Moonfrog Interview Questions | p-Value
Question
What is p-value? Explain it using some examples.
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Statistics
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Answers ( 4 )
P-value is a probability value which gives you evidence against the null hypothesis.
When you are running Linear Regression , the null hypothesis to determine if a variable is
significant or not is that, the variable is not significant. Now looking at the p-value, it gives us
a idea, if a variable is significant or not. If p-value is less than 0.05 (for a 95% confidence interval),
we consider that the variable is significant, else it is discarded from the model.
P values evaluate how well the sample data support the null hypothesis is true. It measures how compatible your data are with the null hypothesis. How likely is the effect observed in your sample data if the null hypothesis is true?
A low P value suggests that your sample provides enough evidence that you can reject the null hypothesis for the entire population.
Example:
Suppose that a vaccine study produced a P value of 0.04. This P value indicates that if the vaccine had no effect, you’d obtain the observed difference or more in 4% of studies due to random sampling error.
P value is the lowest significance level at which null hypothesis can be rejected. It is also known as exact level of significance or exact probability of commuting a Type I error.
P value is defined as probability of null hypothesis being true.
If pvalue is greater than accepted level of significance then we accept null hypothesis and if pvalue is less than accepted level
of significance then we reject null hypothesis.
For example, a p value of 0.0254 is 2.54%. This means there is a 2.54% chance your results could be random (i.e. happened by chance). That’s pretty tiny. On the other hand, a large p-value of .9(90%) means your results have a 90% probability of being completely random and not due to anything in your experiment. Therefore, the smaller the p-value, the more important (“significant”) your results. We are taking 5% as level of significance here. It can vary as per domain