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Math Help - Stats-Statistical and practical significance

  1. #1
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    Stats-Statistical and practical significance

    I'm a little confused with these two concepts. My book doesn't really explain them and I've done some research and I'm getting different meanings of the terms.
    Can someone give me a simple, straightforward definition of them?
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  2. #2
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    This is a very important issue in the Actuary Business. It usually surfaces with slightly different nomenclature:

    Actuarial Soundness vs. Social Acceptability

    In practice, it is an issue that can be proven and demonstrated, but is impossible to implement, being prevented by either social outcry or direct legislation.

    Examples may be a bit shocking.

    It is easy to collect Death Data from the United States population for the following two things (there are many other examples):

    1) Death Rates for those of African Descent are higher than those of Caucasians.

    2) Death Rates for Male Hair Dressers are higher than males in other professions - particularly in San Francisco.

    As far as practical significance, I dare you to design a life insurance policy that charges different premium rates for these demonstrably riskier groups. The State Insurance Departments will chase you down the street waving shovels and pitch forks!
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  3. #3
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    ....I'm still confused.
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