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Significance Level

Definition

The significance level, also known as alpha (α), determines how much evidence we need to reject the null hypothesis. It represents the probability of making a Type I error.

Analogy

Imagine you are buying a new phone and want to make sure it works properly. The significance level is like your tolerance for defects - if you set it too low, you might end up rejecting phones that are perfectly fine; if you set it too high, you might accept faulty phones.

Related terms

P-value: The probability of obtaining results as extreme as observed data, assuming the null hypothesis is true.

Confidence Interval: A range of values within which we estimate an unknown population parameter lies with a certain level of confidence.

One-tailed Test: A statistical test where deviations from the expected outcome can only occur in one direction.

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AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.