01 Jul 2024

Posted on:

22 Jun 2024

0

# When alpha is 0.1 than why are we doing 1-0.05

for 99% CI alpha is 0.1 than why are we doing 1-0.05

Posted on:

22 Jun 2024

1

alpha=0.01 than why 1-0.005

Instructor
Posted on:

24 Jun 2024

1

Hi,

Good to hear from you!

Please bear in mind that for 99% CI alpha is 0.01 and not 0.1.

Then 0.01 is divided by 2 because we have a two-sided test and this gives us 0.005.

Hope this makes sense!

Best,

Ned

Posted on:

01 Jul 2024

0

For a one sided test (lets say we are testing positive side only) we want all of of the normal distribution to the left 50% and then all of the area to right up to alpha. If alpha was 1% the value of this marker would contain 99% of values to the left and 1% value to the right. In a two sided test we need to ensure we have 99% of the data in the middle of the distribuiton, 0.05% of data on the extreme left and 0.05% of data on the extreme right (hence alpha / 2). The example here says that 2.5% values is less than 94833, 2.5% is greater that 105568 and 95% of values in between, hence the 95% confidence interval