Bonferroni Test

AAA

DEFINITION of 'Bonferroni Test'

A type of multiple comparison test used in statistical analysis. When an experimenter performs enough tests, he or she will eventually end up with a result that shows statistical significance, even if there is none. If a particular test yields correct results 99% of the time, running 100 tests could lead to a false result somewhere in the mix. The Bonferroni test attempts to prevent data from incorrectly appearing to be statistically significant by lowering the alpha value.




The Bonferroni test, also known as the "Bonferroni correction" or "Bonferroni adjustment" suggests that the "p" value for each test must be equal to alpha divided by the number of tests.






INVESTOPEDIA EXPLAINS 'Bonferroni Test'

The Bonferroni test is named for the Italian mathematician who developed it, Carlo Emilio Bonferroni (1892–1960). Other types of multiple comparison tests include Scheffe's test and the Tukey-Kramer method test. A criticism of the Bonferroni test is that it is too conservative and may fail to catch some significant findings.



RELATED TERMS
  1. Scheffe's Test

    A statistical test that is used to make unplanned comparisons, ...
  2. Null Hypothesis

    A type of hypothesis used in statistics that proposes that no ...
  3. Hypothesis Testing

    A process by which an analyst tests a statistical hypothesis. ...
  4. P-Value

    The level of marginal significance within a statistical hypothesis ...
  5. Correlation

    In the world of finance, a statistical measure of how two securities ...
  6. Statistically Significant

    The likelihood that a result or relationship is caused by something ...
Related Articles
  1. The Uses And Limits Of Volatility
    Markets

    The Uses And Limits Of Volatility

  2. Bet Smarter With The Monte Carlo Simulation
    Active Trading Fundamentals

    Bet Smarter With The Monte Carlo Simulation

  3. An Introduction To Value at Risk (VAR)
    Options & Futures

    An Introduction To Value at Risk (VAR)

  4. How To Convert Value At Risk To Different ...
    Active Trading Fundamentals

    How To Convert Value At Risk To Different ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center