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Analysis of Variance
GOALS
When you have completed this chapter, you will be able to:
ONE : Discuss the general idea of analysis of variance.
TWO : List the characteristics of the F distribution.
THREE : Conduct a test of hypothesis to determine
whether two sample variances are equal.
FOUR : Organize data into a one-way ANOVA table.
FIVE : Conduct a test of hypothesis among three or more
treatment means.
SIX : Develop confidence intervals for the difference
between treatment means.
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
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Characteristics of F-Distribution
There is a family of F Distributions Each
member of the family is determined by two
parameters: the numerator degrees of freedom
and the denominator degrees of freedom.
(Note: That the shape of the curve changes
as the degree of freedom change.)
The F distribution is continuous.
F cannot be negative.
The F distribution is positively skewed.
As F the curve approaches the x-axis.
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
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Test for Equal
Variances
For the two tail test, the test statistic is
given by:

are the sample variances for the two
samples. The null hypothesis is rejected if the
computed test statistic is greater than the critical
(table) value with confidence level and
numerator and denominator degrees of freedom.

2
2
2
1
s
s
F =
S and S
1
2
2
2

o / 2
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
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ANOVA: THE GENERAL IDEA
The second use of the F distribution
involves the ANOVA technique.

- ANOVA uses sample information to
determine whether or not three or more
treatments produce different results.
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
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ASSUMPTIONS UNDERLYING THE ANOVA TEST
Before we actually conduct a test using the
ANOVA technique, the assumption underlying the test
will be examined. If any of the following assumptions
cannot be met.
Another analysis of variance technique
1. The three or more population of interest are
normally distributed.
2. The distribution have equal standard deviations.
3. The sample we select from each of the population
are random and independent that is, they are not
related.

Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
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Analysis of Variance Procedure
The Null Hypothesis: the population means are
the same.
The Alternative Hypothesis: at least one of the
means is different.
The Test Statistic:


Decision rule:
For a given significance level o , reject the null
hypothesis if F (computed) is greater than F (table) with
numerator and denominator degrees of freedom.
leVariance WithinSamp
e pleVarianc BetweenSam
F =
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
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MARCHAL
EXAMPLE 1
Supposed the manager of RMP branch of
Appliance Center Inc. resigned, and 3
salespeople at the branch are being
considered for the position. All 3 have the
same length of service, education, and so on.
In order to make a decision, it was suggested
that each of their monthly sales records be
examined.
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
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MONTHLY SALES (P0000)
Ms. MAPES Ms. SONNAR Mr. MAFEE
15 15 19
10 10 12
9 12 16
5 11 16
16 12 17
Treatment
Means
11 12 16
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
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Step 1: THE NULL HYPOTHESIS AND THE
ALTERNATIVE HYPOTHESIS: Ho states that there is
no significant difference among the mean sales
of the three sales people; that is 1=2= 3. H1
states that at least one mean is different
Ho : 1= 2= 3
H1 : The treatment means are not the same.
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
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Step 2: THE LEVEL OF SIGNIFICANCE
The 0.05 level was selected..

Step 3 : THE TEST STATISTICS


Note: The numerator has k -1 degrees of freedom and
the denominator N k degrees of freedom where k is
the number of treatments and N is the total number of
observations.



leVariance WithinSamp
e pleVarianc BetweenSam
F =
Step 4: THE DECISION RULE


Step 5: COMPUTE F, AND ARRIVE AT A DECISION


Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
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General Format for ANOVA Table
Source of
Variation
Sum of
Squares (1)
Degrees of
Freedom(2)
Mean Square
(1)/(2)
Between
Treatments
SST K 1
Within
Treatments
SSE N - K
Total SS total
MSTR
k
SST
=
1
MSE
k N
SSE
=

MSE
MSTR
k N
SSE
k
SST
F =

=
1
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
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Where:
MSTR mean square between treatments
MSE mean square due to error. It is also referred to as the
mean square treatment.
SST sum of squares treatment.



Where: Tc^2 directs one to square each column.
nc the number of observations for each
respective treatment.
EX the sum of all observations
k the number of treatment
N total number of observation



( )
N
x
n
T
SST
c
c
2
2

=
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
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( )
(

=
c
c
n
T
x SSE
2
2
( )
( )
N
x
x SStotal
2
2

=
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
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Ms. MAPES Ms. SONNAR

Mr. MAFEE
X1 X1^2 X2 X2^2 X3 X3^2
15 225 15 225 19 361
10 100 10 100 12 144
9 81 12 144 16 256
5 25 11 121 16 256
16 256 12 144 17 289
Column Total, Tc 55 60 80 195
Sample Size , nc 5 5 5 15
Sum of squares, x^2 687 734 1306 2727
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
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( )
N
x
n
T
SST
c
c
2
2

=
( )
70
15
195
5
80
5
60
5
55
2
2 2 2
=
(

+ + = SST
( )
(

=
c
c
n
T
x SSE
2
2
(

+ + + + + =
5
80
5
60
5
55
17 .... 10 15
2 2 2
2 2 2
SSE
122 = SSE
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
MASON
MARCHAL
( )
( )
N
x
x SStotal
2
2

=
( )
192
15
195
727 , 2
2
= = SStotal
Source of
Variation
Sum of
Squares (1)
Degrees of Freedom(2) Mean
Square
(1)/(2)
Between
Treatments
70 K 1 = 3 1 = 2 35
Within
Treatments
122 N K = 15 3 = 12 10.17
SSTotal
192
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
MASON
MARCHAL
17 . 10
35
1
= =

=
MSE
MSTR
k N
SSE
k
SST
F
44 . 3 = F
The decision rule states that if the computed value is to
the critical value of 3.89., the null hypothesis is not
rejected. If the F value is > 3.89, Ho is rejected and H1
accepted. However, since 3.44 < 3.89. the null
hypothesis is accepted at the 0.05 level. From a
practical standpoint, the levels of sales of the three
salespeople being considered for store manager are the
same. No decision with respect to the position can be
made o the basis of monthly sales.
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
MASON
MARCHAL
Example 2
The following represent the test scores of three groups
of students
Group A Group B Group C
12 18 6
18 17 4
16 16 14
8 18 4
6 12 6
12 17 12
10 10 14
1. Do the means of the three groups differ significantly?
Use 0.05 level.
2. If so, apply the scheffe test to find out where the
difference are.

Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
LIND
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MARCHAL
Test after the F test
In our problems there are three means, thus three
means comparison may be made.
A vs B ; A vs C ; B vs C




Where : Sw^2 Mean Square Within Treatments
At 0.05 level of F for within groups 2, 18 degrees of
freedom, is 3.55. this value is multiplied by ( k 1),
where k is the number of groups or treatment.


( )
( )
2 1 2 1
2
2
2
1
/ N N N N Sw
x x
F
+