Why is statistical significance not necessarily of practical important difference to a business decision? Give an example and explain. Why do statisticians play only a limited role in deciding whether statistical significance requires a business action?© BrainMass Inc. brainmass.com March 4, 2021, 8:56 pm ad1c9bdddf
When we make a statistical decision, it is based only on statistical significance. For example, suppose 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 ...
This solution is a 300 word example of a business decision where practical significance outweighs statistical significance.