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Statistical Non-Significance in Empirical Economics

Alberto Abadie ()

No 24403, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Significance tests are probably the most common form of inference in empirical economics, and significance is often interpreted as providing greater informational content than non-significance. In this article we show, however, that rejection of a point null often carries very little information, while failure to reject may be highly informative. This is particularly true in empirical contexts that are typical and even prevalent in economics, where data sets are large (and becoming larger) and where there are rarely reasons to put substantial prior probability on a point null. Our results challenge the usual practice of conferring point null rejections a higher level of scientific significance than non-rejections. In consequence, we advocate a visible reporting and discussion of non-significant results in empirical practice.

JEL-codes: C01 C12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm, nep-hpe and nep-ict
Date: 2018-03
Note: DEV LS PE TWP
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