Bsafc4 PPT Ch10 (Anova) - Compressed

Business Statistics, A First Course
4th Edition
Chapter 10
Two-Sample Tests and

One-Way ANOVA
Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 10-1
Learning Objectives
In this chapter, you learn hypothesis testing
procedures to test:
 The means of two independent populations
 The means of two related populations
 The proportions of two independent populations
 The variances of two independent populations
 The means of more than two populations
Chapter Overview
One-Way Analysis
Two-Sample Tests
of Variance (ANOVA)
Population Means,
Independent Samples F-test
Means,
Related Samples
Tukey-Kramer
Population test
Proportions
Population
Variances
Two-Sample Tests
Two-Sample Tests
Population
Means, Means, Population Population
Independent Related Proportions Variances
Samples Samples
Examples:
Mean 1 vs. Same population Proportion 1 vs. Variance 1 vs.
independent before vs. after Proportion 2 Variance 2
Mean 2 treatment
Difference Between Two Means
Population means, Goal: Test hypothesis or form

independent
samples
* a confidence interval for the
difference between two
population means, μ1 – μ2
σ1 and σ2 known
The point estimate for the

σ1 and σ2 unknown, difference is
assumed equal
X1 – X2
σ1 and σ2 unknown,
not assumed equal
Independent Samples
 Different data sources

Population means,
 Unrelated
independent
samples
*  Independent
 Sample selected from one
population has no effect on the
sample selected from the other
σ1 and σ2 known population
 Use the difference between 2
σ1 and σ2 unknown, sample means
assumed equal  Use Z test, a pooled-variance t
test, or a separate-variance t
σ1 and σ2 unknown, test
not assumed equal
Difference Between Two Means
Population means,
independent
samples
*
σ1 and σ2 known Use a Z test statistic
Use Sp to estimate unknown

σ1 and σ2 unknown, σ , use a t test statistic and
assumed equal pooled standard deviation
σ1 and σ2 unknown, Use S1 and S2 to estimate

not assumed equal unknown σ1 and σ2, use a
separate-variance t test
σ1 and σ2 Known
Population means, Assumptions:

independent
samples  Samples are randomly and
independently drawn
σ1 and σ2 known *  Population distributions are
normal or both sample sizes
σ1 and σ2 unknown, are  30
assumed equal
 Population standard
σ1 and σ2 unknown, deviations are known
not assumed equal
σ1 and σ2 Known
(continued)
Population means, When σ1 and σ2 are known and

both populations are normal or
independent
both sample sizes are at least 30,
samples
the test statistic is a Z-value…
σ1 and σ2 known * …and the standard error of

X1 – X2 is
assumed equal 2 2
σ σ2
σ X1  X2  1

σ1 and σ2 unknown, n1 n2
not assumed equal
σ1 and σ2 Known
(continued)
Population means,
independent The test statistic for
samples μ1 – μ2 is:
σ1 and σ2 known * Z
 X1 
 X2   μ1  μ2 
2 2
σ1 and σ2 unknown, σ σ2
assumed equal
1

n1 n2
not assumed equal
Hypothesis Tests for
Two Population Means
Two Population Means, Independent Samples
Lower-tail test: Upper-tail test: Two-tail test:
H0: μ1  μ2 H0: μ1 ≤ μ2 H0: μ1 = μ2

H1: μ1 < μ2 H1: μ1 > μ2 H1: μ1 ≠ μ2
i.e., i.e., i.e.,
H0: μ1 – μ2  0 H0: μ1 – μ2 ≤ 0 H0: μ1 – μ2 = 0
H1: μ1 – μ2 < 0 H1: μ1 – μ2 > 0 H1: μ1 – μ2 ≠ 0
Hypothesis tests for μ1 – μ2
Two Population Means, Independent Samples
H0: μ1 – μ2  0 H0: μ1 – μ2 ≤ 0 H0: μ1 – μ2 = 0
H1: μ1 – μ2 < 0 H1: μ1 – μ2 > 0 H1: μ1 – μ2 ≠ 0
a a a/2 a/2
-za za -za/2 za/2

