Tests of Hypotheses
Hypothesis testing helps to decide on the basis of a sample data, whether a hypothesis about the population is likely to be true or false. Statisticians have developed several tests of hypotheses (also known as the tests of significance) for the purpose of testing of hypotheses which can be classified as:
(a) Parametric tests or standard tests of hypotheses
(b) Non-parametric tests or distribution-free test of hypotheses.
Parametric tests usually assume certain properties of the parent population from which we draw samples. Assumptions like observations come from a normal population, sample size is large, assumptions about the population parameters like mean, variance, etc., must hold good before parametric tests can be used. But there are situations when the researcher cannot or does not want to make such assumptions. In such situations we use statistical methods for testing hypotheses, which are called non-parametric tests because such tests do not depend on any assumption about the parameters of the parent population. Besides, most non-parametric tests assume only nominal or ordinal data, whereas parametric tests require measurement equivalent to at least an interval scale. As a result, non-parametric tests need more observations than parametric tests to achieve the same size of Type I and Type II errors.