# Statistical Power

*Math & Statistics — Finicade finance glossary*

Statistical power is the probability of detecting an effect that genuinely exists — one minus the Type II error rate. Underpowered studies are the quiet epidemic of empirical research: with too small a sample, real effects go undetected, and the few results that clear significance are exaggerated by construction. In finance this is why decades of data are needed to distinguish a genuinely skilled manager from a lucky one.

**Formula:** `Power = 1 − P(Type II error)`

**Also known as:** power of a test, underpowered study

**Related terms:** [Type I and Type II Errors](https://finicade.com/glossary/type-i-and-type-ii-errors), [Hypothesis Test](https://finicade.com/glossary/hypothesis-test), [Sampling](https://finicade.com/glossary/sampling), [P-Value](https://finicade.com/glossary/p-value), [Statistical Significance](https://finicade.com/glossary/statistical-significance)

Source: https://finicade.com/glossary/statistical-power