Significance Level

In hypothesis testing, the significance level is the criterion used for rejecting the null hypothesis. The significance level is used in hypothesis testing as follows: First, the difference between the results of the experiment and the null hypothesis is determined. Then, assuming the null hypothesis is true, the probability of a difference that large or larger is computed . Finally, this probability is compared to the significance level. If the probability is less than or equal to the significance level, then the null hypothesis is rejected and the outcome is said to be statistically significant. Traditionally, experimenters have used either the 0.05 level (sometimes called the 5% level) or the 0.01 level (1% level), although the choice of levels is largely subjective. The lower the significance level, the more the data must diverge from the null hypothesis to be significant. Therefore, the 0.01 level is more conservative than the 0.05 level. The Greek letter alpha (α) is sometimes used to indicate the significance level. See also: Type I error and significance test