Statistics for Managers using

Microsoft Excel
6th Edition
Module 6
Analysis of Variance

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-1

Learning Objectives
In this chapter, you learn:

The basic concepts of experimental design

How to use one-way analysis of variance to test for differences

among the means of several populations (also referred to as
groups in this chapter)

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-2

Chapter Overview

DCOVA

Analysis of Variance (ANOVA)

One-Way
ANOVA
F-test
TukeyKramer
Multiple
Comparisons
Levene Test
For
Homogeneity
of Variance

Randomized
Block Design
(On Line Topic)
Tukey Multiple
Comparisons

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Two-Way
ANOVA
Interaction
Effects
Tukey Multiple
Comparisons

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General ANOVA Setting

DCOVA

Investigator controls one or more factors of interest

Different levels produce different groups
Think of each group as a sample from a different
population
Observe effects on the dependent variable
Are the groups the same?

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11-4

One-Way Analysis of Variance

DCOVA

Evaluate the difference among the means of three

or more groups
Examples: Accident rates for 1st, 2nd, and 3rd shift
Expected mileage for five brands of tires

Assumptions
Populations are normally distributed
Populations have equal variances
Samples are randomly and independently drawn

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11-5

Hypotheses of One-Way ANOVA

DCOVA

H0 : 1 2 3 c

All population means are equal

i.e., no factor effect (no variation in means among

groups)

H1 : Not all of the population means are the same

At least one population mean is different

i.e., there is a factor effect

Does not mean that all population means are

different (some pairs may be the same)

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-6

One-Way ANOVA

DCOVA

H0 : 1 2 3 c
H1 : Not all j are the same
The Null Hypothesis is True
All Means are the same:
(No Factor Effect)

1 2 3
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11-7

One-Way ANOVA
H0 : 1 2 3 c

DCOVA
(continued)

H1 : Not all j are the same

The Null Hypothesis is NOT true
At least one of the means is different
(Factor Effect is present)
or

1 2 3
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1 2 3
11-8

Partitioning the Variation

DCOVA

Total variation can be split into two parts:

SST = SSA + SSW

SST = Total Sum of Squares
(Total variation)
SSA = Sum of Squares Among Groups
(Among-group variation)
SSW = Sum of Squares Within Groups
(Within-group variation)
Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-9

Partitioning the Variation

(continued)

SST = SSA + SSW

DCOVA

Total Variation = the aggregate variation of the individual

data values across the various factor levels (SST)
Among-Group Variation = variation among the factor
sample means (SSA)
Within-Group Variation = variation that exists among
the data values within a particular factor level (SSW)

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-10

Partition of Total Variation

DCOVA

Total Variation (SST)

Variation Due to
Factor (SSA)

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Variation Due to Random

Error (SSW)

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Total Sum of Squares

DCOVA

SST = SSA + SSW

c

nj

SST ( Xij X)
Where:

j1 i 1

SST = Total sum of squares

c = number of groups or levels
nj = number of observations in group j
Xij = ith observation from group j
X = grand mean (mean of all data values)
Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-12

Total Variation

DCOVA
(continued)

SST ( X 11 X ) ( X 12 X ) ( X cn X )

R esponse, X

X
G ro u p 1

G ro u p 2

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G ro u p 3
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Among-Group Variation

DCOVA

SST = SSA + SSW

c

SSA n j ( X j X)2
Where:

j1

SSA = Sum of squares among groups

c = number of groups
nj = sample size from group j
Xj = sample mean from group j
X = grand mean (mean of all data values)
Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-14

Among-Group Variation
(continued)
c

SSA n j ( X j X)2

DCOVA

j 1

Variation Due to
Differences Among Groups

SSA
MSA
c 1
Mean Square Among =
SSA/degrees of freedom

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11-15

Among-Group Variation

DCOVA
(continued)

SSA n 1 (X1 X) n 2 (X 2 X) n c (X c X)
2

R esponse, X

X3
X1
G ro u p 1

G ro u p 2

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X2

G ro u p 3
11-16

Within-Group Variation

DCOVA

SST = SSA + SSW

c

SSW
Where:

j 1

nj

i 1

( X ij X j )

SSW = Sum of squares within groups

c = number of groups
nj = sample size from group j
Xj = sample mean from group j
Xij = ith observation in group j
Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-17

Within-Group Variation
(continued)
c

SSW
j 1

nj

i 1

DCOVA

( X ij X j ) 2

Summing the variation

within each group and then
adding over all groups

SSW
MSW
nc
Mean Square Within =
SSW/degrees of freedom

j
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11-18

Within-Group Variation

DCOVA
(continued)

SSW (X11 X1 ) (X12 X 2 ) (X cn c X c )

2

R esponse, X

X1
G ro u p 1

G ro u p 2

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

X2

X3

G ro u p 3
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Obtaining the Mean Squares

DCOVA
The Mean Squares are obtained by dividing the various
sum of squares by their associated degrees of freedom

SSA
MSA
c 1

Mean Square Among

(d.f. = c-1)

SSW
MSW
nc

Mean Square Within

(d.f. = n-c)

SST
MST
n 1

Mean Square Total

(d.f. = n-1)

