Monday, October 09, 2006

Significance vs. Substance

Does your analysis have 'oomph'?

Apparently this is technical term in economic circles -- it summarizes the idea that 'statistical significance' is not what analysis is about. Rather the focus should be on How Much of a difference something makes not Whether it makes a difference.

Deirdre McCloskey makes this point in Secret Sins of Economics.

In short, statistical significance is neither necessary nor sufficient for a result to be scientifically significant. Most of the time it is irrelevant. A researcher is simply committing a scientific error to use it as ….an all-purpose way of judging whether a number is large enough to matter. Mattering is a human matter; the numbers figure, but after collecting them the mattering has to be decided finally by us; mattering does not inhere in a number.

The point is that we should ask: How much impact does {insert variable here} have on customer behavior?

For marketing the question isn't whether something is significant but rather whether it has substance - or oomph, a term that fits well in the creative vernacular.

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