The importance of statistical tests – statistical significance and confidence interval

When you start doing more serious research you will need to conduct a statistical test. It helps you to determine weather you hypothesis is significant or can be rejected. If you start browsing for statistical tests online, you will find a large number of possible test that can be chosen depending on you task. In this post lets focus on simple example of statistical test that would let us understand what is statistical significance and what is confidence interval. Building a test scenario In order to understand the matter lets use some random data which is distributed normally. For this we can use 100 hypothetical observations of price tag for new Nokia 3310 from different sources. The average of price is around 50€ with standard deviation of 10€ Now lets plot how those samples are distributed along with normal distribution graph:

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