What are the major differences between pratical and statistical significance?
Statistical significance means the oberved mean differences are not likely due to dimpling error.
Practical significance looks at wether the difference is large enough to be of value in a practical sence.
For example, it is like adding an ingredient to a car's oil to improve the efficiency of the fuel. There is a need to have a careful controlled experiment by measuring the efficiency of the fuel before and afer introducing the additive. The findings of the experiment is that the difference is that the difference before and after has a statistcally significatly better, and come to the conclusion that the additive does improve the deficiency of the fuel. In the other hand the ingrdient has a cost of $100 a bottle, which effectives the savings in the efficiency of the fel. The diver does not really drive very much, so the conclusion is there is not much practically significant.
Does this sound like I am on the right path?
The idea is correct, but you need to proofread your post more adequately.
Yes, you are on the right path in understanding the differences between practical and statistical significance. Statistical significance refers to the probability that the observed difference between groups or variables is not due to random chance or sampling error. It helps determine whether an effect or relationship exists in the population being studied.
On the other hand, practical significance considers the magnitude or importance of the observed difference or effect. It asks whether the difference is large enough to be of value or have practical importance in real-world contexts. It takes into account factors such as cost, time, resources, and the potential impact of the observed effect.
Your example about adding an ingredient to a car's oil is a good illustration. If a careful controlled experiment shows that the additive improves the fuel efficiency and the statistical analysis confirms that the observed difference is unlikely due to chance, then there is statistical significance. However, if the cost of the additive is $100 per bottle and the driver does not drive much, the practical significance may be low because the potential savings in fuel efficiency may not justify the cost of the additive.
Keep in mind that both statistical and practical significance are important considerations in research and decision-making. Statistical significance helps establish the reliability of findings, while practical significance helps determine their meaningfulness in real-world scenarios.