Statistical Significance Testing in Science and in the Courts after Matrixx

Expert Witnesses Newsletter, American Bar Association Section of Litigation, Winter 2013, Forthcoming

6 Pages Posted: 26 Mar 2013 Last revised: 28 Mar 2013

See all articles by David A. Gulley

David A. Gulley

Columbia University - Department of Industrial Engineering and Operations Research (IEOR)

Date Written: March 8, 2013

Abstract

The decision by the U.S. Supreme Court in the "Matrixx" case has caused some confusion about statistical significance and materiality. This article clarifies the role of statistical significance testing in the sciences and examines how it is used in securities litigation to evaluate the materiality of disclosures. The article concludes that SCOTUS was not repudiating significance tests of stock price movements, but was instead commenting on statistical significance in a different context, i.e., adverse incident reports.

Keywords: SCOTUS, Matrixx, significance, materiality

JEL Classification: C12, K00

Suggested Citation

Gulley, David Anthony, Statistical Significance Testing in Science and in the Courts after Matrixx (March 8, 2013). Expert Witnesses Newsletter, American Bar Association Section of Litigation, Winter 2013, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2238734

David Anthony Gulley (Contact Author)

Columbia University - Department of Industrial Engineering and Operations Research (IEOR) ( email )

331 S.W. Mudd Building
500 West 120th Street
New York, NY 10027
United States

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