Who gives Direction to Statistical Testing? Best Practice meets Mathematically Correct Tests
Karl Schlag ()
Vienna Economics Papers from University of Vienna, Department of Economics
We are interested in statistical tests that are able to uncover that one method is better than another one. The Wilcoxon-Mann-Whitney rank-sum and the Wilcoxon sign-rank test are the most popular tests for showing that two methods are di¤erent. Yet all of the 32 papers in Economics we surveyed misused them to claim evidence that one method is better, without making any additional assumptions. We present eight nonparametric tests that can correctly identify which method is better in terms of a stochastic inequality, median di¤erence and di¤erence in medians or means, without adding any as- sumptions. We show that they perform very well in the data sets from the surveyed papers. The two tests for comparing medians are novel, constructed in the spirit of Mood?s test.
JEL-codes: C12 C14 C90 (search for similar items in EconPapers)
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