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ST102
Elementary Statistical Theory
Part II: 7. Analysis of variance (ANOVA)
Part II: Statistical inference

1. Statistical inference preliminaries
Analysis of variance (ANOVA)
2. Point estimation
3. Interval estimation and sampling distributions
Dr James
Abdey
4. Hypothesis testing
5. Other statistical tests
Department
of Statistics
London School of Economics and Political Science
6. Linear regression
7. Analysis of variance (ANOVA) time permitting
ST102 Elementary Statistical Theory
Dr James Abdey
LT 2014
Part II: 7. Analysis of variance
840
7. Analysis of variance (ANOVA)
Dr James Abdey
LT 2014
841
7.1 Testing for 3 means an introductory
example
Goal: To test the hypothesis that k populations means are the same.
7.1: Testing for 3 means an introductory example
Example: To assess the teaching quality of class teachers, a random

sample of 6 examination marks was selected from each of 3 classes. The
examination marks for each class are listed in the table below.
7.2: F tests for k Normal means with same variance
Can we infer from those data that there is no significant difference in the
examination marks among all 3 classes?
7.3: One-way ANOVA with Minitab

7.4: From one-way to two-way ANOVA
Class 1
85
75
82
76
71
85
7.5: F tests for two-way ANOVA

7.6: Two-way ANOVA with Minitab
Dr James Abdey
LT 2014
842
Class 2
71
75
73
74
69
82
Dr James Abdey
Class 3
59
64
62
69
75
67
LT 2014
843
Testing for 3 means an introductory example
Suppose examination marks from Class j follow the distribution N(j , 2 ),

j = 1, 2, 3. We need to test the hypothesis
Remark: Similar problems arise from practical situations:

comparing the returns of 3 stocks
comparing the sales using 3 advertising strategies
comparing the effectiveness of 3 medicines
...
The data form a 6 3 array. Denote the data point at the (i, j)-th
position as Xij , we compute the column means first:
1 , X
2 , X
3 should be very close to
If H0 is true, the three sample means X
each other, i.e. all of them should be close to the overall mean
j = (X1j + X2j + + X6j )/6

X
= (79 + 74 + 66)/3 = 73,
1 = 79, X
2 = 74, X
3 = 66. Transposing, we get
leading to X
Observation
Class 1
Class 2
Class 3
1
85
71
59
2
75
75
64
3
82
73
62
4
76
74
69
5
71
69
75
6
85
82
67
which is the mean value of all 18 observations.
Mean
79
74
66
One possible measure for the closeness is
j=1
scale-invariant.
Dr James Abdey
LT 2014
3
P
j X
)2 . However, it is not
(X
844
Dr James Abdey
LT 2014
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7.2 F tests for k Normal means with same
variance
A general setting: k
samples available from k Normal
2
distributions N(j , ), j = 1, . . . , k. Denote by X1j , X2j , . . . , Xnj j the
sample with the sample size nj from N(j , 2 ), j = 1, . . . , k.
A possible test statistic:

3
P
j X
)2
(X
j=1
T =
sum of the 3 sample variances
we reject H0 for large values of
T .
(Note
Goal: Test the hypothesis

H1 : not all j are the same).
(against the alternative
j =
The j-th sample mean: X
1 = X
2 = X
3 .)
= 0 if X
1
nj
The overall sample mean:

Question: What is the distribution of
under H0 ?
nj
P
Xij .
i=1
nj
XX
1X
= 1
Xij =
nj Xj ,
X
n
n
j=1 i=1
where n =
k
P
j=1
nj is the total number of observations.
j=1
Dr James Abdey
LT 2014
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Dr James Abdey
LT 2014
847
F tests for k Normal means with same variance
ANOVA decomposition:
nj
k X
X
j=1 i=1
)2 =
(Xij X
(n 1) d.f.
nj
k P
P
Total variation:
j=1 i=1
nj
k X
X
j=1 i=1
j )2 +
(Xij X
(n k) d.f.
k
X
j=1
Remarks:
j X
)2
nj ( X
(k 1) d.f.
i. B and W are also called, respectively,

and
. In fact W is effectively a Residual
(error) sum of squares, representing the variation which cannot be
explained by the treatment or group factor.
)2 , with n 1 degrees of freedom.

