Normality Test

In time series and econometric modeling, we often encounter the normality test as part of the residuals diagnosis to validate a model's assumption(s).

NumXL provides an intuitive interface to help Excel users conduct a normality test using several methods. In this tutorial, we’ll demonstrate the steps to construct a normality test of the hypothesis using NumXL functions in Excel.

Process

1. Select an empty cell to store the Normality test output table
   
2. Locate the Statistical Test (STAT TEST) icon in the toolbar (or menu in Excel 2003) and click on the down-arrow. When the drop-down menu appears, select the “Normality Test”.
   
3. The Normality Test dialog box appears.
4. Select the cell range for the input data.
   
5. Selecting the input data cell range will enable the “Options” and “Missing Values” tabs. Click the “Options” Tab.
6. Select the Normality tests to include in the output table.
   
   Note: Initially, all tests are selected as shown above.
7. If your data include one or more intermediate observations with missing values, click the “Missing Values” tab.
8. Initially, missing values are dropped from the sample data. If you wish to change this behavior/treatment, select an alternative method.
   
9. Now, Click “OK” to generate the output table.

Output

The normality test wizard generates the output table as shown below: