You are on page 1of 40

# 12-1

Chapter

Twelve

## McGraw-Hill/Irwin 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.

12-2
Chapter Twelve
Analysis of Variance
GOALS
When you have completed this chapter, you will be able to:

ONE
List the characteristics of the F distribution.
TWO
Conduct a test of hypothesis to determine whether the variances of two
populations are equal.
THREE
Discuss the general idea of analysis of variance.
FOUR
Organize data into a one-way and a two-way ANOVA table.

Goals
12-3
Chapter Twelve continued

A
Analysis
i off Variance
i
GOALS
When you have completed this chapter, you will be able to:

FIVE
Define and understand the terms treatments and blocks.
SIX
Conduct a test of hypothesis
yp among
g three or more treatment means.
SEVEN
Develop confidence intervals for the difference between treatment means.
EIGHT
Conduct a test of hypothesis to determine if there is a difference among block
means.

Goals
12-4

## 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
4.5
1
freedom. Its values range
g from 0
to . As F the
F cannot be
The F curve approaches the X-
negative and
negative,
distribution is axis but never touches it.
it is a
continuous positively
distribution. k d
skewed. Characteristics of F-
Distribution
12-5
Test for Equal Variances of Two Populations

2
s1
For the two tail test, the F = 2
test statistic
i i isi given
i by
b s2
The degrees of freedom are
n1-1 for the numerator and
n2-1 for the denominator.
s12 and s 22 are the The null hypothesis is rejected
sample variances for if the computed
p value of the
the two samples. The test statistic is greater than the
larger s is placed in critical value.
th d
the denominator.
i t
Test for Equal Variances of Two Populations
12-6

## Colin, a stockbroker at Critical

Securities, reported that the mean
rate of return on a sample of 10
i
internet stocks
k was 12.6
12 6 percent
with a standard deviation of 3.9
percent
percent.
The mean rate of return on a sample
off 8 utility
tilit stocks
t k was 10.9
10 9 percentt
with a standard deviation of 3.5
percent At the .05
percent. 05 significance level,
level
can Colin conclude that there is more
variation in the software stocks?
Example 1
12-7

H0 : I 2
U 2

H 1 : I2 > U2

## Step 3: The test statistic is the F distribution.

Example 1 continued
12-8

## Step 4: H0 is rejected Step 5: The value of F is

if F>3.68 or if p < .05.
computed as follows.
The degrees of
2
f d
freedom are n1-1
1 or 9 (3.9)
F= 2
= 1.2416
in the numerator and (3.5)
n1-1 or 7 in the
denominator. The p(F>1.2416) is .3965.

## H0 is not rejected. There is

insufficient evidence to show more
variation
i ti in i the
th internet
i t t stocks.
t k

Example 1 continued
12-9

## The F distribution is also This technique

q is called
used for testing whether two analysis of variance or
or more sample means came ANOVA
from the same or equal
populations.

## The null and alternate hypotheses for four sample

means is given as:
Ho: 1 = 2 = 3 = 4
H1: 1 = 2 = 3 = 4
The ANOVA Test of Means
12-10

## ANOVA requires the following conditions

The sampled
populations follow the
normal distribution.

## The samples are independent

The populations
pop lations ha
havee eq
equal
al
standard deviations.
Underlying assumptions for
ANOVA
12-11
Estimate of the population variance
based on the differences among the sample means
F=
Estimate of the population variance
based on the variation within the samples
p

## If there are k populations

being
i sampled, the numerator
Degrees of freedom degrees of freedom is k 1
for the F statistic in
ANOVA If there are a total of n
observations the denominator
degrees of freedom is n k.

12-12

## ANOVA divides the Total

T t l Variation
V i ti into the variation
due to the treatment, Treatment Variation, and to
the error component, Random Variation.

