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Non-Parametric Tests

Non-parametric tests are statistical methods that do not require data to meet specific distribution assumptions, making them suitable for skewed data or small sample sizes. The chi-square test, introduced by Karl Pearson, is a non-parametric test used for analyzing categorical data to determine the likelihood of observed frequencies versus expected frequencies. It is important to apply non-parametric tests when parametric test assumptions are not met, particularly for ordinal or nominal data.

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4 views

Non-Parametric Tests

Non-parametric tests are statistical methods that do not require data to meet specific distribution assumptions, making them suitable for skewed data or small sample sizes. The chi-square test, introduced by Karl Pearson, is a non-parametric test used for analyzing categorical data to determine the likelihood of observed frequencies versus expected frequencies. It is important to apply non-parametric tests when parametric test assumptions are not met, particularly for ordinal or nominal data.

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abhilashaupadhyaya
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Non-Parametric Tests

Chi square Test


GEU-2021
Non-Parametric Tests
In statistics, nonparametric tests are methods of statistical analysis that
do not require a distribution to meet the required assumptions to be
analyzed (especially if the data is not normally distributed). Due to this
reason, they are sometimes referred to as distribution-free tests.
Nonparametric tests serve as an alternative to parametric tests such as
T-test or ANOVA that can be employed only if the underlying data
satisfies certain criteria and assumptions.

 Note that nonparametric tests are used as an alternative method to


parametric tests, not as their substitutes. In other words, if the data
meets the required assumptions for performing the parametric tests,
the relevant parametric test must be applied.
 In addition, in some cases, even if the data do not meet the necessary
assumptions but the sample size of the data is large enough, we can
still apply the parametric tests instead of the nonparametric tests.
Reasons to Use Nonparametric Tests
In order to achieve the correct results from the statistical analysis, we should know the
situations in which the application of nonparametric tests is appropriate. The main reasons
to apply the nonparametric test include the following:

1. The underlying data do not meet the assumptions about the population sample
Generally, the application of parametric tests requires various assumptions to be satisfied. For
example, the data follows a normal distribution and the population variance is homogeneous.
However, some data samples may show skewed distributions. The skewness makes the parametric
tests less powerful because the mean is no longer the best measure of central tendency because it is
strongly affected by the extreme values. At the same time, nonparametric tests work well with skewed
distributions and distributions that are better represented by the median.

2. The population sample size is too small


The sample size is an important assumption in selecting the appropriate statistical method. If a sample
size is reasonably large, the applicable parametric test can be used. However, if a sample size is too
small, it is possible that you may not be able to validate the distribution of the data. Thus, the
application of nonparametric tests is the only suitable option.

3. The analyzed data is ordinal or nominal


Unlike parametric tests that can work only with continuous data, nonparametric tests can be applied
Chi Square Test
 A chi-squared test (symbolically represented as χ2) is basically a data analysis on
the basis of observations of a random set of variables. Usually, it is a comparison
of two statistical data sets. This test was introduced by Karl Pearson in 1900 for
categorical data analysis and distribution. So it was mentioned as Pearson’s chi-
squared test.

 The chi-square test is used to estimate how likely the observations that are made
would be, by considering the assumption of the null hypothesis as true.
 Chi-Square Distribution
When we consider, the null speculation is true, the sampling distribution of the
test statistic is called as chi-squared distribution. The chi-squared test helps to
determine whether there is a notable difference between the normal frequencies
and the observed frequencies in one or more classes or categories. It gives the
probability of independent variables.

Note: Chi-squared test is applicable only for categorical data, such as men and
women falling under the categories of Gender, Age, Height, etc.

 Finding P-Value
P stands for probability here. To calculate the p-value, the chi-square test is used
in statistics. The different values of p indicates the different hypothesis
interpretation, are given below:

 P≤ 0.05; Hypothesis rejected


 P>.05; Hypothesis Accepted
 Properties
The following are the important properties of the chi-square test:
• Two times the number of degrees of freedom is equal to the variance.
• The number of degree of freedom is equal to the mean distribution
• The chi-square distribution curve approaches the normal distribution when the
degree of freedom increases.

Formula

The chi-squared test is done to check if there is any difference between the
observed value and expected value. The formula for chi-square can be written as;
or

χ2 = ∑(Oi – Ei)2/Ei

where Oi is the observed value and Ei is the expected value.

Chi-Square Test of Independence


The chi-square test of independence also known as the chi-square test of association which
is used to determine the association between the categorical variables. It is considered as
a non-parametric test. It is mostly used to test statistical independence.

The chi-square test of independence is not appropriate when the categorical variables
represent the pre-test and post-test observations. For this test, the data must meet the
following requirements:

Two categorical variables


Relatively large sample size
Categories of variables (two or more)
Independence of observations
Another Example
Another Example
Practice Problems

 Please refer to the Word document separately uploaded for the


problems to be practiced.
Annexure- Chi Square Table
References

 Text Book:
 Kothari, C. R., & Garg, G. (2019). Research methodology: Methods
and techniques. In Research methodology: Methods and techniques.
New Delhi: New Age International (P) Limited.
 Reference Books:
 Mishra, P. (2015). Business research methods. New Delhi: Oxford
University Press
 Chawla, D., & Sondhi, N. (2011). Research methodology: Concepts
and cases. New Delhi: Vikas Publishing House.
 Sharma, J. K. (2014). Business statistics. In Business statistics. New
Delhi: Vikas Publishing House Pvt.

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