Test of significance is a statistical method used to determine whether the observed results in a

study are unlikely to have occurred by chance. The aim is to assess whether there is enough
evidence to reject a null hypothesis in favor of an alternative hypothesis. Here's an overview of
how tests of significance work:
1. Formulating Hypotheses: The test begins by formulating two hypotheses:
• Null hypothesis (H0): This is a statement of no effect or no difference. It is the
default assumption that the researcher seeks to test against.
• Alternative hypothesis (Ha): This is a statement indicating the presence of an
effect or difference. It is what the researcher is trying to provide evidence for.
2. Choosing a Significance Level: The researcher selects a significance level (commonly
denoted as alpha, α) before conducting the test. This is the threshold probability for
rejecting the null hypothesis, typically set at 0.05 (5%) or 0.01 (1%).
3. Calculating a Test Statistic: Depending on the type of data and the research question, the
researcher uses an appropriate statistical test (e.g., t-test, chi-square test, ANOVA) to
calculate a test statistic. This statistic measures how extreme the observed data is under the
assumption that the null hypothesis is true.
4. Determining the P-Value: The p-value is the probability of obtaining a test statistic as
extreme as the one observed, assuming the null hypothesis is true. It quantifies the strength
of evidence against the null hypothesis.
5. Making a Decision: Compare the p-value to the significance level (α):
• If p-value ≤ α: Reject the null hypothesis in favor of the alternative hypothesis.
This suggests that there is a statistically significant effect or difference.
• If p-value > α: Fail to reject the null hypothesis. This suggests that there is not
enough evidence to support the alternative hypothesis.
6. Reporting and Interpretation: Researchers report the results of the test, including the test
statistic, p-value, and conclusion about the hypotheses. They also interpret the practical
significance of the findings in the context of the study.

Parametric Test
A parametric test is a type of statistical test that makes certain assumptions about the parameters
(such as the mean and standard deviation) of the underlying population distribution from which
the data is drawn. These tests are used to analyze data and draw inferences about the population
based on a sample.
Assumptions About Parametric Tests
1. Normality: The data (or the residuals of the model, in some cases) should be approximately
normally distributed. This is especially important for smaller sample sizes.
2. Homoscedasticity: The variance of the residuals (the differences between observed and
predicted values) should be consistent across different levels of an independent variable.
3. Independence: Observations should be independent of each other. This means the value
of one observation should not influence the value of another.
4. Linearity: For tests involving regression models, the relationship between the independent
and dependent variables should be linear.
 5. Sample Size: Parametric tests typically require larger sample sizes compared to non-
parametric tests to achieve reliable results.
6. Interval/Ratio Data: Parametric tests are usually applied to data measured on an interval
or ratio scale.
Types of Parametric Tests
1. t-Tests:
• One-sample t-test: Compares the mean of a sample to a known value or population
mean.
• Independent two-sample t-test: Compares the means of two independent groups.
• Paired t-test: Compares the means of two related groups (e.g., pre- and post-
treatment).
2. Analysis of Variance (ANOVA):
• One-way ANOVA: Tests differences in means across three or more independent
groups.
• Two-way ANOVA: Tests differences across two independent variables.
• Repeated Measures ANOVA: Tests differences across multiple measurements
within the same group.
3. Analysis of Covariance (ANCOVA):
• Tests differences between groups while controlling for the effects of one or more
covariates.
4. Linear Regression:
• Analyzes the relationship between one or more independent variables and a
dependent variable.
5. Correlation Tests:
• Pearson correlation: Measures the strength and direction of a linear relationship
between two continuous variables.
6. Multiple Linear Regression:
• Models the relationship between multiple independent variables and a single
dependent variable.
7. Multivariate Analysis of Variance (MANOVA):
• Extends ANOVA to multiple dependent variables.

Nonparametric Tests
Nonparametric tests are statistical tests that do not rely heavily on assumptions about the
distribution of the data. These tests are often used when the data does not meet the assumptions
required for parametric tests. Here is an overview of nonparametric tests and their assumptions
explained in simple language:
Assumptions About Nonparametric Tests
1. No Assumption of Normality: Nonparametric tests do not assume that the data is normally
distributed, so they can be used when data is skewed or contains outliers.
2. Robust to Outliers: Nonparametric tests are less sensitive to outliers (extreme values) in
the data compared to parametric tests.
3. Ordinal Data: Nonparametric tests can work with data that is not on a strict interval or
ratio scale. This includes ordinal data, where values have a specific order but the distances
between them are not necessarily equal.
4. Less Sensitive to Unequal Variances: Nonparametric tests are generally less concerned
with differences in variances across groups (heteroscedasticity).
5. Independence: Like parametric tests, nonparametric tests assume that observations are
independent of each other. This means that one observation should not influence another.
6. Sample Size: Nonparametric tests can often be used with smaller sample sizes, but some
tests may require a minimum sample size for reliable results.
Examples of Nonparametric Tests
1. Mann-Whitney U Test (Wilcoxon Rank-Sum Test): A test for comparing differences
between two independent groups. It's often used as an alternative to the independent two-
sample t-test when the data does not meet parametric assumptions.
2. Wilcoxon Signed-Rank Test: A test for comparing differences between two related
groups (e.g., before and after treatment). It's an alternative to the paired t-test.
3. Kruskal-Wallis Test: A test for comparing differences across three or more independent
groups. It's an alternative to one-way ANOVA.
4. Spearman's Rank Correlation: Measures the strength and direction of a monotonic
relationship between two variables. It's an alternative to Pearson correlation when data does
not meet the parametric assumptions.

