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A Human Resources officer is directing a hypothesis test to determine if her company's hiring practices are resulting in disparate impact (that is, unintentional) employment discrimination

Statistics Jan 02, 2021

A Human Resources officer is directing a hypothesis test to determine if her company's hiring practices are resulting in disparate impact (that is, unintentional) employment discrimination. The null hypothesis for the test is that there is no disparate impact discrimination. The alternate hypothesis is that there is. Considering the relative consequences of Type I and Type II errors, should the significance level (α) be set relatively low (around 0.01) or relatively high (around 0.10)? Explain.

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