Explain the difference between statistical significance and economic significance of OLS estimates?

Expert Solution

Statistical significance refers to the use of a sample to carry out a statistical test meant to reveal any significant deviation from the stated null hypothesis . We then decide whether to reject or accept the null hypothesis.
On the other hand , Economic significance entails not just the statistical significance but also the economic effect inherent in the decision made after data analysis and testing.

Rahul Sunny answered 2 years ago

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