Definition
The basic equation underlying permutation tests is
where:
-
- x is the outcome actually observed,
- Pr(y) is the probability under the null hypothesis of a potentially observed outcome y,
- T(y) is the value of the test statistic for an outcome y, with larger values of T representing cases which notionally represent greater departures from the null hypothesis,
and where the sum ranges over all outcomes y (including the observed one) that have the same value of the test statistic obtained for the observed sample x, or a larger one .
Read more about this topic: Exact Test
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