What are non parametric methods?

A commonly used method in statistics where

small sample sizes are used to analyze nominal data. Nonparametric method is used when the researcher does not know anything about the parameters of the sample chosen from the population.

Non-parametric statistics (in the sense of a statistic over data,

which is defined to be a function on a sample that has no dependency on a parameter), whose interpretation does not depend on the population fitting any parameterised distributions. Order statistics, which are based on the ranks of observations, are one example of such statistics and these play a central role in many non-parametric approaches.

 Non-parametric methods are widely used for studying populations that take on a ranked order (such as movie reviews receiving one to four stars). The use of non-parametric methods

may be necessary when data have a ranking but no clear numerical interpretation, such as when assessing preferences. In terms of levels of measurement, non-parametric methods result in "ordinal" data.

Types of Non-parametric Methods

The two commonly used non-parametric correlations are : Spearmans Rank Correlation Kendall Tau

Spearman's Rank Correlation

In statistics, Spearman's rank correlation

coefficient or Spearman's rho, named after Charles Spearman and often denoted by the Greek letter (rho) or as , is a non-parametric measure of statistical dependence between two variables. It assesses how well the relationship between two variables can be described using a monotonic function. If there are no repeated data values, a perfect Spearman correlation of +1 or 1 occurs when each of the variables is a perfect monotone function of the other.

 Two sets of variables are taken and ranks are assigned

according to their positions in the ascending order of the values. Differences between the ranks of each observation on the two variables are calculated, and is given by:

Example :

 The standard error of the coefficient () was

determined by Pearson in 1907 and Gosset in 1920. It is

Hypothesis
If the value is -1, there is a perfect negative correlation If the value falls between -1 and -0.5, there is a strong negative

correlation If the value falls between -0.5 and 0, there is a weak negative correlation If the value is 0, there is no correlation If the value falls between 0 and 0.5, there is a weak positive correlation If the value falls between 0.5 and 1, there is a strong positive correlation If the value is 1, there is a perfect positive correlation between the 2 sets of data. If the value is 0, state that null hypothesis is accepted. Otherwise, say it is rejected.

Kendall Rank Correlation Coefficient

The Kendall rank correlation coefficient,

commonly referred to as Kendall's tau () coefficient, is a statistic used to measure the association between two measured quantities. A tau test is a non parametric hypothesis test for statistical dependence based on the tau coefficient. Specifically, it is a measure of rank correlation, i.e., the similarity of the orderings of the data when ranked by each of the quantities. It is named after Maurice Kendall, who developed it in 1938.

 Let (x1, y1), (x2, y2), , (xn, yn) be a set of observations

of the joint random variables X and Y respectively, such that all the values of (xi) and (yi) are unique. Any pair of observations (xi, yi) and (xj, yj) are said to be concordant if the ranks for both elements agree: that is, if both xi > xj and yi > yj or if both xi < xj and yi < yj. They are said to be discordant, if xi > xjand yi < yj or if xi < xj and yi > yj. If xi = xj or yi = yj, the pair is neither concordant nor discordant.

 The Kendall coefficient is defined as:

Hypothesis test
The Kendall rank coefficient is often used as a test

statistic in a statistical hypothesis test to establish whether two variables may be regarded as statistically dependent. This test is non-parametric, as it does not rely on any assumptions on the distributions of X or Y or the distribution of (X,Y).

Advantages of Non-parametric Methods

Nonparametric methods require no or very limited

assumptions to be made about the format of the data, and they may therefore be preferable when the assumptions required for parametric methods are not valid. Nonparametric methods can be useful for dealing with unexpected, outlying observations that might be problematic with a parametric approach.

 Nonparametric methods are intuitive and are simple to

carry out by hand, for small samples at least. Nonparametric methods are often useful in the analysis of ordered categorical data in which assignation of scores to individual categories may be inappropriate. For example, non-parametric methods can be used to analyse soft drink consumption directly using the categories never, a few times per year, monthly, weekly, a few times per week, daily and a few times per day. In contrast, parametric methods require scores (i.e. 17) to be assigned to each category.

Disadvantages of Non-parametric Methods

Nonparametric methods may lack power as compared

with more traditional approaches . This is a particular concern if the sample size is small or if the assumptions for the corresponding parametric method. Nonparametric methods are geared toward hypothesis testing rather than estimation of effects. It is often possible to obtain nonparametric estimates and associated confidence intervals, but this is not generally straightforward.

 Tied values can be problematic when these are

common, and adjustments to the test statistic may be necessary. Appropriate computer software for nonparametric methods can be limited, although the situation is improving. In addition, how a software package deals with tied values or how it obtains appropriate P values may not always be obvious.

Conclusion
Non parametric methods helps statisticians to find out

the Non-Parametric along with Parametric methods helps us in research in offices,hospitals,schools.etc.

Find the correlation between the price of potatoes and onions.

Year 1988 1989 Potatoes Prices (Rs/1kg) 66.60 69.50 Onion Prices (Rs/1kg) 69.10 66.10

1990
1991 1992 1993 1994 1995 1996 1997

74.60
72.70 71.30 72.60 66.70 61.80 58.70 63.10

55.50
52.20 59.50 64.40 65.60 78.20 82.80 90.30

1998 1999
2000

59.60 63.40
68.60

72.30 74.50
79.40

Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Potatoes Prices (Rs/1kg) 66.60 69.50 74.60 72.70 71.30 72.60 66.70 61.80 58.70 63.10 59.60 63.40 68.60

Onion Prices (Rs/1kg) 69.10 66.10 55.50 52.20 59.50 64.40 65.60 78.20 82.80 90.30 72.30 74.50 79.40

Rank: Potatoes 6 9 13 12 10 11 7 3 1 4 2 5 8

Rank: Onions 7 6 2 1 3 4 5 10 12 13 8 9 11

d -1 3 11 11 7 7 2 -7 -11 -9 -6 -4 -3

d2 1 9 121 121 49 49 4 49 121 81 36 16 9 666