## In the following table,

i stands h ith observation
d ffor the b i
xG is the overall or grand mean
k is the number of treatment groups

## ANOVA Test of Means

12-13

ANOVA Table
Source of Sum of Degrees Mean F
Variation Squares of Square
Freedom
Treatments SST k-1 SST/(k-1)
(k) k =MST MST
nk(Xk-XG)2 MSE
Error SSE n-k SSE/(n-k)
i k =MSE
(Xi.k-Xk)2 Treatment variation
Total TSS n-1
n1 Random variation
i
(Xi-XG)2 Total variation

Anova Table
12-14

## Rosenbaum Restaurants specialize in meals for

families. Katy Polsby, President, recently
developed a new meat loaf dinner. Before
making it a part of the regular menu she decides
to test it in several of her restaurants.
She would like to know if
there is a difference in the
mean number b off dinners
di sold
ld
per day at the Anyor, Loris,
and Lander restaurants.
restaurants Use
the .05 significance level.

Example 2
12-15

N b off Di
Number Dinners S ld bby R
Sold Restaurant
Restaurant Aynor
y Loris Lander
Day
Day 1 13 10 18
Day 2 12 12 16
Day 3 14 13 17
Day 4 12 11 17
Day 5 17

Example 2 continued
12-16

Step
p One: State the null hypothesis
yp and the alternate
hypothesis.
Ho: Aynor = Loris = Landis
H1: Aynor = Loris = Landis

St Two:
Step T S l t the
Select th level
l l off significance.
i ifi This
Thi is
i
given in the problem statement as .05.

## Step Three: Determine the test statistic. The test

statistic follows the F distribution
distribution.

Example 2 continued
12-17

Step
p Four: Formulate the decision rule.
The numerator degrees of freedom, k-1, equal 3-1 or 2.
The denominator degrees of freedom, n-k, equal 13-3 or
10. The value of F at 2 and 10 degrees of freedom is
4.10. Thus, H0 is rejected if F>4.10 or p< of .05.

## Step Five: Select the sample, perform the calculations,

and make a decision.

## Using the data provided, the

ANOVA calculations follow.

Example 2 continued
Computation of SSE i k
12-18

(X
( i.k
i k-Xk)
2

## Anyor SS(Anyor) Loris SS(Loris) Lander SS(Lander)

#sold # ld
#sold #sold
13 (13-12.75)2 10 (10-11.5)2 18 (18-17)2
12 (12 12 75)2
(12-12.75) 12 (12 11 5)2
(12-11.5) 16 (16 17)2
(16-17)
14 (14-12.75)2 13 (13-11.5)2 17 (17-17)2
12 12.75)2
(12-12.75)
(12 11 11.5)2
(11-11.5)
(11 17 17)2
(17-17)
(17
17 (17-17)2
2.75 5 2
Xk 12.75 11.5 17

SSE: 22.75
75 + 5 + 2 = 9.75
9 75
XG : 14.00
Computation of TSS i
12-19

(Xi-X
XG)2

## Anyor TSS(Anyor) Loris TSS(Loris) Lander TSS(Lander)

# ld
#sold #sold # ld
#sold
13 (13-14)2 10 (10-14)2 18 (18-14)2
12 (12 14)2
(12-14) 12 (12 14)2
(12-14) 16 (16 14)2
(16-14)
14 (14-14)2 13 (13-14)2 17 (17-14)2
12 ((12-14))2 11 ((11-14))2 17 ((17-14))2
17 (17-14)2
9.00 30 47
TSS: 9.00 + 30 + 47 = 86.00
SSE: 9.75
XG : 14.00
Example 2 continued
Computation of TSS
Computation of SST k 12-20

nk(Xk-X
XG)2

Restaurant
R t t XT SST
Anyor 12.75 4(12.75-14)2
Loris 11.50 4(11.50-14)2
Lander 17.00 5(17.00-14)2
76.25

## Sh t t SST = TSS SSE

Shortcut:
= 86 9.75
= 76.25 Example 2 continued
Computation of SST
12-21

ANOVA Table
Source of Sum of Degrees Mean F
Variation Squares of Square
F d
Freedom
Treatments 76.25 3-1 76.25/2
=22 =38.125
38 125 38.125
38 125
Error 9.75 13-3 9.75/10 .975
=10 = 975
=.975 = 39.103
39 103
Total 86.00 13-1
=12
12

Example 2 continued
12-22

## At least two of the

Since an F of 39.103 > the treatment means are
critical F of 4.10, the p of not the same.
.000018 < a of .05, the
decision is to reject the The mean number of
null
ll hypothesis
h th i and d meals sold at the three
conclude that locations is not the
same.

