Whether these trends are true changes in disease incidence or artifacts of changing reporting or diagnostic practices, anything that causes disease counts in the baseline period to be systematically higher than current disease counts increases type II errors
, and anything that causes baseline disease counts to be systematically lower than current disease counts increases type I errors.
Prediction accuracy of single classifiers Model Accuracy Type I error Type II error
Despite their fundamental importance, the minimum difference of interest and the type II error
rates are rarely referred to when authors report their 'no statistically significant difference' results.
Heimann (1993) shows, however that, in a three-state world in which one is concerned about committing either a Type I or Type II error
(and where the third state is the correct decision), serial systems are superior because they reduce the likelihood of Type I errors--at is, rejecting the null hypothesis when it is actually correct (acting when no action is necessary or desirable).
Type I and Type II error
rate trade-offs must be examined for the model in Table 6 and the holdout sample (2000-2005) to determine prediction ability.
Previous studies do not take into account the likelihood that costs of Type I errors (misclassifying failures as non-failures) are higher that the costs of Type II errors
(misclassifying non-failures as failures).
In fact, by increasing the risk of type I error, the risk of type II error
decreases (Foster, 2001) (Fig.
Type I and Type II errors
of four models Type I error Type II error
Discriminant Analysis 31.
Factors that may have led to a Type II error
in this study included the sampling technique, type of instrument, and nuisance variables.
The repercussions of making a Type I error or a Type II error
differ greatly, however, for FDA drug reviewers.
Type II error
is the misclassification of a healthy firm as bankrupt.
These figures translate into an overall classification accuracy of 88 percent with 12 percent of Type I error and 7 percent of Type II error
, one year prior to bankruptcy.