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The cult of statistical significance. What economists should and should not do to make their data talk

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  • Walter Krämer

Abstract

This article takes issue with a recent book by Ziliak and McCloskey (2008) of the same title. Ziliak and McCloskey argue that statistical significance testing is a barrier rather than a booster for empirical research in economics and should therefore be abandoned altogether. The present article argues that this is good advice in some research areas but not in others. Taking all issues which have appeared so far of the German Economic Review and a recent epidemiological meta-analysis as examples, it shows that there has indeed been a lot of misleading work in the context of significance testing, and that at the same time many promising avenues for fruitfully employing statistical significance tests, disregarded by Ziliak and McCloskey, have not been used.

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Bibliographic Info

Paper provided by German Council for Social and Economic Data (RatSWD) in its series Working Paper Series of the German Council for Social and Economic Data with number 176.

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Length: 16
Date of creation: 2011
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Handle: RePEc:rsw:rswwps:rswwps176

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  1. Bachmann, Ronald & Burda, Michael C, 2007. "Sectoral Transformation, Turbulence, and Labour Market Dynamics in Germany," CEPR Discussion Papers 6226, C.E.P.R. Discussion Papers.
  2. Lovell, Michael C, 1983. "Data Mining," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 1-12, February.
  3. Bettina Becker & Silke Uebelmesser, 2010. "Health Insurance Competition in Germany - The Role of Advertising," Discussion Paper Series 2010_05, Department of Economics, Loughborough University, revised Mar 2010.
  4. Walter Kraemer & Gerhard Arminger, 2010. ""True Believers" or Numerical Terrorism at the Nuclear Power Plant," CESifo Working Paper Series 3180, CESifo Group Munich.
  5. Martínez-Zarzoso, Inmaculada & Nowak-Lehmann D., Felicitas & Klasen, Stefan & Larch, Mario, 2008. "Does German Development Aid Promote German Exports?," Proceedings of the German Development Economics Conference, Zurich 2008 26, Verein für Socialpolitik, Research Committee Development Economics.
  6. McCloskey, Donald N, 1985. "The Loss Function Has Been Mislaid: The Rhetoric of Significance Tests," American Economic Review, American Economic Association, vol. 75(2), pages 201-05, May.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. About the cult of statistical significance
    by Economic Logician in Economic Logic on 2012-03-07 14:40:00
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Cited by:
  1. Hübler, Olaf, 2013. "Methods in empirical economics - a selective review with applications," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-513, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  2. Bücker, Michael & van Kampen, Maarten & Krämer, Walter, 2013. "Reject inference in consumer credit scoring with nonignorable missing data," Journal of Banking & Finance, Elsevier, vol. 37(3), pages 1040-1045.

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