(Xij X
Between-treatments variation:
, with k 1
ii. The decomposition follows from the identity
degrees of freedom.
Within-treatments variation:
nk =
k
P
j=1
, with
i=1
(ai b) =
m
X
i=1
(ai a)2 + m(a b)2 .
(nj 1) degrees of freedom.
m
X
Dr James Abdey
LT 2014
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Dr James Abdey
LT 2014
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Theorem:
iii. Formulae for computations: n =
k
P
nj , and
i. W =
j=1
j =
X
nj
P
=
Xij /nj , X
i=1
Total variation =
k
P
B=
k
P
j=1
j=1 i=1
each other.
j=1
nj
k P
P
j=1 i=1
j /n
nj X
nj
k P
P
2
Xij2 nX
k
j )2 and B = P nj (X
j X
)2 are independent of
(Xij X
ii. Also,
2
2 nX
nj X
j
j=1
nj
k
1 XX
j )2 2 .
(Xij X
nk
2
j=1 i=1
Residual (Error) SS = W =
nj
k P
P
j=1 i=1
Xij2
k
P
j=1
2 =
nj X
j
Note: Total variation = Total SS = W + B.
k
P
j=1
iii. When 1 = = k ,
(nj 1)Sj2
k
1 X
j X
)2 2 .
nj (X
k1
2
j=1
Dr James Abdey
LT 2014
850
Dr James Abdey
LT 2014
851
To test H0 : 1 = = k , define the test statistic
F =
k
P
j=1
j X
)2 /(k 1)
nj ( X
nj
k P
P
j=1 i=1
j )2 /(n k)
(Xij X
One-way ANOVA table:

B/(k 1)
=
.
W /(n k)
Typically the ANOVA results are presented in a table below:

Source
Factor
Error
Total
Under H0 , F Fk1, nk . We reject H0 at the 100% significance level if

F > F, k1, nk ,
where P(Fk1, nk > F, k1, nk ) = . The p-value of the test is
DF
k 1
nk
n1
SS
B
W
B +W
MS
B/(k 1)
W /(n k)
F
B/(k1)
W /(nk)
P
p-value
p = P(Fk1, nk > observed value of F ).

It is clear that F > F, k1, nk if and only if p < .
Dr James Abdey
LT 2014
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Example: (Continued) For the given data, k = 3, n1 = n2 = n3 = 6,

1 = 79, X
2 = 74, X
3 = 66, and
n = n1 + n2 + n3 = 18, X
3
j=1
j=1
B=
j=1
F =
W =
j=1 i=1
j )2 =
(Xij X
=
3 X
6
X
Xij2
j=1 i=1
3
X
3
X
LT 2014
853
516/2
B/(k 1)
=
= 9.
W /(n k)
430/15
Under H0 : 1 = 2 = 3 , F Fk1, nk = F2, 15 . Since

F0.01, 2,15 = 6.36 < 9, we reject H0 at the 1% significance level. In fact the
p-value is P(F2,15 > 9) = 0.003.
!

j X
)2 = 6 (79 73)2 + (74 73)2 + (66 73)2 = 516,
6(X
3 X
6
X
Dr James Abdey
Hence
X
X
= 1
j = 1
j = 73.
X
nj X
X
n
3
3
X
There is a significant difference among the examination marks from the 3

classes.
j2
X
The ANOVA table is as follows:
j=1
Source
Factor
Error
Total
5Sj2 = 5(34 + 20 + 32) = 430.
j=1
DF
2
15
17
SS
516
430
946
MS
258
28.67
F
9
P
0.003
where Sj2 is the j-th sample variance.

Dr James Abdey
LT 2014
854
Dr James Abdey
LT 2014
855
Now the ANOVA test statistic is

F
An old problem: Compare two Normal means with the same, but
unknown, variance.
j=1 i=1
= (n1 X
1 + n2 X
2 )/n. Hence
When k = 2, n = n1 + n2 , and X
1 X
= n2 ( X
1 X
2 )/n,
X
where Sj2 =
2 X
= n1 ( X
2 X
1 )/n.
X
Therefore
B=
2
X
j=1
nj
P
i=1
2
2
1 X
j X
) 2 = n1 n2 + n1 n2 ( X
1 X
2 )2 = n1 n2 (X
2 )2 .
nj ( X
2
n
n
Dr James Abdey
LT 2014
1 X
2 )2
(X
n1 + n2 2
= T 2,
2
2
1/n1 + 1/n2 (n1 1)S1 + (n2 1)S2
j )2 , and
(Xij X
T =
2 )2
1 X
(X
B/(2 1)
n1 n2 (n 2)
=
nj
2 P
P
W /(n 2)
n
j )2
(Xij X
2
1 X
n1 + n2 2
X
q
1/n1 + 1/n2 (n 1)S 2 + (n 1)S 2
1
2
1
2
is a t statistic introduced for testing H0 : 1 = 2 , and T tn1 +n2 2

under H0 .
856
7.3 One-way ANOVA with Minitab
It is known that if T tq , T 2 F1, q .

