The significance level, often denoted as \( \alpha \), is a threshold used in statistical testing to determine whether to reject the null hypothesis. It reflects the probability of rejecting the null hypothesis when it is actually true. Commonly used significance levels are 0.05, 0.01, and 0.10, corresponding respectively to 5%, 1%, and 10% probabilities of mistakenly rejecting the null.
- Significance levels guide researchers in making decisions under uncertainty. Essentially, it represents the likelihood of making a Type I error - incorrectly identifying an effect when there is none.
- In the context of chi-square tests, the significance level determines which chi-square value you're examining against from the chi-square distribution table based on your degrees of freedom.
- For instance, when \(\alpha=0.05\) or \(\alpha=0.01\), it means that there is a 5% or 1% risk of concluding that a difference exists when there is no actual difference.
Choosing an appropriate significance level is critical for balancing risks of errors and making sound statistical conclusions.