when the p value is sufficiently small typically 5 or less the results are not easily explained by chance alone and the data are deemed inconsistent with the null hypothesis in this case the null hypothesis of chance alone as an explanation of the data is rejected in favor of a more systematic explanation 1
statistical significance is often used for new pharmaceutical drug trials to test vaccines and in the study of pathology for effectiveness testing and to inform investors on how successful the company is at releasing new products examples of statistical significancesuppose alex a financial analyst is curious as to whether some investors had advance knowledge of a company s sudden failure alex decides to compare the average of daily market returns prior to the company s failure with those after to see if there is a statistically significant difference between the two averages the study s p value was 28 5 indicating that a difference as large as the observed 0 0033 to 0 0007 is not unusual under the chance only explanation thus the data did not provide compelling evidence of advance knowledge of the failure on the other hand if the p value were 0 01 much less than 5 then the observed difference would be very unusual under the chance only explanation in this case alex may decide to reject the null hypothesis and to investigate further whether some traders had advance knowledge statistical significance is also used to test new medical products including drugs devices and vaccines publicly available reports of statistical significance also inform investors on how successful the company is at releasing new products say for example a pharmaceutical leader in diabetes medication reported that there was a statistically significant reduction in type 1 diabetes when it tested its new insulin the test consisted of 26 weeks of randomized therapy among diabetes patients and the data gave a p value of 4 this signifies to investors and regulatory agencies that the data show a statistically significant reduction in type 1 diabetes 2stock prices of pharmaceutical companies are often affected by announcements of the statistical significance of their new products 3