Statistical Methods

Analysis of Variance

To compare four different training methods.

To compare the first year earnings of the graduates of various

business schools.

To compare the mileage achieved by five different brands of

gasoline.

To test whether regional disparity of income is present amongst

the workers of a certain industry.

To test the relative efficacy of five pain relieving drugs.

Statistical Methods

Usha A. Kumar, IIT Bombay

Analysis of Variance

Random samples of size n are selected

from each of k populations. The k different
populations are classified on the basis of a
single criterion such as different treatments
or groups.
Ho: 1 = 2 = 3 = = k
Ha: At least one of the means is different from the others

Statistical Methods

Usha A. Kumar, IIT Bombay

Assumptions

Observations are drawn from normally

distributed populations
Variances of the populations are equal

Statistical Methods

Usha A. Kumar, IIT Bombay

One way analysis of variance

EXAMPLE 1:
The following data show the time taken in minutes
by five pain relieving drugs A, B, C,D and E to cure
the pain of 20 patients. Each drug was taken by
four patients. At 5% level of significance, test
whether there is any difference in efficacy in the
five pain relieving drugs.

Statistical Methods

Usha A. Kumar, IIT Bombay

One way analysis of variance

DRUGS
A
13
12
14
12

B
11
10
13
12

Statistical Methods

C
13
14
13
14

D
12
11
10
12

E
12
12
11
14

Usha A. Kumar, IIT Bombay

One way analysis of variance

Model for one way ANOVA
Treatment

1
y11
y12
..
..
..
..
..

I
y i1
yi 2
..
..
..
..
..

k
y k1
yk 2
..
..
..
..
..

y1n

y in

y kn

TOTAL

y1.

yi.

yk.

y..

Mean

y1.

y i..

yk.

y..

Statistical Methods

Usha A. Kumar, IIT Bombay

Each observation may be written as

yij = i + ij
where ij measures the deviation of the jth
observation of the ith sample from the
corresponding treatment mean.

Statistical Methods

Usha A. Kumar, IIT Bombay

One way analysis of variance

Sum of squares identity :

i =1 j =1

2
2
2

( yij y.. ) n ( yi. y.. ) ( yij yi.)

i =1

i =1 j =1

Total sum of Squares

Between sum of squares

Error sum of squares

TSS

BSS

ESS

Statistical Methods

Usha A. Kumar, IIT Bombay

An estimate of 2 is
2
S B = BSS/(k-1) when H0 is true.
A second and independent estimate of
2 is S E2 = ESS/(k(n-1))

Statistical Methods

Usha A. Kumar, IIT Bombay

F ratio for testing equality of means is

2
B
2
E

S
~ F(k-1,k(n-1))
F=
S

Reject H0 if F > F (k-1,k(n-1))

i.e if the difference among the sample means
is too large to attribute to sampling
fluctuations, we reject H0.
Statistical Methods

Usha A. Kumar, IIT Bombay

One way analysis of variance

ANOVA Table
Source of
Sum of
variation
Squares
Treatment
BSS

Degrees of
Freedom
k-1

Error

ESS

k(n-1)

Total

TSS

nk-1

Statistical Methods

Mean sum of squares F ratio

2
B

S B2
S E2

S E2

Usha A. Kumar, IIT Bombay

If the null hypothesis is rejected, we

carry out multiple comparison tests to
find which of the k means is the highest
and which of them is the lowest.

Statistical Methods

Usha A. Kumar, IIT Bombay

Example 2

A company is interested in analysing

the effect of three marketing strategies

Advertisement in local newspaper

Presence of Sales assistant
Luxury presentation in shop windows
All of these strategies are tried in 10 different
shops. The resulting sale observations are
given in the following table.

Shop

Marketing Strategy
2
3

10

18

11

15

14

10

11

17

12

15

15

14

11

13

17

12

16

10

15

14

11

13

17

10

13

10

15

Statistical Methods

Usha A. Kumar, IIT Bombay