝟏𝟕 𝑸
SE = √𝑵
or √𝑵

𝟏−𝒓𝟐
SEr = √𝑵

𝑷𝑸
SE% = √ −
𝑵
where P = percentage occurrence of the behavior
Q = (1- P )
N = total number of cases
Stability of a Percentage
Ex. In a study of cheating among elementary school children, 150 or 41.7% of the 360 children from
homes of high socio-economic status were found to have cheated on various tests. Assuming our sample
to be representative of children from good homes, how much confidence can we place in this percentage?
How well does it represent the population percentage?
Solution : P = 41.7% = .414
Q = 1 – P = 1 - .417 = .583
N = 360

𝑃𝑄
SE% = √ −
𝑁
(.417).583) = .243111
=√ 360
√
360
= 0.260 = 2.6%

Using 5% level: % ± 1.96 (SE%)

41.7% ± 1.96 (2.6%) = 41% ± 5.10 = 41.7% + 5.10 = 46.8%
= 41.7% + 5.10 = 46.8%
Ans. We are 95% confident that the percentage of children from good homes who will most likely cheat
in a test is at least 37% and not more than 47%.