The ANOVA tables on the next two slides are from the
Minitab and EXCEL systems. Example 2continued
12-23

Analysis of Variance
Source DF SS MS F P
Factor 2 76.250 38.125 39.10 0.000
Error 10 9.750 0.975
Total
T t l 12 86.000
86 000
Individual 95% CIs For Mean
Based on Pooled StDev
Level N Mean StDev ---------+---------+---------+---
+ + +
----
Aynor 4 12.750 0.957 (---*---)
Loris 4 11.500 1.291 (---*---)
Lander 5 17.000 0.707 (---*---)
---------+---------+---------+---
----
Pooled StDev = 0.987 12.5 15.0 17.5

Example 2 continued
12-24
Anova: Single Factor

SUMMARY
Groups Count Sum Average Variance
Aynor 4 51 12.75 0.92
Loris 4 46 11.50 1.67
Lander 5 85 17.00 0.50

ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 76.25 2 38.13 39.10 2E-05 4.10
Within Groups 9 75
9.75 10 0 98
0.98

Total 86.00 12

Example 2 continued
12-25

## When I reject the null

hypothesis that the
means are equal, I want
to know which
i treatment
means differ.

## One off the

O th simplest
i l t procedures
d
is through the use of confidence
intervals around the difference
in treatment means.
Inferences About
Treatment Means
12-26

1 1
( X1 X2 ) t MSE n + n
1 2

t is obtained from
th t ttable
the bl with
ith MSE = [SSE/(n - k)]
degrees of freedom
(n - k).
k)

## If the confidence interval around the difference

in treatment means includes zero, there is not a
difference between the treatment means.
Confidence Interval for the
Difference Between Two Means
12-27
95% confidence interval for the difference
in the mean number of meat loaf dinners
sold in Lander and Aynor

## Can Katy conclude that

there is a difference
between the two
restaurants?

1 1
(17 12.75) 2.228 .975 +
4 5
4.25 1.48 ( 2.77 ,5.73)
EXAMPLE 3
12-28

## Because zero is not

in the interval, we
conclude that this
pair
i off means
differs.

## The mean number

of meals sold in
Aynor is different
from Lander.

Example 3continued
12-29

## Sometimes there are other causes of variation. For the two-

factor ANOVA we test whether there is a significant difference
between the treatment effect and whether there is a difference
in the blocking effect (a second treatment variable)
variable).

## SSB = r (Xb XG)2

where r is the number of blocks
Xb is the sample mean of block b
XG is the overall or grand mean

## g ANOVA table,, all sums of squares

In the following q are
computed as before, with the addition of the SSB.
Two-Factor ANOVA
12-30

ANOVA Table
Source of Sum of Squares Degrees Mean F
Variation of Square
F d
Freedom
Treatments SST k-1 SST/(k-1)
(k) =MST MST
Blocks SSB b-1 SSB/(b-1) MSE
(b) =MSB
MSB
Error SSE (k-1)(b-1) SSE/(n-k) MSB
(TSS SST SSB) =MSE MSE
Total TSS n-1

## Two factor ANOVA table

12-31
The Bieber Manufacturing
Co operates 24 hours a
Co.
day, five days a week. The
workers rotate shifts each
week. Todd Bieber, the
owner, is interested in
whether there is a
difference in the number of
units
it produced
d d when h theth At the .05
05 significance level,
level
employees work on can we conclude there is a
various shifts
shifts. A sample of difference in the mean
five workers is selected production by shift and in
and their output
p recorded the mean production by
on each shift. employee?
Example 4
12-32

