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Fri Feb 09 2024

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A Layman's Guide To Statistical Significance Calculator: 4 Easy Steps You Need To Follow

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Statistical significance calculator

A business grows because of many factors like employees, product quality, marketing strategies, customers, and market conditions.  Marketing strategies are one of the most important tools for increasing brand awareness and value.

Different marketing strategies and methods are used to bring effective yet positive changes to the company’s growth. When you implement any marketing strategies or bring any change in your company in terms of the production process, organizational structure, etc., it is very important to know whether the strategies you have applied or changes you have made in your business have brought any positive effect or not. 

If it has brought some positive result then whether it is because of the strategies, methods applied by you and changes made by you or because of some random reason. This can be found by using a statistical significance calculator. Whether the strategies and changes brought by you in the company are statistically significant or not can be judged by implementing the use of a significance calculator. 

Meaning of Statistical Significance Calculator

A statistical significance calculator is a tool that is used to mathematically prove the reliability of any result. It is used for understanding whether the relationship between two or more variables in any analysis is caused by another factor and is not coincidental. While making any analysis, a huge amount of data is used to compare two or more variables.

The result of the analysis has a great impact but if it is not accurate then there is no value in the analysis. For checking the accuracy of certain analyses, a significance calculator is used. This tool helps in understanding whether the results of the surveys, experiments, polls, votes, and data are statistically significant or not.

In business, when you make certain changes to increase your customer base, sale, and profit, you analyze the result after implementing the changes. 

A statistical significance calculator helps you in knowing that the changes brought by you have a significant and positive impact on your business. Suppose, you have changed the aesthetics of your website to attract potential customers.

After comparing the number of customers before the change and after the change, you find a significant increase in your customer base. In this process, the statistical significance calculator helps you in making the analysis and gives you confidence in the result.

Steps to Follow While Using a Statistical Significance Calculator

A significance calculator helps in calculating the result of the analysis and finding whether the results are reliable or not. The below-mentioned steps will help you in calculating the significance of the statistics.

Create a Null Hypothesis and an Alternative Hypothesis

The first step in determining whether a result is statistically significant or not is creating a null hypothesis. It means you will have to create or set a null hypothesis that states that there is no such considerable difference between the two sets of variables or data that you are using for calculating the statistical significance.

Also, you must remember that you are creating this null hypothesis for a purpose and it is just an assumption. So, you don’t have to believe or trust the null hypothesis. Once, this is done, create an alternative hypothesis, meaning the opposite of the null hypothesis. You will have to create an alternative hypothesis that would state or show that there is a difference between the two or more variables or the two sets of data that you are using and it is significant or notable.

Decide the Level of Significance and the Type of Test

The next step is to set or decide the significance level. This level is known as alpha or a. The probability of rejecting the null hypothesis even when the hypothesis is true is known as alpha or the significance level. Five percent or 0.05 of alpha is a common and standard level.

However, depending on the sensitivity of the experiment, the alpha can be changed. If your experiment is slightly more sensitive, you can set your significance level or alpha at 1% or 0.01 but in most cases, 5% or 0.05 is used. Once you have set your significance level, now comes the time to decide the type of test you will use while determining the statistical significance. 

There are two types of tests used, the first is a one-tailed test and the second is a two-tailed test. The first one is significant in determining the relationship between two or more variables or two sets of data in one direction while the second one helps determine the relationship between two or more variables in two directions.

The alternative hypotheses created by you are true if the sample that you are using for the experiments lands within the one-tailed critical area.

Conduct a Power Analysis and Perform Calculations

The next step is to use a significance calculator and perform a power analysis for determining the sample size. A power analysis includes the sample size, effect size, statistical power, and significance level. This analysis helps you in selecting a sample size that will be required while determining the statistical significance.

Once this is done, you will need to perform certain sets of calculations. First is the standard deviation. This calculation will help you in understanding how much the measurement is spread out and about the expected and mean values.

Now, finding variations between the sample groups is important if you have more than one sample group. This calculation can be performed using the formula, standard deviation = √((∑|x−μ|^ 2) / (N-1)). 

Next, you will have to use the standard error formula, standard error = √((s1/N1) + (s2/N2)) and then you will have to determine the t-score using the formula t = ((µ1–µ2) / (sd)) to compare your data with other data. This tells you about the probability of a significant difference between the two groups.

Lastly, you will determine the degree of freedom using the formula. This tells you about the number of values in a calculation that can vary acceptably.

Use the T-Table

Lastly, you will use the t-table for calculating whether the conclusion is statistically significant or not. For calculating this, first, you need to look at the left side of the degrees of freedom and then find the variance.

Now go upward and see the p-values. Now, compare the p-value with the significance level or alpha for determining the statistical significance of the result. The p-value should be less than 5% or 0.05.


A statistical significance calculator helps in calculating the reliability of the result of the conclusion. Determining the trustworthiness of the result is very important because your many business decisions are dependent on this. It is a great tool for making business decisions along with having confidence in the decisions.

You can use this tool to judge the effectiveness of your marketing strategies and changes brought by you in the business etc. You must use this tool so that you know whether your strategies are helpful or not and accordingly you will be able to make decisions.