Dr James Abdey
LT 2014
857
One-way ANOVA with Minitab
Example:
MTB > desc c1 c2 c3
A study performed by a Columbia University professor counted the number

of times per minute professors from three different departments said uh
or ah during lectures to fill gaps between words. The data listed in
uhah.mtw were derived from observing 100 minutes from each of the
three departments. If we assume that the more frequent use of uh or ah
results in more boring lectures, can we conclude that some departments
professors are more boring than others?
Descriptive Statistics: English, Mathematics, Political Science

Variable
English
Mathematics
Political Scienc
N
100
100
100
(You may copy the file uhah.mtw from the ST102 Moodle site into your
document folder, and double-click the file to start a Minitab session.)
Variable
English
Mathematics
Political Scienc
Q1
4.000
4.000
4.000
The counts for English, Mathematics and Political Science departments

are stored in c1, c2 and c3. As always in statistical analysis, we first look
at the summary (descriptive) statistics of these data.
Surprisingly professors in English say a bit more uh or ah than those in

Mathematics and Political Science, but the difference seems small.
Dr James Abdey
LT 2014
858
N*
0
0
0
Mean
5.810
5.300
5.330
Median
5.000
5.000
5.000
Dr James Abdey
SE Mean
0.249
0.201
0.197
Q3
8.000
7.000
7.000
LT 2014
StDev
2.493
2.013
1.975
Minimum
0.000000000
0.000000000
0.000000000
Maximum
11.000
9.000
9.000
859
The Minitab command for one-way ANOVA is aovOneway.

MTB > aovOneway c1 c2 c3
One-way ANOVA: English, Mathematics, Political Science
Source
Factor
Error
Total
DF
2
297
299
SS
16.38
1402.50
1418.88
S = 2.173
MS
8.19
4.72
F
1.73
Since the p-value for the F test is 0.178, we cannot reject the hypothesis
P
0.178
H0 : 1 = 2 = 3
i.e. the mean numbers of uhs or ahs said by professors in the 3
departments are the same.
R-Sq = 1.15%
Level
English
Mathematics
Political Scienc
N
100
100
100
R-Sq(adj) = 0.49%
Individual 95% CIs For Mean Based on
Pooled StDev
Mean StDev
-+---------+---------+---------+-------5.810 2.493
(-----------*-----------)
5.300 2.013
(-----------*------------)
5.330 1.975
(-----------*------------)
-+---------+---------+---------+-------4.90
5.25
5.60
5.95
Pooled StDev = 2.173
Dr James Abdey
LT 2014
860
In addition to a one-way ANOVA table, the Minitab output also provides:
Squared correlation coefficients:
2
Radj
= 1
16.38
B
=
= 0.0115 = 1.15%,
Total SS
1,418.88
W /(n k)
1,402.50/297
= 1
= 0.0049 = 0.49%.
(Total SS)/(n 1)
1,418.88/299
95% confidence intervals for j :
j t0.025, nk S ,
X
nj
Dr James Abdey
LT 2014
j = 1, . . . , k.
Dr James Abdey
LT 2014
861
One-way ANOVA worked example
Example: In early 2001, the American economy was slowing down and
companies were laying off workers. A poll conducted during 911 February
2001, asked a random sample of workers how long (in months) it would be
before they had significant financial hardship if they lost their jobs. They
are classified into 4 groups according to their incomes. Below is a part of
Minitab output of the descriptive statistics of the classified data. Can we
infer that income has a significant impact on the length of time before
facing financial hardship?
Estimate for :
p
p
b = S = W /(n r ) = 1,402.50/297 = 4.72 = 2.173