Reject H0 if Z < -Za Reject H0 if Z > Za Reject H0 if Z < -Za/2
or Z > Za/2
Confidence Interval,
σ1 and σ2 Known
Population means,
independent The confidence interval for
σ1 and σ2 known *
 
2 2
σ σ2
X1  X 2  Z 1

σ1 and σ2 unknown, n1 n2
assumed equal
not assumed equal
σ1 and σ2 Unknown,
Assumed Equal

independent
 Samples are randomly and
samples
independently drawn
σ1 and σ2 known  Populations are normally

distributed or both sample
assumed equal
* sizes are at least 30
 Population variances are

unknown but assumed equal
not assumed equal
Assumed Equal
(continued)
Population means, Forming interval

independent estimates:
samples
 The population variances
are assumed equal, so use
σ1 and σ2 known the two sample variances
and pool them to
assumed equal
* estimate the common σ2
 the test statistic is a t value

σ1 and σ2 unknown, with (n1 + n2 – 2) degrees
not assumed equal of freedom
Assumed Equal
(continued)
Population means,
independent
samples
The pooled variance is
σ1 and σ2 known
n1  1S
2
 n2  1S 2
2
assumed equal
* S 2
p  1
(n1  1)  (n2  1)
not assumed equal
Assumed Equal
(continued)
The test statistic for

Population means,
independent μ1 – μ2 is:
 X  X   μ  μ 
samples
t
1 2 1 2
σ1 and σ2 known
1 1 
S   
2
assumed equal
* p
 n1 n2 
Where t has (n1 + n2 – 2) d.f.,
and
σ1 and σ2 unknown, n1  1S1  n2  1S2
2 2
not assumed equal S 2


(n1  1)  (n2  1)
p
Confidence Interval,
σ1 and σ2 Unknown
Population means,
The confidence interval for
independent
σ1 and σ2 known
X  X   t
1 2 n1 n2 -2
1 1 
S   
2
p
 n1 n2 
assumed equal
*
Where
σ1 and σ2 unknown, n
S2  1
 1 S1
2
 n 2  1 S 2
2
(n1  1)  (n2  1)
p
not assumed equal
Pooled-Variance t Test: Example
You are a financial analyst for a brokerage firm. Is there a
difference in dividend yield between stocks listed on the
NYSE & NASDAQ? You collect the following data:
NYSE NASDAQ
Number 21 25
Sample mean 3.27 2.53
Sample std dev 1.30 1.16
Assuming both populations are

approximately normal with
equal variances, is
there a difference in average
yield (a = 0.05)?
Calculating the Test Statistic
The test statistic is:
t
X  X   μ  μ 
1

2 1 2 3.27  2.53   0  2.040
1 1  1 1 
S   
2
1.5021  
 21 25 
p
 n1 n2 
n
S2  1
 1S1
2
 n 2  1S 2
2

21  11.30 2
 25  11.16 2
 1.5021
(n1  1)  (n2  1) (21 - 1)  (25  1)
p
Solution
Reject H0 Reject H0
H0: μ1 - μ2 = 0 i.e. (μ1 = μ2)
H1: μ1 - μ2 ≠ 0 i.e. (μ1 ≠ μ2)
a = 0.05 .025 .025
df = 21 + 25 - 2 = 44 -2.0154 0 2.0154 t
Critical Values: t = ± 2.0154
2.040
Test Statistic: Decision:
3.27  2.53
t  2.040 Reject H0 at a = 0.05
 1 1 
1.5021    Conclusion:
 21 25  There is evidence of a
difference in means.
Not Assumed Equal

independent
 Samples are randomly and
samples
independently drawn
σ1 and σ2 known  Populations are normally