Chi-Square Test
The chi-square test (also known as the chi-squared test) is a statistical test that evaluates the
relationship between categorical variables (variables that have distinct categories, such as color,
type, or group). The test compares the observed frequencies (the actual counts from data) with
expected frequencies (the counts we would expect to see if there were no association between the
variables) in a contingency table.
Characteristics
1. Non-Parametric Test: The chi-square test is non-parametric, meaning it doesn't assume
any particular distribution of the data.
2. Categorical Data: It is used for data in the form of counts or frequencies (e.g., the number
of people who prefer a certain color).
3. Comparison of Frequencies: The test compares observed frequencies (actual data counts)
with expected frequencies (theoretical counts) in a contingency table.
4. Degree of Freedom: The test uses degrees of freedom to adjust for the number of
categories or groups being analyzed. Degrees of freedom are calculated based on the
number of rows and columns in the contingency table.
 5. P-Value: The test provides a p-value, which indicates the likelihood that the observed
association is due to chance. A low p-value suggests a significant association.
Application
1. Testing Independence: The chi-square test is often used to test whether two categorical
variables are independent of each other (e.g., whether gender and preference for a particular
product are independent).
2. Goodness-of-Fit: It can be used to test whether an observed frequency distribution fits a
particular expected distribution.
3. Hypothesis Testing: It is used in hypothesis testing to assess whether there is a significant
association between two or more groups or categories.
4. Contingency Tables: The test is typically applied to contingency tables (tables showing
the frequency distribution of variables) to assess the relationship between the variables.

T-Test
The t-test is a type of hypothesis test that is used to compare the means (averages) of two groups.
The test calculates a t-value, which measures the difference between the means relative to the
variability in the data. A higher t-value suggests a larger difference between the group means.
Assumptions
1. Normal Distribution: The data in each group should be approximately normally
distributed, especially if the sample sizes are small.
2. Equal Variance: In some versions of the t-test (e.g., independent t-test), it is assumed that
the two groups have equal variances (similar levels of variability in their data). This is
known as homoscedasticity.
3. Independence: The data in each group should be independent of each other, meaning the
data points in one group are not related to the data points in the other group.
4. Scale of Measurement: The data should be measured on an interval or ratio scale, which
means it has a consistent scale and zero point (e.g., height, weight, age).
Applications
1. Comparing Group Means: The t-test is commonly used to compare the means of two
groups (e.g., test scores of students from two different schools).
2. Testing Hypotheses: It is used in hypothesis testing to determine whether there is a
significant difference between the means of two groups.
3. Paired t-Test: This variation of the t-test is used when comparing means from the same
group measured at different times or under different conditions (e.g., before and after a
treatment).
4. Independent t-Test: This is used when comparing the means of two independent groups
(e.g., a control group and an experimental group).
5. Two-Sample t-Test: Also known as an independent samples t-test, this is used to compare
the means of two unrelated groups.
F-test
The F-test is often used to compare the variances of two groups, such as in an analysis of variance
(ANOVA) to assess whether different groups have similar or different variability. The test is
named after Sir Ronald A. Fisher, who developed it.
The F-test calculates the ratio of the variances of two samples and checks if this ratio is
significantly different from 1 (which would indicate the variances are different).
Assumptions
1. Independence: The samples must be independent of each other.
2. Normality: The data in each group should be approximately normally distributed,
especially if the sample sizes are small.
3. Equal Variance: The F-test is designed to compare the variances of two groups. However,
this assumption can be a bit tricky. In some cases, if the variances are known to be unequal,
alternative tests such as Welch's ANOVA can be used.
Applications
1. Comparing Variances: The most straightforward use of the F-test is comparing the
variances of two groups. For example, it can be used to test whether the variances in test
scores between two different teaching methods are the same.
2. Analysis of Variance (ANOVA): In ANOVA, the F-test is used to determine whether
there are any statistically significant differences between the means of three or more
independent groups.
3. Regression Analysis: In regression analysis, the F-test is used to test the overall
significance of the regression model. It checks whether the independent variables, as a
group, explain a significant portion of the variation in the dependent variable.

z-test
z-test is a type of hypothesis test that helps determine whether the observed difference between a
sample mean and a population mean (or between the means of two independent samples) is
statistically significant. It calculates a z-score, which measures how many standard deviations a
data point is from the mean.
Assumptions
1. Normal Distribution: The data should follow a normal distribution, especially for smaller
sample sizes.
2. Known Population Variance: The variance (spread) of the population is known, which is
a key difference from the t-test.
3. Large Sample Size: The z-test is most reliable with larger sample sizes (usually n > 30).
4. Independence: The data points in the sample(s) should be independent of each other.
Applications
1. Testing Population Mean: The z-test can be used to test if a sample mean is significantly
different from a known population mean.
2. Comparing Two Means: It can be used to compare the means of two independent samples
(e.g., the average heights of two different groups).
3. Proportions: The z-test can also be used to compare proportions between two groups or a
sample proportion with a population proportion.
4. Quality Control: In manufacturing, z-tests can be used to check if a sample's mean is
within acceptable limits compared to a population mean.
5. Market Research: In market research, z-tests can be used to compare the average
responses of two groups (e.g., customer satisfaction levels between two different customer
segments).