Statistical tests. Which one should you choose? - EU Seguros
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This is the framework to choose the right statistical test:

### 1 – Choose the type of data

Statistical variables can be classified as either measurable (continuous) or categorical(nominal or ordinal).

Categorical variables – these variables are qualitative-oriented.

1. Nominal – a nominal variable in relation to its group doesn’t have a rank. A good example is choosing your favorite color. Any color is a preference and does not hold a higher rank than other colors. Blue is the same as red.

2. Ordinal – an ordinal variable in relation to its group has a rank. A good example is the difference between a Ph.D., an MSc to a BSc all the way down to no formal education. So Ph.D. would rank 1st and no education would rank last.

Measurable variables – these variables are quantitative-oriented.

1. Interval – These include 0 value but not absolute. A good example is a Celsius scale vs a Fahrenheit scale. The scale is different and the 0 value is different as well.

2. Ratio –  Here the absolute 0 is included. The Kelvin scale is a good example. It uses an absolute 0.

### 2 – How many Samples

There are 3 options here:

1. One Sample

2. Two Samples

3. One Sample – two measurements (it always involves a table)

### 3 – What is the Purpose?

Here, you check the dotted boxes for the answer.

1. The top box (L-shaped) has the purpose of testing against a value. It has 3 possible tests:

If it is one sample it can be a test for a proportion or a test for a mean. You make your decision based on the type of data.

a) If it is a nominal variable it is a test for a proportion.

b) If it is an interval/ratio type of data then it is a test for a mean.

c) If it is one sample but with two measurements, then it is a difference of two means (paired).

2. The middlebox has the purpose of comparing two statistics.

a) If it is a nominal type of data the test is a difference of two proportions.

b) If it is an interval/ratio type of data then it is a difference of two means (independent samples).

3. The third(bottom) has the purpose of looking for a relationship. It has 2 options as well:

a) If it is a nominal type of data, it is the Chi-Squared test for independence.

b) If it is an interval/ratio type of data, then it is a regressions analysis.