distributed or both sample
sizes are at least 30
assumed equal  Population variances are
unknown but cannot be
not assumed equal
* assumed to be equal
Not Assumed Equal
(continued)
Population means,
independent Forming the test statistic:
samples
 The population variances
are not assumed equal, so
σ1 and σ2 known include the two sample
variances in the computation
σ1 and σ2 unknown, of the t-test statistic
assumed equal
 the test statistic is a t value
not assumed equal
* (statistical software is generally
used to do the necessary
computations)
Not Assumed Equal
(continued)
Population means,
independent The test statistic for
samples
μ1 – μ2 is:
 X  X   μ  μ 
σ1 and σ2 known
t
1 2 1 2
σ1 and σ2 unknown, 2 2
S S
assumed equal 
1 2
n1 n2
not assumed equal
*
Related Populations
Tests Means of 2 Related Populations
Related  Paired or matched samples
samples  Repeated measures (before/after)
 Use difference between paired values:
Di = X1i - X2i
 Eliminates Variation Among Subjects
 Assumptions:
 Both Populations Are Normally Distributed
 Or, if not Normal, use large samples
Mean Difference, σD Known
The ith paired difference is Di , where
Related Di = X1i - X2i
samples
n
The point estimate for
the population mean
D i
D i1
paired difference is D : n
Suppose the population
standard deviation of the
difference scores, σD, is known
n is the number of pairs in the paired sample
Mean Difference, σD Known
(continued)
The test statistic for the mean
Paired difference is a Z value:
samples
D  μD
Z
σD
n
Where
μD = hypothesized mean difference
σD = population standard dev. of differences
n = the sample size (number of pairs)
Confidence Interval, σD Known
Paired The confidence interval for μD is

samples
σD
DZ
n
Where
n = the sample size
(number of pairs in the paired sample)
Mean Difference, σD Unknown
If σD is unknown, we can estimate the
Related unknown population standard deviation
samples with a sample standard deviation:
n
The sample standard
deviation is  i
(D  D ) 2
SD  i 1
n 1
(continued)
 Use a paired t test, the test statistic for

Paired D is now a t statistic, with n-1 d.f.:
samples
D  μD
t
SD
n
n
Where t has n - 1 d.f.  i
(D  D ) 2
and SD is: SD  i1

n 1
Confidence Interval, σD Unknown
Paired The confidence interval for μD is

samples
SD
D  t n1
n
n
 (D  D)
i
2
where SD  i1
n 1
Hypothesis Testing for
Paired Samples
H0: μD  0 H0: μD ≤ 0 H0: μD = 0

H1: μD < 0 H1: μD > 0 H1: μD ≠ 0
a a a/2 a/2
-ta ta -ta/2 ta/2

Reject H0 if t < -ta Reject H0 if t > ta Reject H0 if t < -ta/2
or t > ta/2
Where t has n - 1 d.f.
Paired t Test Example
 Assume you send your salespeople to a “customer
service” training workshop. Has the training made a
difference in the number of complaints? You collect
the following data:
Number of Complaints: (2) - (1)  Di
Salesperson Before (1) After (2) Difference, Di D = n
C.B. 6 4 - 2 = -4.2
T.F. 20 6 -14
M.H. 3 2 - 1
R.K. 0 0 0
SD 
 i
(D  D ) 2
M.O. 4 0 - 4
n 1
-21
 5.67
Paired t Test: Solution
 Has the training made a difference in the number of
complaints (at the 0.01 level)?
Reject Reject
H0: μD = 0
H1: μD  0
a/2 a/2
a = .01 D = - 4.2 - 4.604 4.604

- 1.66
Critical Value = ± 4.604
d.f. = n - 1 = 4
Decision: Do not reject H0
(t stat is not in the reject region)
Test Statistic:
Conclusion: There is not a
D  μD  4.2  0
t   1.66 significant change in the
SD / n 5.67/ 5 number of complaints.
Two Population Proportions
Goal: test a hypothesis or form a
Population confidence interval for the difference
proportions between two population proportions,
π1 – π2
Assumptions:
n1 π1  5 , n1(1- π1)  5
n2 π2  5 , n2(1- π2)  5
The point estimate for

the difference is
p1  p 2
Since we begin by assuming the null
hypothesis is true, we assume π1 = π2
Population
and pool the two sample estimates
proportions
The pooled estimate for the
overall proportion is:
X1  X 2
p
n1  n2
where X1 and X2 are the numbers from
samples 1 and 2 with the characteristic of
interest
(continued)
The test statistic for

