Question on level of significance (los)

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SUMMARY

The discussion centers on the significance level (los) in hypothesis testing, specifically addressing a P-value of 0.03. When assuming a los of 5%, the null hypothesis is accepted, while a los of 1% leads to its rejection. Participants emphasize that the acceptance of the null hypothesis is contingent on the statistical power, which is often difficult to ascertain. The conversation highlights that industries typically adopt los values of 0.05 or 0.01, advocating for the use of confidence intervals and P-values for more informative results.

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Arceus74
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Suppose the value of P=0.03.
Suppose we assume los is 5%.
Then we will accept null hypothesis.
If suppose we assume los is 1%,then we reject it.
So based on what factors do we assume los and what los do industries follow?
 
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Arceus74 said:
Suppose the value of P=0.03.
Suppose we assume los is 5%.
Then we will accept null hypothesis.

No, we don't. We can only accept the null hypothesis if the power is high enough. And the power is not so easy to know in most cases. The only thing we can conclusively do in hypothesis tests is to reject the null hypothesis, not to accept it.

So based on what factors do we assume los and what los do industries follow?

It's usually 0.05 or 0.01. It's usually more informative to give a confidence interval and p-value anyway, than just saying we accept/reject.
 

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