EXAMPLE 4.2

Significance testing and Type I errors. In Chapter 6, we will learn about significance testing and Type I errors. When we perform a significance test, we have the possibility of making a Type I error under certain circumstances. The significance-testing procedure is set up so that the probability of making this kind of error is small, usually 5%. If we perform a large number of significance tests under this set of circumstances, the proportion of times that we will make a Type I error is 0.05.