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CP2 - Chi-square test

B

Bharti Singla

Senior Member
IFoA, April 2020 - Chi Square test

Method 1
Paper A - They have used a chi-square test to validate the random numbers fall into uniform distribution. Here, they have used an excel formula =CHHINV(probability, DOF) and gives 16.9 and compares it with sum of (a-e)^2/e

Method 2
Paper B - Here, they have used an another type of chi-square test using an excel formula =CHISQ.TEST(actual range, expected range) and compared it with probability 95%

But if I use the method 2 in Paper A by using the actual and expected ranges, I am getting a P-value of 71% which is less than 95% and test fails.
How do we know which formula to use for chi-square test?
 
I was confused about this earlier. I think the we should use the probability of 5% rather than 95% (which is extremely high) in paper 2 for testing. Hence, if you compare the P-value of 71% with 5%, the test should pass.
 
It would indeed be more appropriate for the value in 'Data checks'!F10 to be 5% rather than 95%.
This is because the CHISQ.TEST function returns the right-tailed probability of the chi-squared distribution.
 
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