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Monday, October 1, 2012

Alphas, P-Values, and Confidence Intervals, Oh My!

Monday, October 1, 2012 by Michelle Paret
   
Wizard of OzTrying to remember what the alpha-level, p-value, and confidence interval all mean for a hypothesis test—and how they relate to one another—can seem about as daunting as Dorothy’s trek down the yellow brick road.
Rather than sitting through a semester of Intro Stats, let's get right to the point and explain in clear language what all these statistical terms mean and how they relate to one another.

alphaWhat Does Alpha Mean in a Hypothesis Test?

Before you run any statistical test, you must first determine your alpha level, which is also called the “significance level.” By definition, the alpha level is the probability of rejecting the null hypothesis when the null hypothesis is true.
Translation: It’s the probability of making a wrong decision.
Thanks...
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