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Error Costs, Legal Standards Of Proof And Statistical Significance, Michelle Burtis, Jonah B. Gelbach, Bruce H. Kobayashi
Error Costs, Legal Standards Of Proof And Statistical Significance, Michelle Burtis, Jonah B. Gelbach, Bruce H. Kobayashi
All Faculty Scholarship
The relationship between legal standards of proof and thresholds of statistical significance is a well-known and studied phenomena in the academic literature. Moreover, the distinction between the two has been recognized in law. For example, in Matrix v. Siracusano, the Court unanimously rejected the petitioner’s argument that the issue of materiality in a securities class action can be defined by the presence or absence of a statistically significant effect. However, in other contexts, thresholds based on fixed significance levels imported from academic settings continue to be used as a legal standard of proof. Our positive analysis demonstrates how a …