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# Chi Square test

- In this section, we will learn how to interpret and use the
**Chi-square test**in SPSS.**Chi-square**test is also known as the**Pearson chi-square**test because it was given by one of the four most genius of statistics**Karl Pearson**. - The
**Chi-square test**is a**non-parametric test**for testing the significant differences between**group frequencies**. Often when we work with data, we get the**data**not always in continuous data format. Data might come in the format of**frequencies. For example**, how many**males**, how many**females**are working in an**office**. Do they significantly differ from each other, which means there are significantly more males working in a job or office as compared to females. **For example**, suppose we are a**government servant**, and we want to convey a message that in sectors that are considered**hazards**like mining and all, there**might**be more**male**workers**employed**than**female**workers. So, in that case, we might compute a**Pearson chi-square test**and convey the result that there are significantly more**male**workers in**mining**as compared to**female**workers because the job is of a**hazards nature**.- Suppose we are working in an
**IT sector**or in some other sector where an**equal**number of**males**and**females**are supposed to be employed. In that case, we might be interested in proving that there is no significant difference between the**number**of**males**and**females**working in the office. So, in that case, we can use our data and calculate the**Pearson chi-square test**to covey our result. Since the number of**males**and**females**comes in the format of**frequency**so we cannot apply any**parametric**tests like**ANOVA**or**t-test**. So the**chi-square**test can be used only when we have our data in the format of**frequencies**. **Frequencies**can be as simple as the example I gave you as the number of**males**and the number of**females**. But if we take**multiple groups**, in that case, the**frequencies**might become**complex**. But**chi-square**makes our job easy by simply calculating the result. Let us look at this data:

We have taken this data from the **SPSS folder**. There is **bank loan** data, and we are having variables like **age, education, years** with current employer, **address, income** and other such variables along with the loan default. The researcher might be interested in finding out whether **highly educated** persons default **less loan** as compared to persons who are **less educated**. So we are having **default** in the format of **frequency** whether a person defaulted or not. In our case, not default is measured as 0 and default is measured as 1.

For **education**, we are having various categories **ranging** from 1 to 5 like this:

So it could be very interesting to find out if **people** across different **educational categories** significantly differ from each other in terms of **loan default**. In our case, the **independent** variable is **educational qualification** or **educational category** and **loan default** is our **dependent** variable. The **independent variable** and **dependent** variable are both coming in the format of **frequency**. So we cannot apply any **parametric** tests like **t-test** or **ANOVA**. In this case, a suitable test will be the **Pearson chi-square test**.