Statistics is a very powerful tool to use in this world of numbers. There are numerous concepts which are there in statistics. Some of them are outliers detection, p-value, probabilistic calculations, normal distributions, and many more. Today we are going to take a look at the p-value concepts. The following will be the agenda for this blog:
What is the p-value?
What is the critical value?
How it is calculated?
P-value in hypothesis testing.
1. What is p-value?
P- value is the value in statistics which means probability value. It defines how likely your results would have occurred in the future if the null hypothesis were true. In statistics, everything is calculated based on some mathematical calculations. So thus P- value.
Now, we will see what the is p-value. The P-value gives us the probability of getting a result that is either the same or more extreme than actual observations.
2. How it is calculated?
A P-value is calculated using the P-value tables or spreadsheets. We use statistical software like R, SPSS, and python to calculate the p-value.
The calculation will depend on which statistical tests you are using to test your hypothesis.
Every statistical test uses different assumptions and generates different statistics. We can select the best method which is good for the relationship being tested.
3. P-value in hypothesis testing.
In this approach to hypothesis testing, we are using the calculated probability to decide whether to reject the null hypothesis or not. We have some claims for the population data and compare them with the sample data value, then we decide based on the significance level.
The significance level is the probability value that will determine whether to reject the null hypothesis. This value can change from person to person.
If the p-value > 0.05, not statistically significant, and hence null hypothesis cannot be rejected
If the p-value < 0.05, statistically significant, and hence hypothesis can be rejected
If p-value < 0.01, highly statistically significant
This is a very simple and short description of the P-value. hopefully, this helps to understand p-value and its importance.