Type-2 Error in Hypothesis Testing

Type-2 error occurs when 'a criminal is acquitted and goes scot-free'.

By default, null hypothesis supports homogeneous distribution, a no effect property and an idealistic situation. To reject a null hypothesis, requires an absolute certainty.

When, in reality, a null hypothesis is wrong but the test result accepts the null hypothesis, then we commit a type-2 error.

The impact of type-2 error depends on the cost associated with committing one. For example, courts all across the world, start with a null hypothesis that the accused is innocent. So, as per type-2 error, the court during final judgement, accepts the null hypothesis i.e. the accused is innocent and he/she goes scot-free. But in reality, the accused has committed the crime. So, in this case, the cost of type-2 error is huge.

P.S. 'A null hypothesis is never accepted'. Either we 'reject a null hypothesis' or we 'fail to reject a null hypothesis'.

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