  Many different methods exist for reducing data obtained when an astronomical
source is studied with a two-channel polarimeter, such as a Wollaston prism
system. This paper presents a rigorous method of reducing the data from raw
aperture photometry, and evaluates errors both by a statistical treatment, and
by propagating the measured sky noise from each frame. The reduction process
performs a hypothesis test for the presence of linear polarization. The
probability of there being a non-zero polarization is obtained, and the best
method of obtaining the normalized Stokes Parameters is discussed. Point and
interval estimates are obtained for the degree of linear polarization, which is
subject to positive bias; and the polarization axis is found.

Astrophysics