Significance level: why do researchers use a 0.05?

Significance Level

The significance level is the level of probability at which it is agreed that the null hypothesis will be rejected. In academic research, usually, a 0.05 level of significance is used. The level of significance is also called a level of risk.

The level of significance of an event (such as a statistical test) is the probability that the event will occur by chance. If the level is quite low then the probability of occurring that event by chance will be quite small. One can say that the event is significant as its occurrence is very small.

Significance Level: One tailed or two tailed test

Type I Error

It has become part of the statistical hypothesis-testing culture.

  • It is a longstanding convention.
  • It reflects a concern over making type I errors (i.e., wanting to avoid the situation where you reject the null when it is true, that is, wanting to avoid “false positive” errors).
  • If you set the level of significance at 0.05, then you will only reject a true null hypothesis 5% of the time (i.e., you will only make a type-I error 5% of the time) in the long run.

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