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Analysis Of Variance (ANOVA):

Analysis of variance is used to test for the significance of the differences between
more than two sample means. Using analysis of variance we will be making inferences
about whether our samples are drawn from populations having the same means.

Analysis of variance one way classification

Three training methods were tested. The following data gives the production
output of the 16 trainees. Daily production of 16 workers

Method (X1 − X 1)2 ( X 1 − X )2 Method (X 2 − X 2 )2 (X 2Method

− X )2 (X 3 − X 3 )2 ( X 3 − X )2
I II III
15 (-2) 2 = 4 4 22 (-1) 2 = 1 4 18 (-1) 2 = 1 0
2 2
18 (1) = 1 4 27 (6) = 36 4 24 (5) 2 = 25 0
19 (2) 2 = 4 4 18 (-3) 2 = 9 4 19 (-0) 2 = 0 0
22 (5) 2 = 25 4 21 (0) 2 = 0 4 16 (-3) 2 = 9 0
2 2
11 (-6) = 36 4 17 (-4) = 16 4 22 (3) 2 = 9 0
15 (-4) 2 = 16 0
∑X 1 ∑( X 1 − X 1 ) 2
∑X 2 ∑( X 2 − X 2 ) 2
∑X 3 ∑( X 3 − X 3 ) 2
=85 = 70 =105 = 62 =114 = 60
∑ X 3 114
X 1 = ∑ X / 5 = 85 / 5 = 17 X 2 = 105 / 5 = 21 X3 = = = 19
6 6
85 + 105 + 114 304
X = = = 19 (GrandMean )
16 16
( n X 1 + n 2 X 2 + n3 X 3 )
= 1
n1 + n 2 + n3
These three samples are drawn from the population (The population is he total
number of employees who could be trained by that method). We are testing the
effectiveness of three training methods.
Number of samples more than 2 therefore analysis of variance test is applied
(ANOVA).

H0 : X 1 = X 2 = X 3 .H 1 , H A : X 1 ≠ X 2 ≠ X 3
( n1 − 1)σ 12 + ( n 2 − 1)σ 22 + ( n3 − 1)σ 32 70 + 62 + 60 192
σ C2 (W ) = = = = 14.77
n1 + n 2 + n3 − 3 13 13
∑( X 1 − X ) 2 + ∑( X 2 − X ) 2 + ∑( X 3 − X ) 3 20 + 20 + 0 40
σ c2(bet ) = = = = 20
k −1 3 −1 2
Betweencol umn var iance Between 20
Fc = = = = 1.354
withincolu mn var iance within 14 .77
Fc = 1.354 < 3.81 = F.05 ( N r1 Dr ) = F.05 ( 2,13 ) = 3.81

H0 is accepted X 1 = X 2 = X 3 No significant difference in three methods on the

productivity of workers.
Analysis of Variance (ANOVA Table)
Marks obtained by students
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G1 ( X 1 − X 1 ) 2 ( X 1 − X ) 2 G2 (X 2 − X 2 )2 (X 2 − X ) 2 G3 ( X 3 − X 3 )2 ( X 3 − X )2
16 0 1 15 0 0 15 1 1
17 1 1 15 0 0 14 0 1
13 9 1 13 4 0 13 1 1
18 4 1 17 4 0 14 0 1
∑X 1 14 4 ∑X 2 8 0 ∑X 3 2 4
=64 =60 =56

X 1 =16 X 2 =15 X 3 = 14
X = (16+15+14)/3 = 15

Source of Variation Sum of square SS Df MS F = G/S

Between Sample SSB = 8 3–1=2 8/2 = 4
F = 4/2.67 = 1.5
Within sample SSW = 24 12 – 3 = 9 24/9 = 2.67

FC = 1.5 < 4.26 = F.05 ( N r Dr ) H0 is accepted

H0 : X 1 = X 2 = X 3 , H0 : Means are same the difference is due to sampling
HA = X 1 ≠ X 2 ≠ X 3

Two-way analysis of variance:

Number of cases of new flavors sold at Different Prices

Price A B C Mean
79 8 8 14 10
89 4 14 12 10
9 9 8 13 10
Mean X =10 7 10 13

Total Sum of square

(8 −10 ) 2 + (8 −10 ) 2 + (14 −10 ) 2 = 4 + 4 +16 = 24
( 4 +10 ) 2 + (14 +10 ) 2 + (12 +10 ) 2 = 36 +16 + 4 = 56
(9 −10 ) 2 + (8 −10 ) 2 + (13 −10 ) 2 = 1 + 4 + 9 = 14
94

