A Guide To Conduct Analysis Using Non-Parametric Statistical Tests

A Guide To Conduct Analysis Using Non-Parametric Statistical Tests

Introduction

The average salary package of an economics honors graduate at Hansraj College during the end of the 1980s was around INR 1,000,000 p.a. The number is significantly higher than people graduating in early 80s or early 90s.

What could be the reason for such a high average? Well, one of the highest paid Indian celebrity, Shahrukh Khan graduated from Hansraj College in 1988 where he was pursuing economics honors.

This, and many such examples tell us that average is not a good indicator of the center of the data. It can be extremely influenced by Outliers. In such cases, looking at median is a better choice. It is a better indicator of the center of the data because half of the data lies below the median and the other half lies above it.

So far, so good – I am sure you have seen people make this point earlier. The problem is no one tells you how to perform the analysis like hypothesis testing taking median into consideration.

Statistical tests are used for making decisions. To perform analysis using median, we need to use non-parametric tests. Non-parametric tests are distribution independent tests whereas parametric tests assume that the data is normally distributed. It would not be wrong to say parametric tests are more infamous than non-parametric tests but the former does not take median into account while the latter makes use of median to conduct the analysis.

Without wasting any more time, let’s dive into the world of non-parametric tests.

Note: This article assumes that you have prerequisite knowledge of hypothesis testing, parametric tests, one-tailed & two-tailed tests.

Table of Contents

1. How are non-parametric tests different from parametric tests?
2. When can I apply non-parametric tests?
3. Pros and Cons of non-parametric tests
4. Hypothesis testing with non-parametric tests.
5. Non-parametric test
   1. Mann Whitney U Test
   2. Wilcoxon Sign-Rank Test
   3. Sign Test
   4. Kruskal-Wallis Test
   5. Spearman Rank Correlation

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Regards!

Librarian

Rizvi Institute of Management