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What is a P Value in Hypothesis Testing and How its calculated?


When you perform a hypothesis test in statistics, a p-value helps you determine the significance of your results. Hypothesis tests are used to test the validity of a claim that is made about a population. This claim that’s on trial, in essence, is called the null hypothesis.

The alternative hypothesis is the one you would believe if the null hypothesis is concluded to be untrue. The evidence in the trial is your data and the statistics that go along with it. All hypothesis tests ultimately use a p-value to weigh the strength of the evidence (what the data are telling you about the population). The p-value is a number between 0 and 1 and interpreted in the following way:

A small p-value (typically ≤ 0.05) indicates strong evidence against the null hypothesis, so you reject the null hypothesis.

A large p-value (> 0.05) indicates weak evidence against the null hypothesis, so you fail to reject the null hypothesis.

p-values very close to the cutoff (0.05) are considered to be marginal (could go either way). Always report the p-value so your readers can draw their own conclusions.

For example, suppose a pizza place claims their delivery times are 30 minutes or less on average but you think it’s more than that. You conduct a hypothesis test because you believe the null hypothesis, Ho, that the mean delivery time is 30 minutes max, is incorrect. Your alternative hypothesis (Ha) is that the meantime is greater than 30 minutes. You randomly sample some delivery times and run the data through the hypothesis test, and your p-value turns out to be 0.001, which is much less than 0.05. In real terms, there is a probability of 0.001 that you will mistakenly reject the pizza place’s claim that their delivery time is less than or equal to 30 minutes. Since typically we are willing to reject the null hypothesis when this probability is less than 0.05, you conclude that the pizza place is wrong; their delivery times are in fact more than 30 minutes on average, and you want to know what they’re gonna do about it! (Of course, you could be wrong by having sampled an unusually high number of late pizza deliveries just by chance.)


How a P-value is Calculated

The P-value, or calculated probability, is the probability of finding the observed, or more extreme, results when the null hypothesis (H0) of a study question is true – the definition of ‘extreme’ depends on how the hypothesis is being tested. P is also described in terms of rejecting H0 when it is actually true, however, it is not a direct probability of this state.

The null hypothesis is usually a hypothesis of “no difference” e.g. no difference between blood pressures in group A and group B. Define a null hypothesis for each study question clearly before the start of your study.

The only situation in which you should use a one-sided P value is when a large change in an unexpected direction would have absolutely no relevance to your study. This situation is unusual; if you are in any doubt then use a two-sided P-value.

The term significance level (alpha) is used to refer to a pre-chosen probability and the term “P-value” is used to indicate a probability that you calculate after a given study.

The alternative hypothesis (H1) is the opposite of the null hypothesis; in plain language terms, this is usually the hypothesis you set out to investigate. For example, the question is “is there a significant (not due to chance) difference in blood pressures between groups A and B if we give group A the test drug and group B a sugar pill?” and the alternative hypothesis is ” there is a difference in blood pressures between groups A and B if we give group A the test drug and group B a sugar pill”.

If your P-value is less than the chosen significance level then you reject the null hypothesis i.e. accept that your sample gives reasonable evidence to support the alternative hypothesis. It does NOT imply a “meaningful” or “important” difference; that is for you to decide when considering the real-world relevance of your result.

The choice of significance level at which you reject H0 is arbitrary. Conventionally the 5% (less than 1 in 20 chance of being wrong), 1% and 0.1% (P < 0.05, 0.01 and 0.001) levels have been used. These numbers can give a false sense of security.

In the ideal world, we would be able to define a “perfectly” random sample, the most appropriate test, and one definitive conclusion. We simply cannot. What we can do is try to optimize all stages of our research to minimize sources of uncertainty. When presenting P values some groups find it helpful to use the asterisk rating system as well as quoting the P-value:

P < 0.05 *

P < 0.01 **

P < 0.001

Most authors refer to statistically significant as P < 0.05 and statistically highly significant as P < 0.001 (less than one in a thousand chance of being wrong).

The asterisk system avoids the woolly term “significant”. Please note, however, that many statisticians do not like the asterisk rating system when it is used without showing P values. As a rule of thumb, if you can quote an exact P-value then do. You might also want to refer to a quoted exact P-value as an asterisk in text narrative or tables of contrasts elsewhere in a report.

At this point, a word about the error. Type I error is the false rejection of the null hypothesis and type II error is the false acceptance of the null hypothesis. As an aid memoir: think that our cynical society rejects before it accepts.

The significance level (alpha) is the probability of type I error. The power of a test is one minus the probability of type II error (beta). Power should be maximized when selecting statistical methods. If you want to estimate sample sizes then you must understand all of the terms mentioned here.

The following table shows the relationship between power and error in hypothesis testing:

TRUTH Accept H0:

Reject H0:

H0 is true: correct decision P-type I error P
1-alpha alpha (significance)

H0 is false: type II error P correct decision P
beta 1-beta (power)

H0 = null hypothesis
P = probability

If you are interested in further details of probability and sampling theory at this point then please refer to one of the general texts listed in the reference section.

You must understand confidence intervals if you intend to quote P values in reports and papers. Statistical referees of scientific journals expect authors to quote confidence intervals with greater prominence than P values.

Notes about Type I error:

is the incorrect rejection of the null hypothesis
maximum probability is set in advance as alpha
is not affected by sample size as it is set in advance
increases with the number of tests or endpoints (i.e. do 20 rejections of H0 and 1 is likely to be wrongly significant for alpha = 0.05)

Notes about Type II error:

is the incorrect acceptance of the null hypothesis
probability is beta
beta depends upon sample size and alpha
can’t be estimated except as a function of the true population effect
beta gets smaller as the sample size gets larger
beta gets smaller as the number of tests or endpoints increases.

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