Analysis of Variance (ANOVA) is a parametric statistical technique used to compare datasets.

This
technique was invented by R.A. Fisher, and is thus often referred to as Fisher’s ANOVA, as well. It is
similar in application to techniques such as t-test and z-test, in that it is used to compare means and the
relative variance between them. However, analysis of variance (ANOVA) is best applied where more
than 2 populations or samples are meant to be compared.

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USING ANOVA TO FIND DIFFERENCES IN POPULATION MEANS

By Chew Jian Chieh

9 COMMENTS

Three methods used to dissolve a powder in water are compared by the time (in minutes) it takes until
the powder is fully dissolved. The results are summarized in the following table:

Method Results

It is thought that the population means of the three methods m1, m2 and m3 are not all equal (i.e., at
least one m is different from the others). How can this be tested?
One way is to use multiple two-sample t-tests and compare Method 1 with Method 2, Method 1 with
Method 3 and Method 2 with Method 3 (comparing all the pairs). But if each test is 0.05, the probability
of making a Type 1 error when running three tests would increase.

A better method is ANOVA (analysis of variance), which is a statistical technique for determining the
existence of differences among several population means. The technique requires the analysis of
different forms of variances – hence the name. But note: ANOVA is not used to show that variances are
different (that is a different test); it is used to show that means are different.

How ANOVA Works

Basically, ANOVA compares two types of variances: the variance within each sample and the variance
between different samples. The following figure displays the data per method and helps to show how
ANOVA works. The black dotted arrows show the per-sample variation of the individual data points
around the sample mean (the variance within). The red arrows show the variation of the sample means
around the grand mean (the variance between).

Comparing Variances Using ANOVA

Comparing Variances Using ANOVA

The assumption is: If the population means are different, then the variance within the samples must be
small compared to the variance between the samples. Hence, if the variance between divided by the
variance within is large, then the means are different.

Steps for Using ANOVA

Step 1: Compute the Variance Between

First, the sum of squares (SS) between is computed:

SS Between formula

Where x-bar is the sample mean and x-double-bar is the overall mean or grand mean. This can be easily
found using spreadsheet software:

Now, the variance between or mean square between (ANOVA terminology for variance) can be
computed.

The formula for sample variance is:

Formula for sample variance

Since there are three sample means and a grand mean, however, this is modified to:

Modified formula for sample mean

Where k is the number of distinct samples. In other words, the variance between is the SS between
divided by k – 1:

(This example uses Microsoft Excel software. In Minitab software, SS between is called SS factor,
variance between is called MS factor and K – 1 is called DF.)

Step 2: Compute the Variance Within

Again, first compute the sum of squares within. This is:

Sum of squares within equation

SS within is 70 + 62 + 60 = 192.

To obtain the variance within, use this equation:

Variance within equation

Step 3: Compute the Ratio of Variance Between and Variance Within

This is called the F-ratio. How can this be interpreted? If the null hypothesis is true, meaning m1, m2 and
m3 are all equal, then the variance between the samples is 0 (zero) (i.e., the F-ratio is also zero).

If the null hypothesis is not true, then this F-ratio will become larger, and the larger it gets, the more
likely it is that the null hypothesis will be rejected.
Using the F-tables for k = 3 and n = 16, one gets a p-value of 0.292 (use the FDIST function in Excel). This
means that the probability that the observed F-ratio of 1.354 is random is 29.2 percent:

Hence, if one sets a = 0.05, one must accept the null hypothesis that there is no difference in the
population means.

In Minitab, the results for the same data are displayed in the session window like this:

If there had been a significant difference between the samples, this would have been seen with the p-
value and also there would have been at least one confidence interval for one mean that had no, or very
little, overlap with the other confidence intervals. This would have indicated a significant difference
between its population mean and the other population means.

Minitab also computes an R-squared value (R-Sq) by taking the SS factor/SS total = 40/232 *100 = 17.24.
This shows the percent of explained variation by the factor. Here, the factor only explains 17.24 percent
of the total variation; hence, it is not a very good explanation