R2 =
862
MTB > desc c1-c4

Variable
N
Over $50K
39
$30 to 50K 114
$20 to 30K
81
Under $20K
67
Mean
22.21
18.456
15.49
9.313
SE Mean
1.77
0.890
1.03
0.988
Dr James Abdey
StDev
11.03
9.507
9.23
8.087
LT 2014
863
We apply one-way ANOVA to test whether the means in the k = 4 groups

are the same, i.e. H0 : 1 = 2 = 3 = 4 .
n1 = 39, n2 = 114, n3 = 81, n4 = 67, hence
n=
k
X
nj = 39 + 114 + 81 + 67 = 301.
S12 = 11.032 = 121.661, S22 = 9.5072 = 90.383, S32 = 9.232 =

85.193, S42 = 8.0872 = 65.400, hence
=
j=1
nj
k X
X
j=1 i=1
39 22.21 + 114 18.456 + 81 15.49 + 67 9.313

= 16.109.
301
F =
Now
j=1
j X
)2 = 39(22.21 16.109)2 + 114(18.456 16.109)2
nj (X
+ 81(15.49 16.109)2 + 67(9.313 16.109)2 = 5205.097.
j=1
(nj 1)Sj2
Consequently,
j=1
k
X
k
X
= 25,968.24.
X
= 1
j
X
nj X
n
B =
j )2 =
(Xij X
= 38 121.661 + 113 90.383 + 80 85.193 + 66 65.4
2 = 18.456, X
3 = 15.49, X
4 = 9.313, and
1 = 22.21, X
X
Dr James Abdey
LT 2014
864
5,205.097/3
B/(k 1)
=
= 19.84.
W /(n k)
25,968.24/(301 4)
Under H0 , F Fk1, nk = F3, 297 . Since F0.01, 3, 297 = 3.848 < 19.84, we
reject H0 at the 1% significance level, i.e. income has a significant impact
on the length of time before facing financial hardship.
Dr James Abdey
LT 2014
865
The data is the file gallupPoll.mtw.
The pooled estimate for :

p
p
S = W /(n k) = 25,968.24/(301 4) = 9.351.
MTB > aovoneway c1-c4

One-way ANOVA: Over $50K, $30 to 50K, $20 to 30K, Under $20K
Source
Factor
Error
Total
A 95% confidence interval for j :
j t0.025, 297 S/nj = X

j 1.968 9.351/nj = X
j 18.403/nj .
X
DF
3
297
300
S = 9.352
Hence, for example, the confidence interval for 1 is
22.21 18.403/ 39 = (19.26, 25.16)
Level
Over $50K
$30 to 50K
$20 to 30K
Under $20K
and the confidence interval for 4 is
9.313 18.403/ 67 = (7.06, 11.56).

The two confidence intervals are far away from each other.
SS
5202.1
25973.3
31175.4
MS
1734.0
87.5
R-Sq = 16.69%
N
39
114
81
67
Mean
22.205
18.456
15.494
9.313
F
19.83
P
0.000
R-Sq(adj) = 15.84%
StDev
11.029
9.507
9.233
8.087
Individual 95% CIs For Mean Based on

Pooled StDev
------+---------+---------+---------+--(----*-----)
(---*--)
(---*---)
(----*---)
------+---------+---------+---------+--10.0
15.0
20.0
25.0
Pooled StDev = 9.352
Note: Minor differences were due to rounding errors in calculations.

Dr James Abdey
LT 2014
866
Dr James Abdey
LT 2014
867
7.4 From one-way to two-way ANOVA
One-way ANOVA a revisit:

We have independent observations Xij N(j , 2 ) for i = 1, . . . , nj and
j = 1, . . . , k. We are interested in testing
Two-way ANOVA deals with the observations:

Xij = + i + j + ij ,
H0 : 1 = = k .
i = 1, . . . , nj , j = 1, . . . , k,
where ij N(0, 2 ) and are independent,

:
j :
P
Note kj=1 j = 0. The null hypothesis (i.e. no treatment effect) is
represented as H0 : 1 = = k = 0.
Dr James Abdey
i = 1, . . . , r , j = 1, . . . , c,
where
Key idea: The variation of Xij is driven by a treatment factor at different

).
levels 1 , . . . , k , in addition to random fluctuations (i.e.
We test if such a treatment effect exists or not.
We recast a one-way ANOVA problem as follows:
Xij = + j + ij ,
7.5 F tests for two-way ANOVA
LT 2014
represent the
1 , . . . , c represent c different
1 , . . . , r represent r different
ij N(0, 2 ) and are independent.
There are n = rc observations.
Conditions to make parameters , i , j identifiable:
1 + + r = 0,
868
F tests for two-way ANOVA
1 + + c = 0.
Dr James Abdey
LT 2014
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Hypotheses of interest:
Similar to the original model
No treatment effect hypothesis, H0 : 1 = = c = 0.

