Calculating the Probability of a Type II Error

To properly interpret the results of a test of hypothesis requires

that you be able to judge the p-value of the test.

However, to do so also requires that you have an understanding of

the relationship between Type I and Type II errors.

Here, we describe how the probability of a Type II error is

computed.

A Type II error occurs when a false null hypothesis is not rejected.

For example, if a rejection region is as follows:

xbar < 127.06 or xbar > 132.94

and the null hypothesis is false, then the probability of a Type II

error is defined as

β = P(127.06 < xbar < 132.94 (given that H0 is false)

The condition that the null hypothesis is false only tells us that the
mean is not equal to 130. If we want to compute β , we need to
specify a value for µ . Suppose that we want to determine the
probability of making a Type II error when, in actual fact, µ =
135, 131, 139, and/or any other value.

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A Windmill Example:

The feasibility of constructing a profitable electricity-producing

windmill depends on the average velocity of the wind. For a
certain type of windmill, the average wind speed would have to
exceed 20 mph in order for its construction to be feasible. To test
whether or not a particular site is appropriate for this windmill, 50
readings of the wind velocity are taken, and the average is
calculated. The test is designed to answer the question, is the site
feasible? That is, is there sufficient evidence to conclude that the
average wind velocity exceeds 20 mph? We want to test the
following hypotheses.

H0: A ≤ 20
HA: A > 20

If, when the test is conducted, a Type I error is committed

(rejecting the null hypothesis when it is true), we would conclude
mistakenly that the average wind velocity exceeds 20 mph. The
consequence of this decision is that the windmill would be built on
an inappropriate site. Because this error is quite costly, we specify
a small value for a, α = 0.01.

If a Type II error is committed (not rejecting the null hypothesis

when it is false), we would conclude mistakenly that the average
wind velocity does not exceed 20 mph. As a result, we would not
build the windmill on that site, even though the site is a good one.
The cost of this error may not be very large, since, if the site under
consideration is judged to be inappropriate, the search for a good
site would simply continue.

But suppose that a site where the wind velocity is greater than or
equal to 25 mph is extremely profitable. To judge the effectiveness

2
of this test (to determine if our selection of α = 0.01 and n = 50 is
appropriate), we compute the probability of committing this error.
Our task is to calculate β when µ = 25. (Assume that we know
that (σ = 12 mph.)

Our first task is to set up the rejection region in terms of xbar.

Rejection region: z > zα = z0.01 = 2.33 (look up 0.9900 in Table)

So we have z = (xbar-µ ) / (σ /√n) = (xbar-20) / (12/√50) > 2.33

Rejection region: xbar > 23.95

Region where H0 is not rejected: xbar < 23.95

Thus: β = P(xbar < 23.95 (given that µ = 25) =

P{[(xbar-µ ) / (σ /√n)] < [(23.95-25) / (12/√50)] =

P(z < -0.62) = 0.5 – 0.2324 = 0.2672

23.95 22 1.95 1.697 1.15 0.3749 0.8749

23.95 22.5 1.45 1.697 0.85 0.3023 0.8023
23.95 23 0.95 1.697 0.56 0.2123 0.7123
23.95 23.5 0.45 1.697 0.27 0.1064 0.6064
23.95 24 -0.05 1.697 -0.03 0.0120 0.4880
23.95 24.5 -0.55 1.697 -0.32 0.1255 0.3745
23.95 25 -1.05 1.697 -0.62 0.2324 0.2676
23.95 25.5 -1.55 1.697 -0.91 0.3186 0.1814
23.95 26 -2.05 1.697 -1.21 0.3869 0.1131
23.95 26.5 -2.55 1.697 -1.50 0.4332 0.0668
23.95 27 -3.05 1.697 -1.80 0.4641 0.0359

3
This is the graph for β associated with numbers from 18 to 32.5:

1.2

0.8

0.6

0.4

0.2

The probability of not rejecting the null hypothesis when µ = 25 is

0.2676 (see above Figure).

This means that, when the mean wind velocity is 25 mph, there is a
26.76% probability of erroneously concluding that the site is not
profitable. If this probability is considered too large, we can
reduce it by either increasing α or increasing n.

For example, if we increase a to 0.10 and leave n = 50, then β =

0.0475.

Rejection region: (xbar-20) / (12/√50) > 1.28 ⇒ xbar > 22.17

22.17 24.5 -2.33 1.697 -1.37 0.4147 0.0853

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22.17 25 -2.83 1.697 -1.67 0.4525 0.0475
22.17 25.5 -3.33 1.697 -1.96 0.4750 0.0250
1.2

0.8

0.6

0.4

0.2

25
With α = 0.10, however, the probability of building on a site that
is not profitable is too large.

If we let α = 0.01 but increase n to 100, then β = 0.0329.

22.796 23 -0.204 1.20 -0.17 0.0675 0.4325

22.796 23.5 -0.704 1.20 -0.59 0.2224 0.2776
22.796 24 -1.204 1.20 -1.00 0.3413 0.1587
22.796 24.5 -1.704 1.20 -1.42 0.4222 0.0778
22.796 25 -2.204 1.20 -1.84 0.4671 0.0329
22.796 25.5 -2.704 1.20 -2.25 0.4878 0.0122
22.796 26 -3.204 1.20 -2.67 0.4962 0.0038
22.796 26.5 -3.704 1.20 -3.09 0.4990 0.0010
22.796 27 -4.204 1.20 -3.50 0.5000 0.0000

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 1.2

0.8

0.6

0.4

0.2

Now both α and β are quite small, but the cost of sampling has
increased.

Nonetheless, the cost of sampling is small in comparison to the

costs of making Type I and Type II errors in this situation.

Another way of judging a test is to measure its power --the

probability of its leading us to reject the null hypothesis when it is
false-rather than measuring the probability of a Type II error.

Thus, the power of the test is equal to 1 - β . In the present

example, the power of the test with n = 50 and α = .01 is 1 -
0.2676 = 0.7324.

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 1.2

0.8

0.6

0.4

0.2

When more than one test can be performed in a given situation, we

would naturally prefer to use the test that is correct more
frequently. If (given the same alternative hypothesis, sample size,
and significance level) one test has a higher power than a second
test, the first test is said to be more powerful.

To determine the appropriate sample size for specified levels of the

Type I and Type II Errors, consult the Text.

ASSIGNMENT:

In the windmill example presented in class, the Beta and Power

functions are computed for n = 50. Compute and display the Beta
and Power functions for n = 25, n = 75, and n = 125. Display your
results in no more than two graphs.

Briefly discuss your results.