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A Frequent Misuse of Significance Tests

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  • Thomas Mayer

Abstract

Economists sometimes interpret the failure of a significance test to disconfirm a hypothesis as evidence that this hypothesis is valid. Six examples of this are cited from recent journals. But this is a misinterpretation of what significance tests show. While in general it is correct that every failure to disconfirm a hypothesis adds to its credibility, the term "disconfirm" is defined differently for this purpose than it is in the context of significance tests.

Suggested Citation

  • Thomas Mayer, 2001. "A Frequent Misuse of Significance Tests," CESifo Working Paper Series 549, CESifo.
    • Handle: RePEc:ces:ceswps:_549
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    File URL: https://www.cesifo.org/DocDL/cesifo_wp549.pdf
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    References listed on IDEAS

    as
    1. Deirdre N. McCloskey & Stephen T. Ziliak, 1996. "The Standard Error of Regressions," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 97-114, March.
    2. Raymond Robertson, 2000. "Wage Shocks and North American Labor-Market Integration," American Economic Review, American Economic Association, vol. 90(4), pages 742-764, September.
    3. James T. Hamilton & W. Kip Viscusi, 1999. "Are Risk Regulators Rational? Evidence from Hazardous Waste Cleanup Decisions," American Economic Review, American Economic Association, vol. 89(4), pages 1010-1027, September.
    4. Susanna Loeb & Marianne E. Page, 2000. "Examining The Link Between Teacher Wages And Student Outcomes: The Importance Of Alternative Labor Market Opportunities And Non-Pecuniary Variation," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 393-408, August.
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    More about this item

    Keywords

    Significance tests; t values; t coefficients; confirmation;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology

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