Statistical and Practical Significance (1 of 4)
It is important not to confuse the confidence with which the null hypothesis can be rejected with size of the effect. To make this point concrete, consider a researcher assigned the task of determining whether the video display used by travel agents for booking airline reservations should be in color or in black and white. Market research had shown that travel agencies were primarily concerned with the speed with which reservations can be made. Therefore, the question was whether color displays allow travel agents to book reservations faster. Market research had also shown that in order to justify the higher price of color displays, they must be faster by an average of at least 10 seconds per transaction. Fifty subjects were tested with color displays and 50 subjects were tested with black and white displays. Subjects were slightly faster at making reservations on a color display (M = 504.7 seconds) than on a black and white display (M = 508.2) seconds. although the difference is small, it was statistically significant at the .05 significance level. Box plots of the data are shown below.
