how a type i error works
hypothesis testing is a testing process that uses sample data the test is designed to provide evidence that the hypothesis or conjecture is supported by the data being tested a null hypothesis is a belief that there is no statistical significance or effect between the two data sets variables or populations being considered in the hypothesis a researcher would generally try to disprove the null hypothesis for example let s say the null hypothesis states that an investment strategy doesn t perform any better than a market index like the s p 500 the researcher would take samples of data and test the historical performance of the investment strategy to determine if the strategy performed at a higher level than the s p if the test results show that the strategy performed at a higher rate than the index the null hypothesis is rejected this condition is denoted as n 0 if the result seems to indicate that the stimuli applied to the test subject caused a reaction when the test is conducted the null hypothesis stating that the stimuli do not affect the test subject then needs to be rejected a null hypothesis should ideally never be rejected if it s found to be true it should always be rejected if it s found to be false however there are situations when errors can occur false positive type i errora type i error is also called a false positive result this result leads to an incorrect rejection of the null hypothesis it rejects an idea that shouldn t have been rejected in the first place rejecting the null hypothesis under the assumption that there is no relationship between the test subject the stimuli and the outcome may sometimes be incorrect if something other than the stimuli causes the outcome of the test it can cause a false positive result 1examples of type i errorslet s look at a couple of hypothetical examples to show how type i errors occur type i errors commonly occur in criminal trials where juries are required to come up with a verdict of either innocent or guilty in this case the null hypothesis is that the person is innocent while the alternative is guilty a jury may come up with a type i error if the members find that the person is found guilty and is sent to jail despite actually being innocent in medical testing a type i error would cause the appearance that a treatment for a disease has the effect of reducing the severity of the disease when in fact it does not when a new medicine is being tested the null hypothesis will be that the medicine does not affect the progression of the disease let s say a lab is researching a new cancer drug their null hypothesis might be that the drug does not affect the growth rate of cancer cells after applying the drug to the cancer cells the cancer cells stop growing this would cause the researchers to reject their null hypothesis that the drug would have no effect if the drug caused the growth stoppage the conclusion to reject the null in this case would be correct however if something else during the test caused the growth stoppage instead of the administered drug this would be an example of an incorrect rejection of the null hypothesis i e a type i error 