iSixSigma

Statistical Significance

Definition of Statistical Significance:

Statistical significance is the probability of rejecting the null hypothesis (i.e., concluding that there is a difference between specified populations or samples) when it is true. Significance level is denoted as alpha, or α.

In hypothesis testing, a calculated p-value is compared to the established significance level, or alpha, to determine whether to reject or accept the null hypothesis. (The alpha level is set before data gathering and analysis.) For example, assuming an alpha value of 0.05, a calculated p-value of 0.05 indicates a 5 percent risk of concluding that there is a difference between populations when there is none. In general, if the p-value of a hypothesis test is equal to or less than the alpha level, the null hypothesis is rejected, and we conclude that the difference between populations is statistically significant. If the p-value is greater than the alpha level, the null hypothesis is accepted, and we conclude there is no statistically significant difference.

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