No block effect hypothesis, H0 : 1 = = r = 0.
Xij = + i + j + ij ,
we decompose the observations as follows:
We compute different types of mean:

i =
Mean at the i-th block level: X
c
P
Xij /c,
+ (X
i X
) + (X
j X
) + (Xij X
i X
j + X
)
Xij = X
i = 1, . . . , r
for i = 1, . . . , r and j = 1, . . . , c.
j=1
j =
Mean at the j-th treatment level: X
r
P
Xij /r ,
j = 1, . . . , c
,
Point estimators:
b=X
i=1
r
c
=X
= P P Xij /rc.
Overall mean: X
i X
j + X
.
Residuals: bij = Xij X
i=1 j=1
Dr James Abdey
LT 2014
i X
,
bi = X
870
Dr James Abdey
LT 2014
j X
.
bj = X
871
Two-way ANOVA decomposition:

c
r X
X
i=1 j=1
)2 = c
(Xij X
+
r
X
i X
)2 + r
(X
i=1
c
r
XX
i=1 j=1
Pr
c
X
j=1
To test no block (row) effect H0 : 1 = = r = 0, the test statistic is

defined as
(c 1)Brow
Brow /(r 1)
=
.
F =
(Residual SS)/[(r 1)(c 1)]
Residual SS
j X
)2
(X
Under H0 , F Fr 1, (r 1)(c1) . We reject H0 at the 100% significance

level if F > F, r 1, (r 1)(c1) . The p-value is
i X
j + X
) .
(Xij X
2
P(Fr 1, (r 1)(c1) > observed value of F ).
Pc
)2 , with rc 1 degrees of
Total variation: Total SS = i=1 j=1 (Xij X
freedom.
P
i X
)2 , with r 1
Between-blocks (rows) variation: Brow = c ri=1 (X
degrees of freedom.
P
j X
)2 ,
Between-treatments (columns) variation: Bcol = r cj=1 (X
with c 1 degrees of freedom.
Residual
variation: Residual SS
Pr P(Error)
c
i X
j + X
)2 , with (r 1)(c 1) degrees of
= i=1 j=1 (Xij X
freedom.
Dr James Abdey
LT 2014
872
To test no treatment (column) effect H0 : 1 = = c = 0, the test

statistic is defined as
(r 1)Bcol
Bcol /(c 1)
=
.
F =
(Residual SS)/[(r 1)(c 1)]
Residual SS
Under H0 , F Fc1, (r 1)(c1) . We reject H0 at the significance level if

F > F, c1, (r 1)(c1) . The p-value is
P(Fc1, (r 1)(c1) > observed value of F ).
Dr James Abdey
LT 2014
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Computational formulae:
i = Pc Xij /c, i = 1, . . . , r
Row means: X
j=1
Two-way ANOVA table:
j =
Column means: X
Source
DF
SS
MS
Row
r 1
Brow
Brow /(r 1)
(c1)Brow
Residual SS
p-value
Column
c 1
Bcol
Bcol /(c 1)
Residual SS
Error
(r 1)(c 1)
Residual SS
Total
rc 1
Total SS
(r 1)Bcol
=
Overall mean: X
p-value
Total SS =
Residual SS
(r 1)(c1)
Pr
i=1
Pr
i=1 Xij /r ,
Pr
i=1
Pc
Pc
2
j=1 Xij
Row variation: Brow = c
Dr James Abdey
LT 2014
874
j=1 Xij /rc
2
rc X
Pr
2
i=1 Xi
Column variation: Bcol = r
j = 1, . . . , c
Pc
Pr
i=1 Xi /r
2
j=1 Xj
Dr James Abdey
Pc
j=1 Xj /c
2
rc X
2
rc X
Residual
Brow Bcol =
Pr PcSS =2 (Total
PSS)
r
2 r Pc X
2
2
X
X
c
i=1
j=1 ij
i=1 i
j=1 j + rc X .
LT 2014
875
F tests for two-way ANOVA example
Example:
The table below lists the percentage annual returns (calculated four times
per annum) of the Common Stock Index at the New York Stock Exchange
during 198185.
1981
1982
1983
1984
1985
1st quarter
5.7
7.2
4.9
4.5
4.4
2nd quarter
6.0
7.0
4.1
4.9
4.2
3rd quarter
7.1
6.1
4.2
4.5
4.2
4th quarter
6.7
5.2
4.4
4.5
3.6
r = 5, c = 4.
P
i = c Xij /c which are, respectively, 6.375, 6.375, 4.4,
Row means: X
j=1
4.6, 4.1 for i = 1, . . . , 5.
j =
Column means: X
4.88 for j = 1, . . . , 4.
Pr
2. Is the variability in returns from year to year statistically significant?

