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A pharmaceutical company testing two new compounds intended to reduce blood pressure levels. The compounds are administered to two different sets of laboratory animals. In one group, 80% of 100 animals tested respond to drug 1 with lower blood-pressure levels. In group-two, 77% of 200 animals tested respond to drug 2 with lower blood-pressure levels. The company is interested in knowing if drug 1 is more effective at reducing blood pressure levels.
a. What conclusion would you reach at the 0.02 level of significance? Use the p-value approach to hypothesis testing.
b. What type of error could you be making in your conclusion above? Explain the type of error in the context of this question.
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