Tony’s father, an accountant, has been listening to Tony tell him about Type I errors and α = .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 α level to something more reasonable, say .001 or .0001!”

Question

Tony’s father, an accountant, has been listening to Tony tell him about Type I errors and α = .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 α level to something more reasonable, say .001 or .0001!”
(a) Is Tony ’s father’s interpretation that an alpha level of 5% means you will commit errors 5% of the time correct? Explain. 
(b) What are the advantages and/or disadvantages of doing what Tony’s father suggests?

PsyDAG · Answer

a) Alpha = .05 means that the probability of rejecting the null hypothesis in error = 5%. By accepting the alternate hypothesis, you are assuming that these results are not included in that 5%.

b) It will reduce the probability of alpha error, but it will increase the probability of beta error, accepting the null hypothesis when it is not true.