CHAPTER-4

Causal/EXPERIMENTAL RESEARCH DESIGNS

 SLIDE1

What is an Experiment?

• An experiment is generally used to infer

a causality. In an experiment, a
researcher actively change one or more
causal variables and measures their
effects on the dependent variable of
interest.
Illustration to understand Causality

The sales manager of a soft drink bottling company

sends some of his salesperson for a new sales training
programme. Three months after they return from the
training programme , the sales in the territory where
this sales force was working increases by 20 %.

The sales manager concludes that the training programme is very

effective and therefore sales force from the other territories
should also
be sent for the same.
Identify Casual and effect variable

Causal variable :
Effect Variable:
 SLIDE 4

Concepts Used in Experiments

• Independent variables: Independent variables
are also known as explanatory variables or
treatments. The levels of these variables are
manipulated (changed) by researchers to
measure their effect on the dependent variable.
• Test units: Test units are those entities on which
treatments are applied.
• Dependent variables: These variables measures
the effect of treatments (independent variable)
on the test units.
 SLIDE 5

• Extraneous variables: These are the variables other

than the independent variables which influence the
response of test units to treatments.
As mentioned earlier the increase in sales could have
been due to many other factors:
1.
2.
3.
4.
• The researcher can not rule out the influence
of other causal factors such as the weather
conditions.

• However it may be possible to control some of

the extraneous variables by the use of
experimental design.
 SLIDE 8

Statistical designs

Statistical designs allow for statistical control and

analysis of external variables.
• Completely randomized design
• Randomized block design
• Latin square design
• Factorial design
I
 Completely randomized design

This design is used when a researcher is investigating

the effect of one independent variable on the dependent
variable.

The statistical technique used for this type of design is called

ANOVA.
1.Completely randomized design in a One-way Anova

• It involves the testing of the equality of means of two or

more groups.
• Example A
Suppose we want to compare the cholesterol contents of four
competing diet foods on the basis of the following data ( in
milligrams per package)
Diet Food A 3.6 4.1 4.0
Diet Food B 3.1 3.2 3.9

Diet Food C 3.2 3.5 3.5

Diet Food D 3.5 3.8 3.8

 Use of SPSS in conducting one –way ANOVA

• Dependent variable is metric

• Independent variable categorical ( nominal
scale)

• Sample is drawn from each category at

random .
• Sample size from each category could be same
or different.
Example B
A fast food chain promises to deliver customer orders
within 5 minutes of customers placing the order. The chain
has opened its outlets at 4 major cities of India (Mumbai,
Delhi, Chennai and Bangalore). The company has major
concerns about deliveries being on time as promised. It also
wants to evaluate its performance in the four cities where
they have just started their business. The performance of the
chains in the four cities is closely monitored for a month to
identify potential areas that need improvement.
Data taken randomly from the four outlets over a period of
one moth is shared in the excel sheet showing service time in
minutes.
 Solution
• Identify Dependent and Independent Variable

• Carry out One –Way ANOVA using SPSS software to check

whether service time is same in four outlets or not.
Example C
The following set of data is obtained for the sales of a
product corresponding to three price levels- 39/-( low).
44/- ( medium) and 49/- ( high). The data pertains to 5
Randomly selected retail stores where the product was
sold .
Price Sales ( in lakhs of rupees)
Level
Low 8 12 10 9 11
Medium 7 10 6 8 9
High 4 8 7 9 7
Test whether the difference in sales corresponding to various
price levels can be attributed to chance at 5 percent level of
significance. In case of significant difference , carry out further
analysis.
2. Randomized Block Design
The main limitation of the completely randomized
design is that all extraneous variables were assumed to
be constant.

