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Lesson 11 of 22 · 13 min

Critical values, p-values and the decision rule

Reject the null when the test statistic lands beyond the critical value or, equivalently, when the p-value is smaller than the significance level.

In short

  • Critical values (rejection points) come from α\alpha and the statistic's distribution. They mark the edge of the rejection region.
  • Two-tailed test: α/2\alpha/2 in each tail. One-tailed test: all of α\alpha in one tail, so its critical value is smaller in absolute value.
  • A statistic beyond the critical value is statistically significant; otherwise we fail to reject.
  • The p-value is the smallest significance level at which the null can be rejected. Reject when the p-value is below α\alpha.
  • In a two-sided test, rejecting at α\alpha is the same as the hypothesised value lying outside the 1−α1 - \alpha confidence interval.

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Critical values, p-values and the decision rule · Estimation and Hypothesis Testing