Step 1: Statistical Significance
This section shows how to identify statistically significant coefficients, and a basic idea of how to interpret that statistical significance.
% shift to Trump, 2012-2016 | |
median income ($1,000s) | -0.158* |
(0.006) | |
Constant | 8.337* |
(0.351) | |
Observations | 3,111 |
Adjusted R2 | 0.203 |
Note: | * p<0.05 |
- The coefficient/slope for county income, \(-0.158\), is starred. This indicates that it is a statistically significant coefficient.
- The star indicates that we believe that the direction of the best fit line/the sign of the coefficient is not zero with at least 95% confidence.
- The confidence threshold here is 95% because \(p<0.05\). If the p-value were set to 0.01, we would be working with a 99% confidence threshold. If \(p<0.001\), then the confidence threshold would be 99.9%.
Additional notes:
- Not all regression tables use stars to indicate statistical significance. You can roughly calculate whether the coefficient/slope will be starred by using the number in parentheses below the coefficient. This is the standard error, a measure of confidence in the coefficient. If \(2*(\text{standard error}) < |\text{coefficient}|\), then there is likely to be a star on the coefficient.
- As shown below, this inequality is true in this case, so there is a star on \(-0.158\).
- In general, the coefficient for the constant term is ignored regardless of its statistical significance.