24 terms

Why is statistical significance valued?

It points to an effect that is unlikely to occur simply by chance

What is the purpose of a test of significance?

To describe the degree of evidence provided by the sample against the null hypothesis

What describes the degree of evidence provided by the sample against the null hypothesis

P-value

How small a P-value is convincing evidence against the null hypothesis? It depends on: (2)

1. The plausibility of H₀

2. Consequences of rejecting H₀

2. Consequences of rejecting H₀

Smaller the P

More convincing evidence

Larger the P

Less convincing evidence

APY 6.81

APY 6.81 (i)

APY 6.81 (ii)

APY 6.81 (iii)

APY 6.81 (iv)

APY 6.81 (v)

APY 6.81 interpretation

1. Find the z score

2. Find the P-value depending on the hypotheses

3. Check P-value > or < α

2. Find the P-value depending on the hypotheses

3. Check P-value > or < α

Statistically significant

An event occurred NOT by a chance

NOT statistically significant

An event occurred BY a chance

Statistically significant on H₀

Reject the null hypothesis

NOT statistically significant on H₀

Fail to reject the null hypothesis

What does the null hypothesis assume?

Assumes that any kind of difference or significance is due to chance.

P-value>α

NOT statistically significant

P-value>α WHY?

The probability that the point is extreme shows enough "strong-ness" to reject H₀

P-value<α

Statistically significant

P-value<α WHY?

The probability that the point is extreme shows NOT enough "strong-ness" to reject H₀

P-value and α

P-value measures the probability that the point is at the extreme value and α measures the "enough strong-ness" to reject H₀. If α is greater than P-value, we reject H₀.

Significance level α

The significance level α for a given hypothesis test is a value for which a P-value less than or equal to α is considered statistically significant.