Business Statistics:

A Decision-Making Approach
6th Edition

Chapter 11
Analysis of Variance

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Chap 11-1
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 Chapter Goals

After completing this chapter, you should be able

to:
Recognize situations in which to use analysis of variance
Understand different analysis of variance designs
Perform a single-factor hypothesis test and interpret results
Conduct and interpret post-analysis of variance pairwise
comparisons procedures
Set up and perform randomized blocks analysis
Analyze two-factor analysis of variance test with replications
results
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Chap 11-2
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 Chapter Overview

Analysis of Variance (ANOVA)

One-Way Randomized Two-factor

ANOVA Complete ANOVA
Block ANOVA with replication
F-test
F-test
Tukey-
Kramer Fishers Least
test Significant
Difference test
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Chap 11-3
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 General ANOVA Setting
Investigator controls one or more independent
variables
Called factors (or treatment variables)
Each factor contains two or more levels (or
categories/classifications)
Observe effects on dependent variable
Response to levels of independent variable
Experimental design: the plan used to test
hypothesis

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Chap 11-4
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 One-Way Analysis of
Variance

Evaluate the difference among the means of three

or more populations
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

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Chap 11-5
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 Hypotheses of One-Way
ANOVA

H0 : 1 2 3 k
All population means are equal
i.e., no treatment effect (no variation in means among
groups)

HA : 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)

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Chap 11-6
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 One-Factor ANOVA
H0 : 1 2 3 k
HA : Not all i are the same

All Means are the same:

The Null Hypothesis is True
(No Treatment Effect)

1 2 3
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 One-Factor ANOVA
(continue
H0 : 1 2 3 k d)

HA : Not all i are the same

At least one mean is different:

The Null Hypothesis is NOT true
(Treatment Effect is present)

or

1 2 3 1 2 3
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Chap 11-8
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 Partitioning the Variation
Total variation can be split into two parts:

SST = SSB + SSW

SST = Total Sum of Squares

SSB = Sum of Squares Between
SSW = Sum of Squares Within

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Chap 11-9
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 Partitioning the Variation
(continue
d)

SST = SSB + SSW

Total Variation = the aggregate dispersion of the individual

data values across the various factor levels (SST)

Between-Sample Variation = dispersion among the factor

sample means (SSB)

Within-Sample Variation = dispersion that exists among

the data values within a particular factor level (SSW)

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Chap 11-10
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 Partition of Total Variation

Total Variation (SST)

Variation Due to Variation Due to Random

= Factor (SSB/SSG) + Sampling (SSW)

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 Groups Variation

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 Total Sum of Squares

SST = SSB + SSW

k ni
SST ( x ij x ) 2

i 1 j 1
Where:

SST = Total sum of squares

k = number of populations (levels or treatments)
ni = sample size from population i
xij = jth measurement from population i
x = grand mean (mean of all data values)
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 Total Variation
(continued)

SST ( x11 x )2 ( x12 x )2 ... ( x knk x )2

R esp on se, X

G ro u p 1 G ro u p 2 G ro u p 3
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 Sum of Squares Between

SST = SSB + SSW

k
SSB ni ( x i x ) 2

i1
Where:

SSB = Sum of squares between

k = number of populations
ni = sample size from population i
xi = sample mean from population i
x = grand mean (mean of all data values)
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 Between-Group Variation
k
SSB ni ( x i x ) 2

i1

SSB
Variation Due to
Differences Among Groups MSB
k 1
Mean Square Between =
SSB/degrees of freedom

i j
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 Between-Group Variation
(continued)

SSB n1 ( x1 x ) n 2 ( x 2 x ) ... nk ( x k x )
2 2 2

Response, X

X3
X2 X
X1

G ro u p 1 G ro u p 2 G ro u p 3
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 Sum of Squares Within

SST = SSB + SSW

k nj
SSW ( x ij x i ) 2

i 1 j 1
Where:

SSW = Sum of squares within

k = number of populations
ni = sample size from population i
xi = sample mean from population i
x = j th
measurement
ij Approach,
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from population i
Chap 11-17
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 Within-Group Variation

k nj
SSW ( x ij x i )2
i1 j 1
SSW
Summing the variation
MSW
within each group and then
adding over all groups Nk
Mean Square Within =
SSW/degrees of freedom

i
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 Within-Group Variation
(continued)

SSW ( x11 x1 ) ( x12 x 2 ) ... ( x knk x k )

2 2 2

Response, X

X3
X2
X1

G ro u p 1 G ro u p 2 G ro u p 3
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Chap 11-19
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 One-Way ANOVA Table

Source of SS df MS F ratio
Variation
Between SSB MSB
SSB k-1 MSB =
Samples k - 1 F = MSW
Within SSW
SSW N-k MSW =
Samples N-k
SST =
Total N-1
SSB+SSW
k = number of populations
N = sum of the sample sizes from all populations
df = degrees of freedom
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 One-Factor ANOVA
F Test Statistic
H0: 1= 2 = = k
HA: At least two population means are different
Test statistic
MSB

F
MSW
MSB is mean squares between variances
MSW is mean squares within variances
Degrees of freedom
df1 = k 1 (k = number of populations)
df2 = N k (N = sum of sample sizes from all populations)

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 Interpreting One-Factor
ANOVA
F Statistic
The F statistic is the ratio of the between
estimate of variance and the within estimate
of variance
The ratio must always be positive
df1 = k -1 will typically be small
df2 = N - k will typically be large

The ratio should be close to 1 if

H0: 1= 2 = = k is true

The ratio will be larger than 1 if

H0: 1= 2 = = k is false
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 One-Factor 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 .05 significance level, is
there a difference in mean
distance?

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 One-Factor ANOVA Example:
Scatter Diagram
Distance
270
Club 1 Club 2 Club 3
254 234 200 260

263
241
218
235
222
197
250 X1
240
237 227 206
230
251 216 204
220

X2 X

210
x1 249.2 x 2 226.0 x 3 205.8
X3
200
x 227.0 190

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1 2 3
Chap 11-24
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 One-Factor 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 k=3
SSB = 5 [ (249.2 227)2 + (226 227)2 + (205.8 227)2 ] = 4716.4
SSW = (254 249.2)2 + (263 249.2)2 ++ (204 205.8)2 = 1119.6

MSB = 4716.4 / (3-1) = 2358.2 2358.2

F 25.275
MSW = 1119.6 / (15-3) = 93.3 93.3
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 One-Factor ANOVA Example
Solution
H0: 1 = 2 = 3 Test Statistic:
HA: i not all equal
MSB 2358.2
= .05 F 25.275
MSW 93.3
df1= 2 df2 = 12

Critical Decision:
Value:
Reject H0 at = 0.05
F = 3.885
= .05 Conclusion:
There is evidence that
0 Do not Reject H0 at least one i differs
reject H0 F = 25.275
F.05 = 3.885 from the rest
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 ANOVA -- Single Factor:
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 3.885
Groups
Within
1119.6 12 93.3
Groups
Total 5836.0 14
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