Idea: Using two-way ANOVA, test no column effect hypothesis to answer
1., and test no row effect hypothesis to answer 2..
Bcol = r
LT 2014
2
j=1 Xj
2
j=1 Xij
Brow = c
876
Pc
Pc
i=1 Xij /r
Pr
i=1 Xi /r
which are, respectively, 5.34, 5.24, 5.22,
= 5.17.
= 559.06.
P P
2 = 559.06 20 (5.17)2 =
Hence Total SS = ri=1 cj=1 Xij2 rc X
559.06 534.578 = 24.482.
1. Are returns affected by the quarter of the year?
Dr James Abdey
Pr
=
The overall mean X
i=1
Pr
2
i=1 Xi
2 = 4 138.6112 534.578 = 19.867.

rc X
Dr James Abdey
LT 2014
877
2 = 5 107.036 534.578 = 0.602.

rc X
Residual SS= Total SS Brow Bcol = 24.482 19.867 0.602 = 4.013.

To test no row effect hypothesis H0 : 1 = = 5 = 0, the test statistic
is F = (c 1)Brow /Residual SS = 3 19.867/4.013 = 14.852. Under H0 ,
F Fr 1, (r 1)(c1) = F4,12 . Since F0.01, 4,12 = 5.412 < 14.852, we reject
H0 at the 1% significance level. We conclude that the return does depend
on the year significantly.
To test no column effect hypothesis H0 : 1 = = 4 = 0, the test
statistic is F = (r 1)Bcol /Residual SS = 4 0.602/4.013 = 0.600.
Under H0 , F Fc1,(r 1)(c1) = F3,12 . Since F0.1, 3,12 = 2.606 > 0.600,
we cannot reject H0 at the 10% significance level. Therefore there is no
significant evidence indicating that the return depends on the quarter.
Dr James Abdey
LT 2014
878
The results may be summarised in a two-way ANOVA table:

Source
DF
SS
MS
Year
Quarter
Error
Total
4
3
12
19
19.867
0.602
4.013
24.482
4.967
0.201
0.334
14.852
0.600
< 0.01
> 0.10
Dr James Abdey
LT 2014
879
7.6 Two-way ANOVA with Minitab
Two-way ANOVA in Minitab is almost as easy as oneway ANOVA, except the data set to be analysed needs
to be in a special format 3 columns each of length
r c:
Data column (c1): stack the original r c data
points column over column.
Block column (c2): 1, 2, . . . , r , 1, 2, . . . r , . . .

indicating the block levels of the data points in
the data column.
Treatment column (c3):
1, 1, . . . , 1, 2, 2, . . . 2, . . . , r indicating the
treatment levels of the data points in the data
column.
For the previous example, the data should be prepared
into 3 columns each of length 20. See the data file
newYorkStock.dat.
Dr James Abdey
LT 2014
c1
5.7
7.2
4.9
4.5
4.4
6.0
7.0
4.1
4.9
4.2
7.1
6.1
4.2
4.5
4.2
6.7
5.2
4.4
4.5
3.6
c2
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
c3
1
1
1
1
1
2
2
2
2
2
3
3
3
3
3
4
4
4
4
4
Two-way ANOVA with Minitab
We repeat the analysis now using Minitab.

MTB > twoway c1-c3
Two-way ANOVA: Return versus Year, Quarter
Source
Year
Quarter
Error
Total
DF
4
3
12
19
S = 0.5783
880
Year
1
2
3
4
5
Xij = + i + j + ij .
Hence we may also look at the residuals:
i = 1, . . . r , j = 1, . . . , c.
Quarter
1
2
3
4
It may also give interval estimates for each block and treatment level.
MTB > twoway c1-c3;
SUBC> means c2 c3;
SUBC> gFourpack.
LT 2014
F
14.85
0.60
P
0.000
0.627
R-Sq(adj) = 74.05%
882
Dr James Abdey
LT 2014
881
Mean
6.375
6.375
4.400
4.600
4.100
If the assumed model (structure) is correct, bij should behave like

independent N(0, 2 ). Minitab may produce diagnostic plots as used in
regression analysis.
Dr James Abdey
R-Sq = 83.61%
Note a two-way ANOVA is practical to fit a linear model:
MS
4.96675
0.20067
0.33442

