Hypothesis Testing---III

• We define r as region in Y space where we will deem hypothesis (1) to be true and (0) to be false.

• In the remaining region of Y space, R-r, (R is total Y range) we will take (0) to be true, (1) to be false.

• This scheme is characterized by two constants:

• 1. level of significance or size of test .

  is chance that (0) will be declared false when it is in fact true.

• 2. is the contamination, i.e.,

  is chance that (0) will be declared true when it is in fact false.

• Clearly, it depends on the application for the balance between efficiency and contamination .