HOW MUCH STATISTICAL SIGNIFICANCE YIELDS PRACTICAL SIGNIFICANCE?
Exercises like the one on page 6 are useful springboards for the following discussion: “How did the user decide that a statistical significance level of 0.05 was the threshold of practical significance in the sense of a fork in the managerial decision tree?” In the day-to-day work of a practicing statistician, the user is hesitant to specify such a significance level. In such cases, the statistician serves the user well by conducting a hypothesis test and reporting the observed significance level (p-value) of the test. It is then left to the recipient of the results to decide, at leisure, what action to take based on the reported p-value (Hooke 1983), (Schervish 1996). JUST ONE MORE INDEPENDENT VARIABLE, PLEASE Newcomers to regression analysis find the temptation to add independent variables to a model almost irresistible (Kotz and Stroup 1983). Adding another independent variable increases the absolute value of the multiple correlation coefficient. Too often, such an increase becomes
