Analysis of variance (ANOVA)

It is a statistical test for detecting differences in group means when there is one parametric
dependent variable and one or more independent variables. This article summarizes the
fundamentals of ANOVA for an intended benefit of the clinician reader of scientific literature
who does not possess expertise in statistics. The emphasis is on conceptually-based perspectives
regarding the use and interpretation of ANOVA, with minimal coverage of the mathematical
foundations. Computational examples are provided. Assumptions underlying ANOVA include
parametric data measures, normally distributed data, similar group variances, and independence
of subjects. However, normality and variance assumptions can often be violated with impunity if
sample sizes are sufficiently large and there are equal numbers of subjects in each group. A
statistically significant ANOVA is typically followed up with a multiple comparison procedure
to identify which group means differ from each other. The article concludes with a discussion of
effect size and the important distinction between statistical significance and clinical significance.

ANOVA is a useful statistical tool for drawing inferential conclusions about how one or more
independent variables influences a parametric dependent variable (outcome measure). It is
imperative to keep in mind that statistical significance does not necessarily correspond to clinical
significance. The much sought after statistically significant ANOVA p value has only two
purposes: to play a role in the inferential decision as to whether group means differ from each
other (rejection of Null hypothesis), and to assign a probability of the risk of committing a Type
1 error if the Null hypothesis is rejected. Statistically significant ANOVA and MCPs say nothing
about the magnitude of group mean differences, other than that a difference exists. A large
sample size can produce statistical significance with small differences in group means;
depending on the outcome measure, these small differences may have little clinical significance.
Assigning clinical significance is a judgment call that needs to take into account the magnitude
of the differences between groups, which is best assessed by examination of effect sizes.
Statistical significance plays the role of a searchlight to detect group differences, whereas effect
size is useful for judging the clinical significance of these differences.
Analysis of Means

The analysis of means (ANOM) is a common statistical procedure in quality assurance for
comparing several treatments means against an overall mean (grand mean) in a variety of
experimental design and observational study situations. It is basically a graphical method,
yielding control charts that allow to draw conclusions and interpret results easily with respect to
both statistical and practical significance. the analysis of means (ANOM) has been circulating in
the quality control literature for decades, routinely describing it as a statistical stand-alone
concept. Therefore, we clarify that ANOM should rather be regarded as a special case of a much
more universal approach known as multiple contrast tests (MCTs). Perceiving ANOM as a
grand-mean-type MCT paves the way for implementing it in the opensource software R. We give
a brief tutorial on how to exploit R’s versatility and introduce R package ANOM for drawing the
familiar decision charts. Beyond that, we illustrate two practical aspects of data analysis with
ANOM: firstly, we compare merits and drawbacks of ANOM-type MCTs and ANOVA F-test
and assess their respective statistical powers, and secondly, we show that the benefit of using
critical values from multivariate t-distributions for ANOM instead of simple Bonferroni
quantiles is oftentimes negligible.

The analysis of means has been applied in quality control for several decades and with numerous
extensions e.g., for discrete endpoints, unbalanced data, heterogeneous variances, various
experimental designs, and more. Nonparametric approaches have been proposed as well as tests
for comparing variances. Usually, ANOM has been treated as if it were a stand-alone method,
but in truth it belongs to a much broader class of multiple comparison procedures known as
multiple contrast tests. One advantage of perceiving ANOM as a grand mean-type MCT is that it
makes ANOM available in the non-commercial software R that facilitates computing
multivariate t quantiles, which are the key to obtaining adjusted p-values, SCIs, and the popular
ANOM charts, which we implemented for the first time in R. Our package ANOM is open-
source software and can be downloaded for free. In many cases, however, adjusting for
multiplicity with critical values from a multivariate t-distribution is over the top. The power gain
compared to a simple Bonferroni correction is practically irrelevant. The clear advantage of
Bonferroni’s method is that it is blindingly easy to use and widely known among non-
statisticians. Especially when there are lots of group means to be compared to the grand mean, a
simple Bonferroni correction works fine, and the improvement of applying a more sophisticated
method which acknowledges the correlation in the multivariate t-distribution is negligible. The
decision whether to analyze data with ANOM or ANOVA should be based on subject-matter
grounds since both procedures provide distinctly different information. Whenever the question of
interest is ‘Which groups differ from the grand mean?’, a multiple comparison procedure like
ANOM yields more meaningful results than purely global inference using the F-test, and it can
even be more powerful in finding differences.