## Employee Day Evening Night

Output Output Output
McCartney 31 25 35

Neary 33 26 33

Schoen 28 24 30

Thompson 30 29 28

Wagner 28 26 27

Example 4 continued
12-33
Treatment Effect
Step 1: State the null hypothesis and
the alternate hypothesis.
Step 2: Select the level of
H 0 : 1 = 2 = 3 significance. Given as .05.
H1: Not
N all
ll means are equal.
l
Step 3: Determine the Step 4: Formulate the
test statistic. The test decision rule.
statistic follows the F Ho is rejected if F > 4.46,
di t ib ti
distribution. th degrees
the d off freedom
f d are
2 and 8, or if p < .05.
Step 5: Perform the calculations
Example 4 continued
and make a decision.
12-34
Block Effect
Step 1: State the null hypothesis and
the alternate hypothesis.
yp Step 2: Select the
H0 : 1 = 2 = 3 = 4 = 5 level of significance.
Given as = .05.
H1: Not all means are equal.

## Step 3: Determine the Step 4: Formulate the

test statistic. The test decision rule.
statistic
t ti ti follows
f ll the
th F H0 is rejected if F
F>3.84,
3.84,
distribution. df =(4,8) or if p < .05.

St 5:
Step 5 Perform
P f th
the calculations
l l ti andd Example 4 continued
make a decision.
Note: xG = 28.87 Block Sums of Squares 12-35

Effects
ff off time off dayy and worker on productivity
p y
Day Evening Night Employee x SSB
McCartney 31 25 35 30.33 )2
3(30.33-28.87)
(
= 6.42

## Neary 33 26 33 30.67 3(30.67-28.87)2

= 9.68
Schoen 28 24 30 27.33 3(27.33-28.87)2
7.08
Thompson 30 29 28 29.00 3(29.00-28.87)2
.09
09
Wagner 28 26 27 27.00 3(27.00-28.87)2
10 49
10.49
SSB = 6.42 + 9.68 + 7.08 + .05 + 10.49= 33.73
12-36

## Compute the remaining sums of squares as before:

TSS = 139.73
139 73
SST = 62.53
SSE = 43.47 (139.73-62.53-33.73)
( )
df(block) = 4 (b-1)
df(treatment) = 2 (k-1)
df(error)=8 (k-1)(b-1)

Example 4 continued
12-37

ANOVA Table
Source of Sum of Degrees of Mean F
Variation Squares Freedom Square
Treatments 62.53 2 62.53/2 31.27/5.43
(k) =31.275 = 5.75

## Blocks 33.73 4 33.73/4 8.43/5.43

(b) =8 43
=8.43 =1 55
=1.55
Error 43.47 8 43.47/8
=5.43
5.43
Total 139.73 14

Example 4 continued
12-38

Treatment Effect
Since the computed Block Effect
F of 5.75 > the Since the computed F of
critical
i i l F off 4.10,
4 10 1.55 < the critical F of 3.84,
the p of .03 < of the p of .28> of .05, H0 is
.05,
05 H0 is rejected
rejected. not rejected since there is no
There is a significant difference in the
difference in the average number of units
mean number of produced for the different
units produced for employees.
the different time
periods.

Example 4 continued
12-39
Minitab output

T
Two-way ANOVA Units
ANOVA: U it versus Worker,
W k Shift

## Analysis of Variance for Units

Source DF SS MS F P
Worker 4 33.73 8.43 1.55 0.276
Shift 2 62.53 31.27 5.75 0.028
Error 8 43.47 5.43
Total 14 139.73

Example 4 continued
12-40

## SUMMARY Count Sum Average Variance

Day 5 150 30.0 4.5
Evening 5 130 26.0 3.5
Night 5 153 30.6 11.3

## McCartney 3 91 30.33 25.33

Neary 3 92 30.67 16.33
S h
Schoen 3 82 27 33
27.33 9 33
9.33
Thompson 3 87 29.00 1
Wagner 3 81 27.00 1

ANOVA
Source of
Variation SS df MS F P-value F crit
Rows 62.53 2 31.27 5.75 0.03 4.46
Columns 33.73 4 8.43 1.55 0.28 3.84
Error 43.47 8 5.43

## Output Total 139.73 14

Using
EXCEL Example 4 continued