Z Critical Value in Excel

After performing a z-test, the next step is deciding whether to reject the null hypothesis. This decision is based on the z critical value. If the absolute value of your z-test statistic exceeds the z critical value, you reject the null hypothesis. Otherwise, you fail to reject the null hypothesis. While you can find the z critical value using a standard normal table or an online z-critical calculator, Excel offers a quick and easy way to get it. In this article, we’ll guide you on how to find the z critical value using Excel.

How to Find Z Critical Value in Excel

Finding the z critical value in Excel is actually pretty easy with the NORM.S.INV() function. You only need to know the significance level (α) and the type of test (two-tailed, left-tailed, or right-tailed) you’re performing. In this section, we’ll show you how to get the z-critical value in Excel for each type of test.

1. Right-Tailed Test (>)

Suppose you’re performing a right-sided test. To find the z-critical value for your test in Excel, follow these steps:

1. Identify your significance level (α)
2. Enter the formula: =NORM.S.INV(1 - α) in the cell where you want the critical value to appear
3. Press Enter to get the critical value.

Example 1: Find the right-tailed Z critical value for α = 0.05.

To find this right-tailed critical value, we simply type the formula =NORM.S.INV(1 - 0.05) in excel cell. Once you click enter, we get the right-sided z critical value as 1.645 (See Figure 1).

2. Left-Tailed Test (<)

Suppose now you’re conducting a left-tailed z test. You can easily find the left-sided z-critical value using Excel using these simple steps:

1. Identify your significance level (α).
2. Enter the formula: =NORM.S.INV(α) in a cell where you want the critical value to appear.
3. Press Enter to get the critical value.

Example 2: Find the left-tailed Z critical value for α = 0.10

To find the left-sided z-critical value for α = 0.10, simply type the formula =NORM.S.INV(0.10) in a cell where you want the critical value to appear and click Enter. The resulting left-tailed critical value will be -1.2816 (See Figure 2).

3. Two-Tailed Test (≠)

If you’re performing a two-sided z-test, you can easily find the correct z-critical value using Excel by following these simple steps:

1. Identify the significance level (α)
2. Enter the formula: =NORM.S.INV(1 - α/2)
3. Press Enter to get the Z critical value.

Example 3: Find the two-tailed Z critical value for 95% confidence level.

If we want to be 95% confidence, then the significance level, α = 1-.95 =0.05

Thus, to compute the two-sided critical value using Excel, type the formula =NORM.S.INV(1 - 0.05/2) and hit the Enter key. The results will be 1.96 (See Figure 3).

Want to learn how to find z-critical value manually? Check out our comprehensive guide on how to find Z critical value from Z tables.

Common Mistakes to Avoid

When calculating Z critical values in Excel, beginners often make simple mistakes. Avoid these to get accurate results:

• Confusing confidence level with alpha (α): Remember that α = 1 – confidence level. Using the confidence level directly in the formula will give incorrect values.
• Forgetting α/2 in two-tailed tests: In a two-tailed test, you must divide alpha by 2 before using it in the formula.
• Mixing up left-tail and right-tail tests: Using the wrong formula for the test direction will reverse the sign of your Z critical value.
• Using the wrong function: Use NORM.S.INV() for standard Z critical values. Avoid using NORM.INV(), which is for custom distributions.
• Entering percentages instead of decimals: Excel formulas require probabilities in decimal form. For example, enter 0.05 instead of 5%.