What is statistical significance?
1 Answer
Nov 5, 2015
Statistical significance or the level of significance is a factor in deriving a test procedure.
Explanation:
The level of significance is generally taken as 5%. In some case, it can be 1% or 10% or 2%.
Here, let me explain the meaning of 5% level of significance.
By the property of a normal variate, we know that
Pr[#mu# - 3#sigma# < x <#mu# + 3#sigma# ] is approximately .95
In other words, it is expected that in only 5% cases, the value of the random variable is expected to be outside the range mentioned above.
Hence, a null hypothesis rejected by a statistical test procedure, we say that the difference is statistically significant.