Determining the significance level is often a balance between the risk of making a Type I error and the consequences of such an error. Researchers typically set α at 0.05, meaning there is a 5% chance that the observed results are due to random chance rather than a real effect. However, more stringent levels like 0.01 or 0.001 may be used in critical areas such as epidemiological studies involving life-threatening diseases or high-stakes public health decisions.