Population p1 – p2 is a Z statistic:
proportions
Z
 p1  p2    π1  π2 
1 1
p (1 p)   
 n1 n2 
X1  X 2 X X
where p , p1  1 , p 2  2
n1  n2 n1 n2
Confidence Interval for
Population The confidence interval for

proportions
π1 – π2 is:
p1(1 p1 ) p2 (1 p2 )
 p1  p2  Z 
n1 n2
Population proportions
H0: π1  π2 H0: π1 ≤ π2 H0: π1 = π2

H1: π1 < π2 H1: π1 > π2 H1: π1 ≠ π2
i.e., i.e., i.e.,
H0: π1 – π2  0 H0: π1 – π2 ≤ 0 H0: π1 – π2 = 0
H1: π1 – π2 < 0 H1: π1 – π2 > 0 H1: π1 – π2 ≠ 0
(continued)
Population proportions
H0: π1 – π2  0 H0: π1 – π2 ≤ 0 H0: π1 – π2 = 0
H1: π1 – π2 < 0 H1: π1 – π2 > 0 H1: π1 – π2 ≠ 0
a a a/2 a/2
-za za -za/2 za/2

Reject H0 if Z < -Za Reject H0 if Z > Za Reject H0 if Z < -Za/2
or Z > Za/2
Example:
Two population Proportions
Is there a significant difference between the
proportion of men and the proportion of
women who will vote Yes on Proposition A?
 In a random sample, 36 of 72 men and 31 of

50 women indicated they would vote Yes
 Test at the .05 level of significance
Example:
(continued)
 The hypothesis test is:

H0: π1 – π2 = 0 (the two proportions are equal)
H1: π1 – π2 ≠ 0 (there is a significant difference between proportions)
 The sample proportions are:

 Men: p1 = 36/72 = .50
 Women: p2 = 31/50 = .62
 The pooled estimate for the overall proportion is:

X1  X 2 36  31 67
p    .549
n1  n2 72  50 122
Example:
(continued)
Reject H0 Reject H0
The test statistic for π1 – π2 is:
.025 .025
z
 p1  p2     1   2 
1 1
p (1  p)    -1.96 1.96
 n1 n2  -1.31

 .50  .62    0   1.31
 1 1  Decision: Do not reject H0
.549 (1  .549)   
 72 50 
Conclusion: There is not
significant evidence of a
Critical Values = ±1.96
For a = .05 difference in proportions
who will vote yes between
men and women.
Two-Sample Tests
Two-Sample Tests
Population
Means, Means, Population Population
Independent Related Proportions Variances
Samples Samples
Examples:
Mean 1 vs. Same population Proportion 1 vs. Variance 1 vs.
independent before vs. after Proportion 2 Variance 2
Mean 2 treatment
Hypothesis Tests for Variances
Tests for Two

Population
*
H0: σ12 = σ22
Variances Two-tail test
H1: σ12 ≠ σ22
H0: σ12  σ22 Lower-tail test

F test statistic
H1: σ12 < σ22
H0: σ12 ≤ σ22 Upper-tail test

H1: σ12 > σ22
Hypothesis Tests for Variances
(continued)
Tests for Two

The F test statistic is:
Population
Variances 2
S
F 1
F test statistic * S 2
2
S12 = Variance of Sample 1

n1 - 1 = numerator degrees of freedom
S22 = Variance of Sample 2

n2 - 1 = denominator degrees of freedom
The F Distribution
 The F critical value is found from the F table

