In: Statistics and Probability
Write a paragraph or more to explain what p-value and significance level are, and what they are for?
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Lets dig into the definition of P-value :
It is the probability of obtaining test results at least as extreme as the results actually observed during the test, assuming that the null hypothesis is correct. p-value is defined by the test-statistic.
Level of significance
The level of significance is a pre-defined value of probability , refeerred to as alpha ( ) , less. The null hypothesis Ho stands rejected if the p-value is less than or equal this level of significance. Alpha unlike the p-value has a no derviation, in fact it is defined or "assumed" to a constant value. It is set by the researcher for this tests.
Usage:
The main usage of p-value is in statistical hypothesis testing, specifically in null hypothesis significance testing. Here before performing the experiment, one first chooses the null hypothesis and the alpha(α). If p-value < (α), then we have enough evidence to say that sample is inconsistent with the null hypothesis and the null hypothesis is rejected. If p-value > (α), we don't have enough evidence to reject the null hypothesis.