The Stochastic Inequality Test - a Test for a Directional Treatment Effect

23 Pages Posted: 27 Apr 2022

See all articles by Karl H. Schlag

Karl H. Schlag

University of Vienna - Department of Economics

James Tremewan

Date Written: April 13, 2022

Abstract

The stochastic inequality test is an exact non-parametric test that can be used to infer whether values in one random sample tend to be higher than in another. In addition it can be used to derive a confidence interval around an intuitive measure of effect size that is readily interpretable for
both ordinal and cardinal data, and allows for \textit{ex-ante} power analysis. Unlike other commonly used tests, such as the t-test and the Wilcoxon-Mann-Whitney test, this inference is valid without requiring additional, often unrealistic and untestable, assumptions about the shape of the underlying population distributions.

Keywords: Exact test, distribution free test, stochastic difference

JEL Classification: C12, C14, C90

Suggested Citation

Schlag, Karl H. and Tremewan, James, The Stochastic Inequality Test - a Test for a Directional Treatment Effect (April 13, 2022). Available at SSRN: https://ssrn.com/abstract=4082855 or http://dx.doi.org/10.2139/ssrn.4082855

Karl H. Schlag

University of Vienna - Department of Economics ( email )

Oskar-Morgenstern-Platz 1
Vienna, A-1090
Austria

No contact information is available for James Tremewan

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