 There are two appropriate degrees of freedom:
numerator and denominator
S12
F 2 where df1 = n1 – 1 ; df2 = n2 – 1
S2
 In the F table,
 numerator degrees of freedom determine the column
 denominator degrees of freedom determine the row
Finding the Rejection Region
H0: σ12  σ22
H0: σ12 = σ22
a H1: σ12 < σ22
H1: σ12 ≠ σ22
a/2
0 F a/2
Reject Do not
H0 FL reject H0
Reject H0 if F < FL 0 F
Reject Do not Reject H0
H0 FL reject H0 FU
H0: σ12 ≤ σ22
H1: σ12 > σ22  rejection
S12
F  2  FU
a region for a S2
two-tail test is:
0 S12
F  2  FL
Do not Reject H0 F S2
reject H0 FU
Reject H0 if F > FU
Finding the Rejection Region
(continued)
H0: σ12 = σ22
a/2 H1: σ12 ≠ σ22
a/2
0 F
Reject Do not Reject H0
H0 FL reject H0 FU
To find the critical F values:
1
1. Find FU from the F table 2. Find FL using the formula: FL 
FU*
for n1 – 1 numerator and
n2 – 1 denominator Where FU* is from the F table
degrees of freedom with n2 – 1 numerator and n1 – 1
denominator degrees of freedom
(i.e., switch the d.f. from FU)
F Test: An Example
You are a financial analyst for a brokerage firm. You

want to compare dividend yields between stocks listed
on the NYSE & NASDAQ. You collect the following data :
NYSE NASDAQ
Number 21 25
Mean 3.27 2.53
Std dev 1.30 1.16
Is there a difference in the

variances between the NYSE
& NASDAQ at the a = 0.05 level?
F Test: Example Solution
 Form the hypothesis test:
H0: σ21 – σ22 = 0 (there is no difference between variances)
H1: σ21 – σ22 ≠ 0 (there is a difference between variances)
 Find the F critical values for a = 0.05:

FU: FL:
 Numerator:  Numerator:
 n1 – 1 = 21 – 1 = 20 d.f.  n2 – 1 = 25 – 1 = 24 d.f.
 Denominator:  Denominator:
 n2 – 1 = 25 – 1 = 24 d.f.  n1 – 1 = 21 – 1 = 20 d.f.
FU = F.025, 20, 24 = 2.33 FL = 1/F.025, 24, 20 = 1/2.41

= 0.415
F Test: Example Solution
(continued)
 The test statistic is: H0: σ12 = σ22

H1: σ12 ≠ σ22
S12 1.302
F 2  2
 1.256
S2 1.16
a/2 = .025 a/2 = .025
0 F
Reject H0 Do not Reject H0
reject H0
 F = 1.256 is not in the rejection FL=0.43
FU=2.33
region, so we do not reject H0
 Conclusion: There is not sufficient evidence

of a difference in variances at a = .05
Exercise
2. research on the desire to study from ICT

students
Sample mean Sample st. Sample size
deviation
Male 40.26 13.35 100
Female 36.85 9.42 72
a. Are there different learning desire variances

from male and female (a = 0.01)?
Two-Sample Tests in EXCEL
For independent samples:
 Independent sample Z test with variances known:
 Tools | data analysis | z-test: two sample for means
 Pooled variance t test:
 Tools | data analysis | t-test: two sample assuming equal variances
 Separate-variance t test:
 Tools | data analysis | t-test: two sample assuming unequal variances
For paired samples (t test):

 Tools | data analysis | t-test: paired two sample for means
For variances:
 F test for two variances:
 Tools | data analysis | F-test: two sample for variances
One-Way Analysis of Variance
One-Way Analysis of Variance (ANOVA)
F-test Tukey-Kramer
test
General ANOVA Setting
 Investigator controls one or more independent
variables
 Called factors (or treatment variables)
 Each factor contains two or more levels (or groups or
categories/classifications)
 Observe effects on the dependent variable
 Response to levels of independent variable
 Experimental design: the plan used to collect
the data
One-Way Analysis of Variance
 Evaluate the difference among the means of three

or more groups
Examples: Accident rates for 1st, 2nd, and 3rd shift
Expected mileage for five brands of tires
 Assumptions
 Populations are normally distributed
 Populations have equal variances
 Samples are randomly and independently drawn
Hypotheses of One-Way ANOVA
 H0 : μ1  μ2  μ3    μc
 All population means are equal
 i.e., no treatment effect (no variation in means among
groups)
 H1 : Not all of the population means are the same

