Marketing Research

Parametric and Non Parametric Tests

DTU
Delhi School of
Management
Dr. Ansh Gupta
Ph.D (Marketing)
IIM Lucknow
Class Guidelines

NO QUESTION
IS WRONG

NO CROSS TALKS
 The MR Process
• Problem Definition
1

• Research Objectives , Frameworks, Models, Hypotheses

2

• Formulating Research Design

3

• Field Work or Data collection

4

• Data Preparation and Analysis

5

• Report Preparation and Presentation

6
 Conducting Cross Tabs
While conducting cross-tabulation analysis in practice, it is useful to proceed
along the following steps.
1. Test the null hypothesis that there is no association between the variables using
the chi-square statistic. If you fail to reject the null hypothesis, then there is no
relationship. If p-values if greater than pre-determined level of significance (e.g.
0.05) than at 95% level confidence interval, we FAIL to reject the null hypothesis.
2. If H0 is rejected, then determine the strength of the association using an
appropriate statistic (phi-coefficient, contingency coefficient, Cramer's V,
lambda coefficient, or other statistics).
3. If H0 is rejected, interpret the pattern of the relationship by computing the
percentages in the direction of the independent variable, across the dependent
variable.
4. If the variables are treated as ordinal rather than nominal, use tau b, tau c, or
Gamma as the test statistic. If H0 is rejected, then determine the strength of the
association using the magnitude, and the direction of the relationship using the
sign of the test statistic.
 t-Test
The t statistic assumes that the variable is normally distributed and
the mean is known (or assumed to be known) and the population
variance is estimated from the sample.

Assume that the random variable X is normally distributed, with

mean and unknown population variance that is estimated by the
sample variance s2.

Then, is t distributed with n - 1 degrees of freedom.

Null Hypothesis for one sample t-test –

H0: Mean is less than or equal to the mid value of metric scale
t-Test Marketing Application
2 independent Sample Means
t- tests : testing means of 2 independent samples
of 2 different populations.
H :  
0 1 2

H :  
1 1 2

An F test of sample variance may be performed if

it is not known whether the two populations have
equal variance.
n1 n2 2 2
( X i1
-
X ) + ( X
1
2
i2
-
2

X ) or s2 =
2
(n 1 - 1) s1 + (n 2-1) s2
 i 1 i 1
2
s n + n -2
1 2
n1 + n2 -2

H0: There is NO difference between the two sample means

Marketing Application
 Paired Samples Tests
Paired sample test is done to test the difference
between 2 variables from the same sample.
:  = 0
H0 D
H1:  D  0

- sample
H0: There is NO difference between theDtwo D
means
tn-1 =
sD
To compute t for paired nsamples,
the paired
difference variable, denoted by D, is formed and
its mean and variance calculated. Then the t
statistic is computed.
Marketing Application
 Testing on Standardized Variables

First step is to convert the data into

standardized form
Steps :
Analyse>Descriptive Statistics > Descriptives
Click on Save Standardized Variables
 Conducting Non-
Parametric Analysis
 NP One-sample test
Testing whether the observations for a particular
variable could reasonably have come from a
particular distribution, such as the normal, Chi-Sq, or
Poisson distribution.

H0: Variable does not follow normal distribution

Kolmogorov-Smirnov (K-S) one-sample test

Chi-square test
Binomial test
Runs test
 NP One-sample test

The chi-square test can also be performed on a single

variable from one sample. In this context, the chi-square
serves as a goodness-of-fit test.
The runs test is a test of randomness for the
dichotomous variables. This test is conducted by
determining whether the order or sequence in which
observations are obtained is random.
The binomial test is also a goodness-of-fit test for
dichotomous variables. It tests the goodness of fit of the
observed number of observations in each category to the
number expected under a specified binomial distribution.
 NP Two Independent sample test
• When objective is to compare that 2 samples are from same
population (i.e., that the two populations have the same shape)
based on observations from two independent samples, and the
variable is measured on an ordinal scale, the Mann-Whitney U test
can be used.
• In the Mann-Whitney U test, the two samples are combined and
the cases are ranked in order of increasing size.
• The test statistic, U, is computed as the number of times a score
from sample or group 1 precedes a score from group 2.
• If the samples are from the same population, the distribution of
scores from the two groups in the rank list should be random. An
extreme value of U would indicate a nonrandom pattern, pointing
to the inequality of the two groups.

H0: Two samples do not come from the same population

 NP Paired sample test
• The Wilcoxon matched-pairs signed-ranks test
analyzes the differences between the paired
observations, taking into account the magnitude
of the differences.
• It computes the differences between the pairs of
variables and ranks the absolute differences.
• The next step is to sum the positive and negative
ranks. The test statistic, z, is computed from the
positive and negative rank sums.
• H0: Two samples do not have any difference.
 Marketing Research
Parametric and Non Parametric Tests

DTU
Delhi School of
Management
Dr. Ansh Gupta
Ph.D (Marketing)
IIM Lucknow