# Statistics: An Introduction to Quantitative Economic Research

By Daniel B. Suits | Go to book overview

CHAPTER VI
Significance Tests

6.1 INTRODUCTION

When--as in the examples of the last chapter--all the cell means in a large table differ by several standard errors, there is overwhelming evidence of some kind of relationship among the variables. But when cells are few, or the means not well separated, it is often unclear whether the variables are really correlated or not. A significance test is a method of evaluating the evidence in these cases. The test to be used in a given situation depends on the kind of relationship to be tested, its form, the kind of variables used, the amount and kind of data, and sometimes the convenience of the researcher. But the basic rationale underlying all tests is the same.

Essentially, a significance test consists of calculating the risk that an observed correlation might be a purely accidental result, generated by the random behavior of uncorrelated variables. Any indication of correlation is based on observed sample evidence, but chance variation can produce the same kind of "evidence," even when the variables are uncorrelated. The heart of all significance tests is thus the calculation of the probability of observing the same evidence in a hypothetical case of no correlation. The lower this risk, the greater is the significance of the evidence, and it is natural to refer to the calculated risk as the significance level of the result.

6.2 DIFFERENCE BETWEEN TWO SAMPLE MEANS

The study of the difference between two sample means provides a basic introduction to significance tests. Table 6.1 contains information on the

-124-

If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

#### Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.
Citations (0)
Some of your citations are legacy items.
Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
• Saved book/article
• Highlights
• Quotes/citations
• Notes
• Bookmarks
Notes

#### Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

#### Cited page

Statistics: An Introduction to Quantitative Economic Research

Settings

#### Settings

Typeface
Text size Reset View mode
Search within

Look up

#### Look up a word

• Dictionary
• Thesaurus
Please submit a word or phrase above.

Why can't I print more than one page at a time?

Full screen
/ 260

## Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

## Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

## Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.