EZ Statistics

P-Value Simulation

Simulation

Parameters

Simulation Results

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Understanding the P-Value Simulation

Overview

This simulation illustrates the behavior of p-values and hypothesis testing outcomes. By adjusting parameters like sample size and significance level, users can observe how these affect the likelihood of Type I errors and the stability of sample means.

Key Terms

1. P-value

The probability of observing results as extreme as, or more extreme than, the observed results, assuming the null hypothesis is true. A p-value smaller than the significance level (α) suggests that the observed data is unlikely under the null hypothesis, leading to its rejection.

2. Null Hypothesis (H₀)

The hypothesis that there is no effect or no difference. In hypothesis testing, the null hypothesis is assumed to be true unless there is strong evidence against it.

3. Alternative Hypothesis (H₁)

What we assume if the null hypothesis is rejected. The alternative hypothesis is considered if the data provides sufficient evidence to reject the null hypothesis.

4. Significance Level (α)

The threshold used to decide whether to reject the null hypothesis. It represents the Type I error rate (i.e., the probability of rejecting a true null hypothesis). It's often set to 5% (α = 0.05).

5. Rejection Rate

The proportion of times the null hypothesis is rejected in the simulations. A high rejection rate, especially when the null hypothesis is true, suggests a higher risk of Type I errors (false positives).

6. Power of the Test

The probability of correctly rejecting the null hypothesis when the alternative hypothesis is true. Power is influenced by factors like sample size, effect size, and significance level. Higher power means the test is more likely to detect true effects and avoid Type II errors (false negatives).

Simulation Process

  1. Sample Generation: Random samples are drawn from a population
  2. Hypothesis Testing: Sample means are compared to null hypothesis
  3. P-value Calculation: Statistical significance is assessed
  4. Decision Making: Results are compared to significance level
  5. Results Tracking: Outcomes are monitored across simulations

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