Excel is the most widely used tool when it comes to dealing with huge datasets. We can perform myriads of tasks of multiple dimensions in Excel. In this article, I will elucidate how to find critical value in Excel by showing 2 useful methods.
How to Find Critical Value in Excel: 2 Useful Methods
This is the dataset that I am going to work with. I have assumed the Degree of Freedom (n) = 14 and Level of Significance (α) = 0.1. I will calculate the T-values and Z-values using these parameters.
1. Find T Critical Value in Excel
The T critical value is basically the indicator of determining the statistical significance of a T-test. Depending on the type of test, the calculation process varies.
1.1 Use T.INV Function for Left-Tailed Test
Here we will learn how to calculate the T critical value for a Left-Tailed Test. We need to use the T.INV function in this case.
Steps:
- Go to C8. Write down the following formula.
=T.INV(C4,C5)
- Now press ENTER. Excel will return the result.
1.2 Combine ABS and T.INV Functions for Right-Tailed Test
Now I will calculate the T critical value for a right-tailed test. This time I will use the ABS function along with the T.INV function.
Steps:
- Go to C9. Write down the following formula.
=ABS(T.INV(C4,C5))
Explanation:
Here the T.INV(C4,C5) returns the T-value for the left-tailed test and the ABS function adjusts the result for a right-tailed one.
- Now press ENTER. Excel will return the result.
1.3 Apply T.INV.2T Function for Two-Tailed Test
Now let’s focus on a two-tailed test. To calculate the T critical value for a two-tailed test, we ought to use the T.INV.2T function.
Steps:
- Go to C10. Write down the following formula
=T.INV.2T(C4,C5)
- Then press ENTER. Excel will show the result.
2. Use of NORM.S.INV Function to Find Z Critical Value in Excel
Now I will put some light on Z critical value. It is a statistical term widely used to determine the statistical significance of a hypothesis. In this case, the population parameters are of concern. We need to calculate the Z critical value for 3 different types of cases.
- Left-tailed test
- Right-tailed test
- Two-tailed test
I will discuss all the cases one by one.
2.1 For Left-Tailed Test
In this section, I will focus on the left-tailed test.
Steps:
- Go to C8 and write down the following formula
=NORM.S.INV(C4)
- Then press ENTER. Excel will return the output.
2.2 For Right-Tailed Test
In this section, I will explain how to calculate the Z critical value for a right-tailed test.
Steps:
- Go to C9 and write down the following formula
=NORM.S.INV(1-C4)
- Then press ENTER. You will get the result.
2.3 For Two-Tailed Test
Excel can also compute the Z critical value for two-tailed tests. There are two values corresponding to a two-tailed test.
Steps:
- Go to C10. Write down the following formula
=NORM.S.INV(C4/2)
- Now press ENTER to get the output.
- Similarly, write down the following formula in C11.
- After that, press ENTER to calculate the result.
Things to Remember
- The ABS function adjusts the T value for a right-tailed test.
- The T and Z critical values differ from the T and Z values. We calculate the T and Z values from the sample statistic and population parameters. Then we compare those values with the critical values to determine the statistical significance of a hypothesis.
- T values are used when the standard deviation of the population is unknown and the sample size is relatively small.
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Conclusion
In this article, I have demonstrated 2 handy methods to find critical value in Excel. I hope it helps everyone. And lastly, if you have any suggestions, ideas, or feedback please feel free to comment below.
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