SSR = 3(10 −10 ) 2 + (10 −10 ) 2 + (10 −10 ) 2 = 0 * 3 = 0

SSC = 3(7 −10 ) 2 + 3(10 −10 ) 2 + 3(13 −10 ) 2 = 3 * 9 + 0 + 3 * 9 = 18 * 3 = 54

Sources of Sum of square Degree of freedom Mean square F

variation
Between Columns 54 2 54/2=27 F=BC/Res = 27/10=2.7
Between rows 0 2 0/2 = 0
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Residential Error 40 4 40/4=10 F= 0/10 = 0

Total 94 8

FC = 2.7 ≤ 6.94 = F.05 ( 2,4), H 1 is accepted

FC = 0 ≤ 6.94 = F.05 (2,4)
Sales were not affected by flavor
Sales were not affected by price

Deviation from grand mean

-2 -2 4 0 CF = T2 /N = 0
-6 4 2 0 SST = 4+4+16+36+16+4+1+4+9=94
-1 -2 3 0 02 02 02
SSR = + + − CF = 0
3 3 3
-9 0 9 0 81 81
SSC = +0+ − 0 = 27 + 27 = 54
3 3

Analysis Of variance Two – Way Classification (Table):

In order to simplify calculation it is preferable to reduce the magnitude of the figures by

taking deviation from 30. The data after codification is

Seasons Salesmen Seasons Total

A B C D
Summer 6 6 -9 5 8
Winter -2 -1 1 2 0
Monsoon -4 -2 -1 -1 -8
Salesmen Total 0 3 -9 6 0

Correction factor CF = T2/N = 02 /12 = 0

Sum of squares between salesmen = SSC =
0 2 33 (−9) 2 6 2
+ + + − CF (0) = 0 + 3 + 27 + 12 − 0 = 42
3 3 3 3
82 02 (−8) 2
Sum of squares between seasons SSR = + + − CF (0) = 16 + 0 + 1 + −0 = 32
4 4 4
Total sum of squares SST =
(6) 2 + 6 2 + ( −9) 9 + 5 2 + ( −2) 2 + (−1) 2 +12 + 2 2 + (−4) 2 + ( −2) 2 + ( −1) 2 + ( −1) 2
= 36 + 36 + 81 + 25 + 4 +1 +1 + 4 +16 + 4 +1 +1 = 210

Analysis of Variance Table:

Source of Sum of squares SS Degree of freedom Mean square

Variation (df)
Between Columns 42 4–1=3 42/3 = 14
(Salesmen)
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Within Rows 32 3–1=2 32/2 = 16

(Seasons)

Residual (Error) 136 3*2=6 136/6 = 22.67

Total 210 12 – 1 = 11

For testing hypothesis for salesman F = Greater/Smaller = 22.67/14 = 1.62

FC = (6,3) = 1.62 < 8.94 = F.05 (6,3) H0 is accepted, there is no difference between the
average sales of salesmen.
For testing hypothesis for seasons F = 22.67/16 = 1.42
FC (6,2) = 1.42 < 19.33 = F.05 (6,2), hence H0 is accepted, there is no significance
difference in average sales of different seasons.

Analysis of variance Two-way classification:

In such a classification data are classified according to two criteria (factors). The analysis
of variance table for two-way classification is as shown below.
ANOVA FOR TWO WAY CLASSIFICATION (TWO WAY ANALYSIS OF
VARIANCE)

Sources of variation Sum of squares (SS) Degree of freedom (df) Mean square (MS)
Between Columns SSC (c – 1) MSC = SSC/(C-1)
Within rows SSR (r – 1) MSR = SSR/r – 1
Residual (Error) SSE (c – 1) (r – 1) MSE = SSE/(c –1)(r – 1)
Total SST cr – 1

Example: A company has appointed four salesmen A, B, C and D, and observed their
sales in three seasons summer, winter, and monsoon. The data is in (Rs- Lakh). Perform
analysis of variance at 5% level of significance

Seasons Salesman Seasons

A B C D Total
Summer 36 36 21 35 128
Winter 28 29 31 22 120
Monsoon 26 28 29 29 112
Salesmen 90 93 81 96 360
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Total

Deviation is taken from 260/12 = 30

Solution: Hypothesis in respect of seasons H0 : There is no difference in mean sales in

the three seasons.
µ1 = µ 2 = µ3
H1 : There is a difference in mean sales in three seasons µ1 ≠ µ 2 ≠ µ 3

Hypothesis in respect of salesmen

H0 : There is no difference in mean sales of four salesmen
µ A = µ B = µC = µ D

H1 : There is a difference in mean sales of four salesmen

µ A ≠ µ B ≠ µC ≠ µ D

Degree of freedom for rows = r – 1 = 3 – 1 = 2

Degree of freedom for columns = c – 1 = 4 – 1 = 3
Degree of freedom for error Residual) = (r – 1) (c – 1) = 2 * 3 = 6
Degree of freedom for total = rc – 1 = 3 * 4 – 1 = 11.