Balancing Errors in a statistical hypothesis

testing.

 What is Error in Hypothesis Testing? 

 In Hypothesis testing, Error is the estimate of the

approval or rejection of a particular hypothesis. There are
mainly two types of errors in hypothesis testing: 

1. Type I Error(also known as alpha error): Type I error

occurs when we reject the Null hypothesis but the Null
hypothesis is correct. This case is also known as a
false positive.
2. Type II Error(also known as beta error): Type II error
occurs when we fail to remove the Null Hypothesis
when the Null hypothesis is incorrect/the alternative
hypothesis is correct. This case is also known as a
false negative

 Example of a Type I and II Errors.

Example: Jury/Court 

In this example, we are considering the Jury/Court decision for

a case. The two decisions that the jury can decide are the
convict is guilty and not guilty. Hence the two hypotheses
stated under hypothesis. For every decision the truth can be
either, the convict is really guilty and the convict is not guilty in
reality. Hence the two types of Errors.
 Ho = Not Guilty
  Ha = Guilty
In the above example, 
 Type I Error will be: Innocent in Jail
 Type II Error will be: Guilty Set Free

Note:
P(X) is the probability of the event X happening.
Ho  = NULL Hypothesis
Ha  = Alternative Hypothesis

 Mathematical Definition of Type I

Error: P(Probability of Rejecting Ho/Probability of
Ho being true ) = P(Rejecting Ho | Ho True)

 Mathematical Definition of Type II

Error: P(Probability of failing to remove Ho/Probability
of Ho being false ) = P(Accept Ho | Ho False)

 How to Balance a Type I Error?

One of the most common approaches to minimizing the probability of

getting a false positive error is to minimize the significance level of a
hypothesis test. For example, the significance level can be minimized to
1% (0.01). This indicates that there is a 1% probability of incorrectly
rejecting the null hypothesis.
  How to balance a Type II Error in hypothesis
testing ?
The only available option is to minimize the probability of committing this
type of statistical error. Since a type II error is closely related to the power
of a statistical test, the probability of the occurrence of the error can be
minimized by increasing the power of the test.

1. Increase the sample size

One of the simplest methods to increase the power of the test is to increase
the sample size used in a test. The sample size primarily determines the
amount of sampling error, which translates into the ability to detect the
differences in a hypothesis test. A larger sample size increases the chances
to capture the differences in the statistical tests, as well as increasing the
power of a test.

2. Increase the significance level

Another method is to choose a higher level of significance. For instance, a

researcher may choose a significance level of 0.10 instead of the commonly
acceptable 0.05 level. The higher significance level implies a higher
probability of rejecting the null hypothesis when it is true.