Intro to Business Statistics

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Type II error

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Intro to Business Statistics

Definition

A Type II error occurs when a false null hypothesis is not rejected. This means that a real effect or difference is missed.

5 Must Know Facts For Your Next Test

  1. A Type II error is denoted by the symbol $\beta$.
  2. The probability of making a Type II error is inversely related to the power of the test (1 - $\beta$).
  3. Increasing the sample size typically decreases the probability of making a Type II error.
  4. A Type II error can lead to failing to identify a significant finding, which can have serious implications in fields like medicine or business.
  5. Type II errors occur more frequently when the effect size is small.

Review Questions

  • What does a Type II error represent in hypothesis testing?
  • What symbol is used to denote the probability of making a Type II error?
  • How does increasing sample size affect the likelihood of committing a Type II error?
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