Nonparametric Statistics

Definition of 'Nonparametric Statistics'


A statistical method wherein the data is not required to fit a normal distribution. Nonparametric statistics uses data that is often ordinal, meaning it does not rely on numbers, but rather a ranking or order of sorts. For example, a survey conveying consumer preferences ranging from like to dislike would be considered ordinal data.

Investopedia explains 'Nonparametric Statistics'


Nonparametric statistics have gained appreciation due to their ease of use. As the need for parameters is relieved, the data becomes more applicable to a larger variety of tests. This type of statistics can be used without the mean, sample size, standard deviation, or the estimation of any other related parameters when none of that information is available.


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