Type 1 Type 2 Errors
A type 1 error is the rejection of a true null hypothesis (false positive) while a type 2 error is the failure of accepting a false null hypothesis (false negative). To think about type 1 and type 2 errors I like to use the example of a drug that treats a disease.
Let' s say the drug doesn't actually work and has no effect on the disease. This is the null hypothesis. A type 1 error would be rejecting that null hypothesis when we actually should have retained it. So in this case, by rejecting it, we're saying that the drug actually has an effect. But in reality the drug actually doesn't. This is a type 1 error.
A type 2 error would be the failure to reject a false null hypothesis. For this example, type 2 would be accepting that the drug actually did work. However we know that it doesn't. This is a type 2 error.
The chances of committing these two types of errors are inversely proportional, decreasing type 1 error increases type 2 error rate and vice versa. Type 1 errors can be controlled. The value of alpha is the probability of a type 1 error occurring and this threshold is usually set at 0.05 (significance level). By doing so we are accepting there is a 5% probability of identifying an effect when actually there isn't one.








