Chi-Square Test is used to see if there is an association between the categorical variables or not. We formulate two hypothesis.
Null Hypothesis: There is no significant relationship between variables.
Alternative Hypothesis: There is a significant relationship between variables.Chi-Square calculation is done using the above formula O - Observed Frequency E - Expected Frequency
Significance Levels α = 0.01, α = 0.05, α = 0.10
Chi-Square Critical value is obtained from Chi -table using Degree of freedom and Significance level α.
If Chi-Square (Calculated) > Critical value of Chi-Square at ‘α’ level of significance, where α (alpha) is either 0.01 or 0.05 or 0.1; or if p-value < level of significance ‘α’, the null hypothesis is rejected.
Furthermore, we state that the association between the variables in the crosstable (dimension P x Q) is significant, at 100*(1- α ) % confidence.In the above example the Chi Calculated value is less than the Chi Critical
Hence we accept the Null hypothesis and state that there is no significant relationship between 2 variables(Gender and credit cards owned).
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