Retrospectives: Guinnessometrics: The Economic Foundation of "Student's" t
AbstractIn economics and other sciences, "statistical significance" is by custom, habit, and education a necessary and sufficient condition for proving an empirical result. The canonical routine is to calculate what's called a t-statistic and then to compare its estimated value against a theoretically expected value of it, which is found in "Student's" t table. A result yielding a t-value greater than or equal to about 2.0 is said to be "statistically significant at the 95 percent level." Alternatively, a regression coefficient is said to be "statistically significantly different from the null, p ≤ .05." Canonically speaking, if a coefficient clears the 95 percent hurdle, it warrants additional scientific attention. If not, not. The first presentation of "Student's" test of significance came a century ago in 1908, in "The Probable Error of a Mean," published by an anonymous "Student." The author's commercial employer required that his identity be shielded from competitors, but we have known for some decades that the article was written by William Sealy Gosset (1876-1937), whose entire career was spent at Guinness's brewery in Dublin, where Gosset was a master brewer and experimental scientist. Perhaps surprisingly, the ingenious "Student" did not give a hoot for a single finding of "statistical" significance, even at the 95 percent level of significance as established by his own tables. Beginning in 1904, "Student," who was a businessman besides a scientist, took an economic approach to the logic of uncertainty, arguing finally that statistical significance is "nearly valueless" in itself.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by American Economic Association in its journal Journal of Economic Perspectives.
Volume (Year): 22 (2008)
Issue (Month): 4 (Fall)
Find related papers by JEL classification:
- B16 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Quantitative and Mathematical
- C00 - Mathematical and Quantitative Methods - - General - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Deirdre N. McCloskey & Stephen T. Ziliak, 1996. "The Standard Error of Regressions," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 97-114, March.
- Steven D. Levitt & John A. List, 2008.
"Field Experiments in Economics: The Past, The Present, and The Future,"
NBER Working Papers
14356, National Bureau of Economic Research, Inc.
- Levitt, Steven D. & List, John A., 2009. "Field experiments in economics: The past, the present, and the future," European Economic Review, Elsevier, vol. 53(1), pages 1-18, January.
- Steven Levitt & John List, 2009. "Field experiments in economics: The past, the present, and the future," Artefactual Field Experiments 00079, The Field Experiments Website.
- Stephen Ziliak in Wikipedia (English)
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.