 At least one population mean is different
 i.e., there is a treatment effect
 Does not mean that all population means are different
(some pairs may be the same)
One-Way ANOVA
H0 : μ1  μ2  μ3    μc
H1 : Not all μ j are the same
All Means are the same:

The Null Hypothesis is True
(No Treatment Effect)
μ1  μ2  μ3
One-Way ANOVA
(continued)
H0 : μ1  μ2  μ3    μc
H1 : Not all μ j are the same
At least one mean is different:
The Null Hypothesis is NOT true
(Treatment Effect is present)
or
μ1  μ2  μ3 μ1  μ2  μ3
Partitioning the Variation
 Total variation can be split into two parts:
SST = SSA + SSW
SST = Total Sum of Squares

(Total variation)
SSA = Sum of Squares Among Groups
(Among-group variation)
SSW = Sum of Squares Within Groups
(Within-group variation)
Partitioning the Variation
(continued)
SST = SSA + SSW
Total Variation = the aggregate dispersion of the individual

data values across the various factor levels (SST)
Among-Group Variation = dispersion between the factor

sample means (SSA)
Within-Group Variation = dispersion that exists among

the data values within a particular factor level (SSW)
Partition of Total Variation
Total Variation (SST)

d.f. = n – 1
Variation Due to Variation Due to Random

= Factor (SSA) + Sampling (SSW)
d.f. = c – 1 d.f. = n – c
Commonly referred to as: Commonly referred to as:

 Sum of Squares Between  Sum of Squares Within
 Sum of Squares Among  Sum of Squares Error
 Sum of Squares Explained  Sum of Squares Unexplained
 Among Groups Variation  Within-Group Variation
Total Sum of Squares
SST = SSA + SSW
c nj
SST   ( Xij  X) 2
j1 i1
Where:
SST = Total sum of squares
c = number of groups (levels or treatments)
nj = number of observations in group j
Xij = ith observation from group j
X = grand mean (mean of all data values)
Total Variation
(continued)
SST  ( X11  X)  ( X12  X)  ...  ( Xcnc  X) 2 2 2
Response, X
Group 1 Group 2 Group 3
Among-Group Variation
SST = SSA + SSW
c
SSA   n j ( X j  X) 2
j1
Where:
SSA = Sum of squares among groups
c = number of groups
nj = sample size from group j
Xj = sample mean from group j
X = grand mean (mean of all data values)
(continued)
c
SSA   n j ( X j  X) 2
j1
SSA
Variation Due to
MSA 
Differences Among Groups
c 1
Mean Square Among =
SSA/degrees of freedom
i j
(continued)
SSA  n1 ( x1  x )  n2 ( x 2  x )  ...  nc ( x c  x )
2 2 2
Response, X
X3
X2 X
X1

Within-Group Variation
SST = SSA + SSW
c nj
SSW    ( Xij  X j ) 2
j1 i1
Where:
SSW = Sum of squares within groups
nj = sample size from group j
Xj = sample mean from group j
Xij = ith observation in group j
(continued)
c nj
SSW    ( Xij  X j ) 2
j1 i1
SSW
Summing the variation
MSW 
within each group and then
adding over all groups nc
Mean Square Within =
SSW/degrees of freedom
μj
(continued)
SSW  ( x11  X1 )  ( X12  X2 )  ...  ( Xcnc  Xc ) 2 2 2
Response, X
X3
X2
X1

Obtaining the Mean Squares
SSA
MSA 
c 1
SSW
MSW 
nc
SST
MST 
n 1
One-Way ANOVA Table
Source of SS df MS F ratio
Variation (Variance)
Among SSA MSA
SSA c-1 MSA = F=
Groups c-1 MSW
Within SSW
SSW n-c MSW =
Groups n-c
Total SST = n-1

