How to Calculate the P-Value in Excel

How to Calculate the P-Value in Excel

If you need to calculate the P-Value in Excel for hypothesis testing, you can easily calculate the P-Value by following certain instructions. This will show you whether the null hypothesis is supported strongly or weakly. So, let’s learn how to find the P-Value in Excel.

A p-value is a part of statistics, and it is the probability that the null hypothesis gives for a particular experimental result to occur. A null hypothesis is that the being tested theory is false, while an alternative hypothesis states the two variables are statistically significant. The “P” in the “P-Value” stands for Probability. It ranges from 0 to 1. If a P-Value is less than 0.05 (≤ 0.05), there is a statistical significance. However, if a p-value is higher than 0.05 (> 0.05), there is no statistical significance.

Even though the fields that require a P-value calculation broaden each day, calculating the P-Value is an operation generally encountered in writing an academic thesis. It is basically used for hypothesis testing. 

calculating the correlation

Calculating the Correlation

First, you need to calculate the difference between your variables. As you know spreadsheets have columns and rows. For example, let’s assume your variables are listed under the A and B columns and their range extends from the 1st row to the 10th. 

  • Look at the rows. You will see your variables. 
  • Subtract one variable from the other. 
  • Then, you need to make this calculation for every row. 
  • To do this calculation automatically, set the “Formula” to “A1-B1” and you will see the output.
  • The appearing number means that the subtraction is completed and what you see is the difference. 
  • In order to apply it to the rest of the data, drag the “Formula” to the rest of the cells. 
finding the p-value

Finding the P-Value

Now that you calculated the difference between your variables, it is time to calculate the P-Value.

  • Go to the “Data” tab. It is located at the top of the screen.
  • When you click the “Data” tab, it will open up a ribbon.
  • Click the “Data Analysis” which is located at the top right. 
  • A window will be open. Scroll down and find “t-Test: Paired Two Sample for Means” and click it and select “OK”. Another window will be open.
  • Select “Variable 1 Range” as your A column (the minuend).
  • Select “Variable 2 Range” as your B column (the subtrahend).
  • The “Alpha” means Alpha value. It is located below, and it will be default 0.05 since the most common levels of significance are 0.05 and 0.01. You can preserve it as 0.05
  • You will see the “Output Range” is listed below “Output Options”. Select the “Output Range” and write which cell you want to display the analysis results.
  • Click the “OK” button. You will see the analysis results in the cell you just wrote. 
  • Compare “P(T<=t) one-tail” and “P(T<=t) two-tail”. 
  • Focus on the “P(T<=t) one-tail”. If the P-value is greater than the “Alpha” value, which is 0.05 here, the null hypothesis is true. 

FAQ on How to Calculate the P-Value in Excel

What should be the range of P-Value?

0.05 is considered to be the borderline of statistical significance.

What is the null hypothesis?

It indicates that the theory you are testing is false; therefore incorrect.

What does the alternative hypothesis mean?

It means there is statistical significance between the two variables.

What should the “Alpha” value be?

It is default 0.05 but you can change it to 0.01. It depends on the level of significance you want.

How can I understand that the null hypothesis is true?

By looking at the “P(T<=t) one-tail”. If it is higher than the “Alpha” value, then the null hypothesis is true.

Conclusion on How to Calculate the P-Value in Excel

In this article, we explained how to find the P-value in Excel. In short, The P-Value qualifies the evidence. When you test a hypothesis, this function of the P-Value may help to assess the support or against the argument. Keep in mind that the lower your P-Value is, the higher the chance of the hypothesis is true. If this was enough to spark an interest in you, then you might want to check out another popular and useful formula, namely the standard deviation.

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Ralph

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After working for so many years in the screenwriting business, Ralph decided that he needed to be more involved with the digital world. Therefore he became a content writer by putting his skills into practice after learning about subjects he's interested in, mostly social media.

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