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Significance Level (alpha)

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Definition

The probability of rejecting the Null Hypothesis assuming the null hypothesis is true, also known as a Type I error. It is denoted by the Greek letter α (alpha).

The Confidence level is the complement of the significance level and is associated with the confidence interval containing the likely values of the parameter 100(1-α)% of the time.

Application

We choose the alpha level to be a suitable small value, generally 0.05, to evaluate our test. This is done before conducting the test. The null hypothesis is rejected if the p-value of the test is smaller than the pre-specified alpha.

See Also

Confidence Level, Type I error, Hypothesis Test