Predictive Analytics in Business
The significance level is a threshold in hypothesis testing that determines the probability of rejecting the null hypothesis when it is actually true, commonly denoted as alpha (α). It helps researchers decide whether to accept or reject a hypothesis based on statistical evidence, usually set at values like 0.05 or 0.01. A lower significance level indicates stricter criteria for rejecting the null hypothesis, which is crucial in predictive analytics for ensuring reliable results.
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