Imagine you and your friends want to play a game of tag. However, instead of playing a normal game of tag, you decide to play a nonparametric game of tag. This means that there are no specific rules or parameters that need to be followed, unlike a parametric game where there are set rules that must be adhered to.
In statistics, a parametric method assumes that the data comes from a specific distribution or follows a specific pattern. However, in nonparametric statistics, there are no assumptions made about the distribution of the data. Instead, nonparametric methods rely on ranking or ordering the data and use this information to make conclusions.
For example, let's say you and your friends are playing a nonparametric game of tag where the person who tags the most people wins. You keep track of how many times each person tags someone and then rank the players from the one who tagged the most to the one who tagged the least. You can use this ranking information to determine the winner without assuming anything about the distribution of the data.
Nonparametric methods are useful when the assumptions of parametric methods are not met or when there is little information about the underlying distribution of the data. They can be used in a variety of situations, such as in social sciences, biology, and economics.
In summary, nonparametric statistics are like playing a game of tag without any set rules or parameters. Instead, the data is ranked or ordered to make conclusions without assuming anything about the distribution of the data.