Question 366687: Why does the significance level differ among industries? Is the null hypothesis more likely to be rejected at α = 0.01 than α = 0.10? As the significance level increases to α = 0.10 from α = 0.01, which type error is more likely to occur? 7What may be done to reduce the likelihood of incurring this error?
Answer by robertb(5830)   (Show Source):
You can put this solution on YOUR website! Significance levels differ among industries because different industries hold different quality standards. The null hypothesis is more likely to be rejected at 0.10 significance level. As the significance level increases to α = 0.10 from α = 0.01, type I error is more likely to occur (that is, it is more likely that we reject a statement that may actually be true.) To reduce the likelihood of a type I error, continuous and periodic sampling within the industry is suggested (quality control) using as large (but manageble)a size as possible.
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