In this design it is possible to separate the influence of

one extraneous variable on a particular dependent
variable.
 Example
Suppose we have additional information that measurement of
the cholesterol content was performed in three different
laboratories. The first value of each sample came from one
laboratory , the second value came from another laboratory and
the third value came from third laboratory. The data is presented
below:
Diet Food Lab 1 Lab 2 Lab 3

Diet Food A 3.6 4.1 4.0

Diet Food B 3.1 3.2 3.9

Diet Food C 3.2 3.5 3.5

Diet Food D 3.5 3.8 3.8

Perform a two-way ANOVA using a 5 % level of
significance.
 Two- Way Anova ( Testing the equality of
mean)
Solution :Two Hypotheses to be tested:
1. Diet Food
Null : all means are equal( Average cholesterol content
in four diet food is same)
Alternative: At least two means are not same.
2. Blocks or Labs
Null : (Average cholesterol content in the three labs is
same)
Alternative: At least two means are not same
Null hypotheses is rejected in both the cases.
 Example 2
The following table presents the number of the defective pieces
produced by three workmen operating in three different
machines. Conduct a two-way to test at 5 per cent level of
significance ;(i)whether the differences among the means
obtained for 3 workmen can be attributed to
chance(ii)differences among the means obtained for 3 machines
can be attributed to chance.
M1 M2 M3

Workman 1 27 34 23

Workman 2 29 32 25
Workman 3 22 30 22
 Solution
Two Hypotheses to be tested:
1.Workman
Null: Average numbers of the defectives produced by the three
workmen are the same.
Alternative: At least two means are not same.
2. Machines
Null: Average numbers of the defectives produced by the three
Machines are the same
Alternative: At least two means are not same.
 Conclusion
First Null hypothesis is accepted.

Hypothesis ( machines) is rejected

 Latin Square Design
This design is used when the researcher is interested in
separating out the influence of two extraneous variables.
It allows researcher to statistically control two
non- interacting extraneous /external/block variable
Suppose the interest is to study the influence of price on
sales. ( Example C earlier)
The sales could be influenced by two extraneous variable
namely Store Size and Type of Packaging
For the application of Latin square design, the number
of categories of two extraneous variables should be
equal to the levels of independent variable. This is the
necessary condition for the use of Latin square
design. The store could be of size – small(1) ,
medium(2) and large(3) and type of packaging could be
I, II and III.
Layout of Latin square design.( Example)

A company tried to study the effect of three price levels

( 12/-=A,15/-= B, 18/-=C)on the sales of its product in a
Latin square design by controlling the influence of three
types stores (small, medium and large ) and three types
of packaging I, II and III. The data is presented below:
(Data in Excel)
Examine whether the three price levels have an equal
effect on sales.
Null : Three price levels have the same effect on
sales.
Alternative: Three price levels does not have the
same effect on sales.
 Factorial Design
Here it is possible to examine the interaction between the
variables.
It is generally observed that there are differences in the pay
packages offered to Fresh MBA passouts.The variation could be
due to the type of business school where they have studied or it
could be due to their area of specialization. For example , the
specialization in finance at one business school might fetch a
better package.
All these presumptions can be tested with the help of factorial
design.
 Example
The following data refers to the salary package ( in lakhs of
rupees)offered to MBA students with different specializations
and having studied at four different business schools. Only two
students are taken for each interaction between the institute and
field of specialization.
Specialization I II III IV
Marketing 6 4 8 6
5 5 6 4
Finance 7 6 6 9
6 7 7 8
Operations 8 5 10 9
7 5 9 10
Test the hypothesis (i) whether the difference between the pay
packages offered by different business schools can be attributed
to chance, ( ii) average pay packages by all specializations are
Equal, (iii) the average pay package for 12 interactions are equal.
 Use of SPSS in a factorial Design
• SPSS Format
S_Package= Salary Package
SP_ZATION= Specialization which takes values
1
2
3
B_SCHOOL = Business School which takes values
1
2
3
4
Business schools:
Null: Average pay package for all the institutions are equal.
Alternative : Average pay package for all the institutions are not
Equal.

Specialization:
Null: Average pay package for all the specializations are equal.
Alternative : Average pay package for all the institutions are not
Equal.
Interaction:
Null: Average pay package for all 12 interactions
are equal.
Alternative : Average pay package for all 12
interactions are not equal.