In our November 17, 2016 Tip of the Week, we showed how the concept of Alpha leads to the concept of Critical Value. This Tip shows how that, in turn, leads to the Critical Value.- The person performing the test selects the value for Alpha, the Significance Level.
- This value is plotted as an area under the Distribution curve of a Test Statistic, (z in this instance). This example shows a 2-sided test in which Alpha/2 is shaded under each tail of the Distribution.
- The boundary of each shaded area is the Critical Value. It is in units of the Test Statistics (units of z's in this instance).
- We then use the formula for the Test Statistic to convert the Critical Value(s) into the units of the data -- centimeters in this example.
- These values define the Confidence Limit(s), which, in turn, define the Confidence Interval.
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## AuthorAndrew A. (Andy) Jawlik is the author of the book, Statistics from A to Z -- Confusing Concepts Clarified, published by Wiley. ## Archives
October 2020
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