SSA+SSW
n = sum of the sample sizes from all groups
df = degrees of freedom
One-Way ANOVA
F Test Statistic
H0: μ1= μ2 = … = μc
H1: At least two population means are different
 Test statistic MSA

F
MSW
MSA is mean squares among groups
MSW is mean squares within groups
 Degrees of freedom
 df1 = c – 1 (c = number of groups)
 df2 = n – c (n = sum of sample sizes from all populations)
Interpreting One-Way ANOVA
F Statistic
 The F statistic is the ratio of the among
estimate of variance and the within estimate
of variance
 The ratio must always be positive
 df1 = c -1 will typically be small
 df2 = n - c will typically be large
Decision Rule:
 Reject H0 if F > FU, a = .05
otherwise do not
reject H0 0 Do not Reject H0
reject H0
FU
One-Way ANOVA
F Test Example
You want to see if three Club 1 Club 2 Club 3

different golf clubs yield 254 234 200
different distances. You 263 218 222
randomly select five 241 235 197
measurements from trials on 237 227 206
an automated driving 251 216 204
machine for each club. At the
0.05 significance level, is
there a difference in mean
distance?
One-Way ANOVA Example:
Scatter Diagram
Distance
Club 1 Club 2 Club 3 270
254 234 200 260 •
•
263 218 222 250 • X1
241 235 197 240 •
237 227 206 • ••
251 216 204 230
• X
220 ••
X2 •
210
x1  249.2 x 2  226.0 x 3  205.8
•• X3
200 ••
x  227.0 190
1 2 3
Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Club Chap 10-78
One-Way ANOVA Example
Computations
Club 1 Club 2 Club 3 X1 = 249.2 n1 = 5
254 234 200 X2 = 226.0 n2 = 5
263 218 222
X3 = 205.8 n3 = 5
241 235 197
237 227 206 n = 15
X = 227.0
251 216 204 c=3
SSA = 5 (249.2 – 227)2 + 5 (226 – 227)2 + 5 (205.8 – 227)2 = 4716.4
SSW = (254 – 249.2)2 + (263 – 249.2)2 +…+ (204 – 205.8)2 = 1119.6
MSA = 4716.4 / (3-1) = 2358.2 2358.2

F  25.275
MSW = 1119.6 / (15-3) = 93.3 93.3
One-Way ANOVA Example
Solution
H0: μ1 = μ2 = μ3 Test Statistic:
H1: μj not all equal
MSA 2358.2
a = 0.05 F   25.275
df1= 2 df2 = 12 MSW 93.3
Critical Decision:
Value:
Reject H0 at a = 0.05
FU = 3.89
a = .05 Conclusion:
There is evidence that
0 Do not Reject H0 at least one μj differs
reject H0 F = 25.275
FU = 3.89 from the rest
One-Way ANOVA
Excel Output
EXCEL: tools | data analysis | ANOVA: single factor
SUMMARY
Groups Count Sum Average Variance
Club 1 5 1246 249.2 108.2
Club 2 5 1130 226 77.5
Club 3 5 1029 205.8 94.2
ANOVA
Source of
SS df MS F P-value F crit
Variation
Between
4716.4 2 2358.2 25.275 4.99E-05 3.89
Groups
Within
1119.6 12 93.3
Groups
Total 5836.0 14
The Tukey-Kramer Procedure
 Tells which population means are significantly

different
 e.g.: μ1 = μ2  μ3
 Done after rejection of equal means in ANOVA
 Allows pair-wise comparisons
 Compare absolute mean differences with critical
range
μ1= μ2 μ3 x
Tukey-Kramer Critical Range
MSW  1 1 
Critical Range  QU 
2  n j n j' 
where:
QU = Value from Studentized Range Distribution
with c and n - c degrees of freedom for
the desired level of a (see appendix E.8 table)
MSW = Mean Square Within
nj and nj’ = Sample sizes from groups j and j’
The Tukey-Kramer Procedure:
Example
1. Compute absolute mean
Club 1 Club 2 Club 3 differences:
254 234 200
263 218 222 x1  x 2  249.2  226.0  23.2
241 235 197 x1  x 3  249.2  205.8  43.4
237 227 206
251 216 204 x 2  x 3  226.0  205.8  20.2
2. Find the QU value from the table in appendix E.8 with

c = 3 and (n – c) = (15 – 3) = 12 degrees of freedom
for the desired level of a (a = 0.05 used here):
QU  3.77
The Tukey-Kramer Procedure:
Example
(continued)
3. Compute Critical Range:
MSW  1 1  93.3  1 1 
Critical Range  QU   3.77     16.285
 