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-20

One-Way ANOVA Table

Source of
Variation

Degrees of
Freedom

Sum Of
Squares

Among
Groups

c-1

Within
Groups

n-c

SSW

Total

n1

SST

SSA

DCOVA

Mean Square
(Variance)

SSA
MSA =
c-1
SSW
MSW =
n-c

FSTAT =
MSA
MSW

c = number of groups
n = sum of the sample sizes from all groups
df = degrees of freedom
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11-21

One-Way ANOVA
F Test Statistic

DCOVA

H0: 1= 2 = = c
H1: At least two population means are different

Test statistic

MSA
FSTAT
MSW

MSA is mean squares among groups

MSW is mean squares within groups

Degrees of freedom

df1 = c 1

(c = number of groups)

df2 = n c

(n = sum of sample sizes from all populations)

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-22

Interpreting One-Way ANOVA

F Statistic
DCOVA

The F statistic is the ratio of the among

estimate of variance and the within estimate
of variance

The ratio must always be positive

df1 = c -1 will typically be small
df2 = n - c will typically be large

Decision Rule:
Reject H if F
0
STAT > F,
otherwise do not reject
H0

Do not
reject H0

Reject H0

F
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11-23

One-Way ANOVA
F Test Example
You want to see if three
different golf clubs yield
different distances. You
randomly select five
measurements from trials on
an automated driving
machine for each club. At the
0.05 significance level, is
there a difference in mean
distance?

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

Club 1
254
263
241
237
251

Club 2
234
218
235
227
216

DCOVA
Club 3
200
222
197
206
204

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One-Way ANOVA Example:

Scatter Plot
DCOVA
Club 1
254
263
241
237
251

Club 2
234
218
235
227
216

Club 3
200
222
197
206
204

Distance
270
260
250
240
230

220

x1 249.2 x 2 226.0 x 3 205.8

x 227.0

210

X2

200

X
X3

190
1

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X1

2
Club

3
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One-Way ANOVA Example

Computations
DCOVA
Club 1
254
263
241
237
251

Club 2
234
218
235
227
216

Club 3
200
222
197
206
204

X1 = 249.2

n1 = 5

X2 = 226.0

n2 = 5

X3 = 205.8

n3 = 5

X = 227.0

n = 15

c=3
SSA = 5 (249.2 227)2 + 5 (226 227)2 + 5 (205.8 227)2 = 4716.4
SSW = (254 249.2)2 + (263 249.2)2 ++ (204 205.8)2 = 1119.6

MSA = 4716.4 / (3-1) = 2358.2

MSW = 1119.6 / (15-3) = 93.3
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2358.2
FSTAT
25.275
93.3
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One-Way ANOVA Example

Solution
DCOVA
Test Statistic:

H0: 1 = 2 = 3
H1: j not all equal

MSA 2358.2
FSTAT

25.275
MSW
93.3

= 0.05
df1= 2
df2 = 12
Critical
Value:

Decision:
Reject H0 at = 0.05

F = 3.89

Conclusion:
There is evidence that
at least one j differs
Reject H
F = 3.89
FSTAT = 25.275 from the rest
= .05

Do not
reject H0

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-27

One-Way ANOVA
Excel Output

DCOVA

SUMMARY
Groups

Count

Sum

Average

Variance

Club 1

1246

249.2

108.2

Club 2

1130

226

77.5

Club 3

1029

205.8

94.2

ANOVA
Source of
Variation

SS

df

MS

Between
Groups

4716.4

2358.2

Within
Groups

1119.6

12

93.3

Total

5836.0

14

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

F
25.275

P-value
4.99E-05

F crit
3.89

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ANOVA Assumptions

Randomness and Independence

Select random samples from the c groups (or

randomly assign the levels)

Normality

DCOVA

The sample values for each group are from a normal

population

Homogeneity of Variance

All populations sampled from have the same

variance
Can be tested with Levenes Test

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-29

ANOVA Assumptions
Levenes Test

DCOVA

Tests the assumption that the variances of each

population are equal.
First, define the null and alternative hypotheses:

H0: 21 = 22 = =2c

H1: Not all 2j are equal

Second, compute the absolute value of the difference

between each value and the median of each group.
Third, perform a one-way ANOVA on these absolute
differences.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall

11-30

Levene Homogeneity Of Variance

Test Example

DCOVA

H0: 21 = 22 = 23
H1: Not all 2j are equal
Calculate Medians
Club 1

Club 2

Calculate Absolute Differences

Club 3

Club 1

Club 2

Club 3

237

216

197

14

11

241

218

200

10

251

227

204 Median

254

234

206

263

235

222

12

18

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11-31

Levene Homogeneity Of Variance

Test Example
(continued)
DCOVA

Anova: Single Factor

SUMMARY
Groups

Count

Sum Average Variance

Club 1

39

7.8

36.2

Club 2

35

17.5

Club 3

31

6.2

50.2

Pvalue

Source of Variation
Between Groups
Within Groups

Total

SS

df

6.4

415.6

12

422

14

MS

3.2 0.092
34.6

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F crit

0.912 3.885

Since the
p-value is
greater
than 0.05
there is
insufficient
evidence
of a
difference
in the
variances
11-32

Chapter Summary

Described one-way analysis of variance

The logic of ANOVA

ANOVA assumptions

F test for difference in c means

The Levene test for homogeneity of variance

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11-33