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    Statistical signficance vs. practical signficance

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    If a finding is statistically significant, why is it also necessary to consider practical significance?

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    When we make a statistical decision, it is based only on statistical significance. For example, suppose a pharmaceutical company is considering the replacement of their current cholesterol lowering drug with a new one. The statisticians collect and analyze data and report the following back to management. The statistical conclusion is, "With 95% confidence (the .05 level of statistical significance), we can conclude that the average cholesterol lowering capacity ...

    Solution Summary

    This solution illustrates the difference between statistical significance and practical significance.