SS 1/2 = (Residual MS)1/2
The pooled estimator for : S = Residual
(r 1)(c1)
Residual MS .
2 =1
R 2 = (Brow + Bcol )/ (Total SS) /(rc 1), Radj
(Total SS)/(rc1)
b
bi bj ,
bij = Xij
SS
19.867
0.602
4.013
24.482
Individual 95% CIs For Mean Based on Pooled StDev

-----+---------+---------+---------+---(------*-----)
(------*-----)
(-----*-----)
(-----*-----)
(-----*-----)
-----+---------+---------+---------+---4.0
5.0
6.0
7.0
Mean
5.34
5.24
5.22
4.88
Individual 95% CIs For Mean Based on Pooled StDev

--+---------+---------+---------+------(--------------*-------------)
(-------------*-------------)
(-------------*--------------)
(-------------*-------------)
--+---------+---------+---------+------4.40
4.80
5.20
5.60
Dr James Abdey
LT 2014
883

Residual Plots for Return
Normal Probability Plot of the Residuals
Residuals Versus the Fitted Values
99
0.5
Residual
Percent
90
50
0.0
-0.5
10
-1.0
1
-1.0
-0.5
0.0
Residual
0.5
1.0
Histogram of the Residuals
5
Fitted Value
Residuals Versus the Order of the Data
Residual
Frequency
0.5
3
2
1
0.0
-0.5
-1.0
0
-0.8 -0.6 -0.4 -0.2 0.0
Residual
0.2
0.4
0.6
Dr James Abdey
LT 2014
8 10 12 14
Observation Order
16
18
20
884

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Part II: 7. Analysis of variance (ANOVA)

Part II: Statistical inference

Analysis of variance (ANOVA)

ST102 Elementary Statistical Theory

Part II: 7. Analysis of variance

ST102 Elementary Statistical Theory

7. Analysis of variance (ANOVA)

Part II: 7. Analysis of variance

7.1 Testing for 3 means an introductory

Example: To assess the teaching quality of class teachers, a random

7.2: F tests for k Normal means with same variance

7.3: One-way ANOVA with Minitab

7.5: F tests for two-way ANOVA

ST102 Elementary Statistical Theory

Part II: 7. Analysis of variance

ST102 Elementary Statistical Theory

Part II: 7. Analysis of variance

Testing for 3 means an introductory example

Suppose examination marks from Class j follow the distribution N(j , 2 ),

Testing for 3 means an introductory example

Remark: Similar problems arise from practical situations:

j = (X1j + X2j + + X6j )/6

= (79 + 74 + 66)/3 = 73,

which is the mean value of all 18 observations.

One possible measure for the closeness is

Part II: 7. Analysis of variance

ST102 Elementary Statistical Theory

Testing for 3 means an introductory example

Part II: 7. Analysis of variance

7.2 F tests for k Normal means with same

A possible test statistic:

sum of the 3 sample variances

we reject H0 for large values of

Goal: Test the hypothesis

(against the alternative

The overall sample mean:

nj is the total number of observations.

Part II: 7. Analysis of variance

ST102 Elementary Statistical Theory

Part II: 7. Analysis of variance

F tests for k Normal means with same variance

F tests for k Normal means with same variance

i. B and W are also called, respectively,

)2 , with n 1 degrees of freedom.

ii. The decomposition follows from the identity

(ai a)2 + m(a b)2 .

(nj 1) degrees of freedom.

ST102 Elementary Statistical Theory

Part II: 7. Analysis of variance

ST102 Elementary Statistical Theory

F tests for k Normal means with same variance

Part II: 7. Analysis of variance

F tests for k Normal means with same variance

Note: Total variation = Total SS = W + B.

ST102 Elementary Statistical Theory

Part II: 7. Analysis of variance

ST102 Elementary Statistical Theory

Part II: 7. Analysis of variance

F tests for k Normal means with same variance

F tests for k Normal means with same variance

To test H0 : 1 = = k , define the test statistic

One-way ANOVA table:

Typically the ANOVA results are presented in a table below: