Topic 3: ANOVA, Regression, and Forecasting

Module 3.1: Analysis of Variance (ANOVA)

Lecture 3.1.3: Two-Factor ANOVA via Excel
In one-way ANOVA, we had multiple observations within in each treatment group,
but the observations were assumed to come from repeated independent sampling from
the groups parent population. In two-way ANOVA we do not assume that the same
kind of independence. Rather, we assume two kinds of treatment effects one for
the columns, as before, and one for the rows. For example, if we were considering a
pollution abatement situation, then the column treatments might be the factories and
the row treatments might be the types of pollution control devices.
The two-way ANOVA is based on the same logic we employed for one-way
ANOVA. Note, however, that now we get two F ratios, one for columns and one for
rows.
As before, our example data are as follows:

Second
Treatment
(5 levels)

First Treatment (3 levels)

1
2
3
18
14
16
56
59
53
46
48
50
100
90
95
28
31
25

1
2
3
4
5

The Excel solution is as follows:

Note two things. First, up to reversing the location of rows and columns Excel
Anova: Two-Factor Without Replication
SUMMARY
Row 1
Row 2
Row 3
Row 4
Row 5
Column 1
Column 2
Column 3

Count

Sum
3
3
3
3
3

73
48
89
83
56

5
5
5

112
160
77

ANOVA
SS
Source of Variati
Rows
406.266667
Columns
694.533333
Error
258.133333
Total

1358.93333

df

Average
Variance
24.3333333142.333333
16
19
29.6666667120.333333
27.6666667145.333333
18.666666749.3333333
22.4
32
15.4

94.3
64.5
7.3

MS
F
P-value
F crit
4 101.5666673.14772727 0.07851683.8378544
2 347.26666710.76239670.005390294.4589683
8 32.2666667
14

generates the same results. Second, you want the Two-Factor Without Replication
version of the two-factor ANOVA tools. The Two-Factor With Replication Excel
tool is used if you are also analyzing interactions between the row and column
factors.
Note that we would reject the null hypothesis for rows (since the P-value is less than
.05), but we would not reject the null hypothesis for columns (since the P-value is
greater than .05). Thus, we are concluding that the row factors make a difference
whereas the column factors do not. Returning to the pollution abatement example,
we would conclude that the types of pollution control devices do matter and that the
factories do not matter. As before, it would now require further analysis, via pairwise tests, to determine which of the row factors is best, which is worst.
It is commonplace to claim that two-way ANOVA tests two hypotheses that there
are no differences among columns and no differences among rows. Technically, twoway ANOVA is testing the hypothesis that all of the column samples come from the
same conditional probability distribution (conditioned on the rows), and that all of the
row samples come form the same conditional probability distribution (conditioned on
the columns). Remember that you are testing two (conditional) hypotheses.
PROBLEM:
Redo Ch. 4, #27 as a two-factor ANOVA to determine if the mean number of hours of tv
viewing is the same for all weeks and all age groups.