What is Practical Significance?
Practical significance refers to the real-world importance or magnitude of an observed effect, difference, or relationship in a study. Unlike statistical significance, which tells us if a result is unlikely due to chance, practical significance assesses if the result is large enough to be meaningful or useful in a practical context. It addresses the question: 'Is this finding important in everyday life or for policy decisions?'
Distinction from Statistical Significance
A key principle is that statistical significance (often indicated by a p-value) and practical significance are not the same. A study can find a statistically significant result, meaning an effect exists beyond random chance, but this effect might be too small to have any practical implications. Conversely, a result might be practically significant but fail to reach statistical significance in a small study due to insufficient power. Researchers often use effect sizes (like Cohen's d or Pearson's r) to quantify practical significance, as these measures are independent of sample size.
Practical Example
Consider a new medication for reducing blood pressure. A study might find that the medication leads to a statistically significant average reduction of 0.5 mmHg. While statistically significant (p < 0.05), a 0.5 mmHg drop is clinically and practically insignificant, as it would not notably improve patient health or warrant the cost and potential side effects of the drug. However, a 10 mmHg reduction, even if found in a smaller study that barely reaches statistical significance, would likely be considered highly practically significant.
Importance in Decision-Making
Evaluating practical significance is crucial for making informed decisions in various fields, from medicine and engineering to education and social policy. It helps researchers, policymakers, and practitioners determine whether a finding warrants further investigation, implementation, or changes in practice. Focusing solely on statistical significance without considering practical relevance can lead to misinterpretations, wasted resources on trivial effects, or overlooking genuinely impactful findings.