2  n j n j'  2 5 5
4. Compare:
5. All of the absolute mean differences
x1  x 2  23.2
are greater than critical range.
Therefore there is a significant x1  x 3  43.4
difference between each pair of
means at 5% level of significance. x 2  x 3  20.2
Thus, with 95% confidence we can conclude
that the mean distance for club 1 is greater
than club 2 and 3, and club 2 is greater than
club 3.
Chapter Summary
 Compared two independent samples
 Performed Z test for the difference in two means
 Performed pooled variance t test for the difference in two
means
 Performed separate-variance t test for difference in two means
 Formed confidence intervals for the difference between two
means
 Compared two related samples (paired
samples)
 Performed paired sample Z and t tests for the mean difference
 Formed confidence intervals for the mean difference
Chapter Summary
(continued)
 Compared two population proportions
 Formed confidence intervals for the difference between two population
proportions
 Performed Z-test for two population proportions
 Performed F tests for the difference between two
population variances
 Used the F table to find F critical values
 Described one-way analysis of variance
 The logic of ANOVA
 ANOVA assumptions
 F test for difference in c means
 The Tukey-Kramer procedure for multiple comparisons

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Business Statistics, A First Course

Two-Sample Tests and

Population means, Goal: Test hypothesis or form

The point estimate for the

 Different data sources

Use Sp to estimate unknown

σ1 and σ2 unknown, Use S1 and S2 to estimate

Population means, Assumptions:

Population means, When σ1 and σ2 are known and

σ1 and σ2 known * …and the standard error of

Lower-tail test: Upper-tail test: Two-tail test:

H0: μ1  μ2 H0: μ1 ≤ μ2 H0: μ1 = μ2

-za za -za/2 za/2

Population means, Assumptions:

σ1 and σ2 known  Populations are normally

 Population variances are

Population means, Forming interval

 the test statistic is a t value

The test statistic for

not assumed equal S 2

Assuming both populations are

Population means, Assumptions:

σ1 and σ2 known  Populations are normally

Paired The confidence interval for μD is

 Use a paired t test, the test statistic for

and SD is: SD  i1

Paired The confidence interval for μD is

Lower-tail test: Upper-tail test: Two-tail test:

H0: μD  0 H0: μD ≤ 0 H0: μD = 0

-ta ta -ta/2 ta/2

a = .01 D = - 4.2 - 4.604 4.604

The point estimate for

The test statistic for

Population The confidence interval for

Lower-tail test: Upper-tail test: Two-tail test:

H0: π1  π2 H0: π1 ≤ π2 H0: π1 = π2

-za za -za/2 za/2

 In a random sample, 36 of 72 men and 31 of

 Test at the .05 level of significance

 The hypothesis test is:

 The sample proportions are:

 The pooled estimate for the overall proportion is:

Tests for Two

H0: σ12  σ22 Lower-tail test

H0: σ12 ≤ σ22 Upper-tail test

Tests for Two

S12 = Variance of Sample 1

S22 = Variance of Sample 2

 The F critical value is found from the F table

You are a financial analyst for a brokerage firm. You

Is there a difference in the

 Find the F critical values for a = 0.05:

FU = F.025, 20, 24 = 2.33 FL = 1/F.025, 24, 20 = 1/2.41

 The test statistic is: H0: σ12 = σ22

 Conclusion: There is not sufficient evidence

2. research on the desire to study from ICT

a. Are there different learning desire variances

For paired samples (t test):

One-Way Analysis of Variance (ANOVA)