A p-value can be thought of as a value with a set threshold that helps determine if two things are different enough from one another.
- The p-value is set on a scale of 0-1 where a threshold is set with values closer to 0 meaning a more confidence in different between parameters.
- A common threshold for a p-value is 0.05 percent to limit false positives without requiring to intensive effort for lower thresholds.
- p-value goes hand in hand with hypothesis testing to determine the rejection of a null hypothesis.
- The equation used to calculate the p-value in a function we will use in futures slides can be seen as \(p=2×P(T>∣t∣)\)