Regression Analysis

In statistics, regression analysis includes many techniques for modeling and analyzing several
variables, when the focus is on the relationship between a dependent variable and one or more
independent variables. More specifically, regression analysis helps one understand how the
typical value of the dependent variable changes when any one of the independent variables is
varied, while the other independent variables are held fixed. Most commonly, regression analysis
estimates the conditional expectation of the dependent variable given the independent variables
— that is, the average value of the dependent variable when the independent variables are fixed.
Less commonly, the focus is on a quantile, or other location parameter of the conditional
distribution of the dependent variable given the independent variables. In all cases, the
estimation target is a function of the independent variables called the regression function. In
regression analysis, it is also of interest to characterize the variation of the dependent variable
around the regression function, which can be described by a probability distribution. Regression
analysis is widely used for prediction and forecasting, where its use has substantial overlap with
the field of machine learning. Regression analysis is also used to understand which among the
independent variables are related to the dependent variable, and to explore the forms of these
relationships. In restricted circumstances, regression analysis can be used to infer causal
relationships between the independent and dependent variables. However, this can lead to
illusions or false relationships, so caution is advisable See correlation does not imply causation.
A large body of techniques for carrying out regression analysis has been developed. Familiar
methods such as linear regression and ordinary least squares regression are parametric, in that the
regression function is defined in terms of a finite number of unknown parameters that are
estimated from the data. Nonparametric regression refers to techniques that allow the regression
function to lie in a specified set of functions, which may be infinite-dimensional. The
performance of regression analysis methods in practice depends on the form of the data
generating process, and how it relates to the regression approach being used. Since the true form
of the data-generating process is generally not known, regression analysis often depends to some
extent on making assumptions about this process. These assumptions are sometimes testable if a
large amount of data is available. Regression models for prediction are often useful even when
the assumptions are moderately violated, although they may not perform optimally. However, in
many applications, especially with small effects or questions of causality based on observational
data, regression methods give misleading results

In statistics, a statistical model is a part of mathematical model which incorporates a set of

assumptions and is basically concerned with generation of data which is similar and synthesized
from a larger sample. A statistical model is basically a data-generating process. The suppositions
used by a statistical model represents a combination of probability distributions, where some of
which adequately represent the particular data set. It is the innate use of probability which is
unique to statistical models. In statistical modelling, Regression Analysis is a technique to find
out the relationship between different variables. Regression looks closely into how a dependent
variable is affected upon varying an independent variable while keeping the other independent
variables constant. Regression analysis is used by mathematicians and data scientists alike for p
hen using that model to make further predictions. The ideal model showcases all the
relationships accurately. Naturally, a tool based on regression analysis can provide valuable
insights to an economist or a manager.

The various uses or advantages of Regression Analysis are as follows:

 Can be used to predict the future: By using the relevant model to a data set, Regression
Analysis can accurately predict a lot of useful information like Stock Prices, Medical
Conditions and even Sentiments of the public.
 Can be used to back major decisions and policies: Results from regression analysis adds a
scientific backing to a decision or policy and makes it even more reliable as it likelihood
of success is then high.
 Can correct an error in thinking or disabuse: Sometimes, an anomaly between the
prediction of regression analysis and a decision/thinking can help correct the fallacy of
the decision.
 Provides a new perspective: large data sets realize their potential to provide new
dimensions to a study through the application of Regression Analysis.

Therefore, Regression analysis is a very important tool for a Data Scientist working with
Data Sets. To yield the correct results from different types of Data Sets with different
relationships, different types of Regression Analysis models are used.