Hi,
Let me try again to explain. It's a good habit to ask
until the reason becomes clear and convincing.
At 10% significance level, p-value = 0.108 > 0.10 so
we do not reject the null hypothesis. In order to reject the null
hypothesis, there is a need to increase the significance level. If
we increase it to 10.8%, the p-value matches exactly to it, so that
we can reject the null hypothesis. Thus, 10.8% becomes the critical
value for the level of significance.
Now, another way to look at the level of significance is
this:a 10.8% level of significance refers to a probability of 0.108
of rejecting the null hypothesis when it is, in fact, true. We call
this a Type I error and we want to minimise this error as far as
possible.
When we increase the level of significance from 10% to
10.8% in order to reject the null hypothesis, we also increase this
Type I error at the same time. With the need to minimise this
error, we set a cap. Thus, the maximum that we should increase
to is the value of 10.8%.
I hope this is much clearer and more comprehensive than
all other explanations I have given thus far. Thanks for being
inquisitive, because that gave me the opportunity to go deeper than
usual :)
Thanks!
Cheers,
Wen Shih