Page 270 - DMGT404 RESEARCH_METHODOLOGY

Research Methodology

Notes It is used in the following circumstances:
1. Sample observations should be independent i.e. two individual items should be included
twice in a sample.

2. The sample should contain at least 50 observations
or
total frequency should be greater than 50.
3. There should be a minimum of five observations in any cell. This is called cell frequency
constraint.
For instance: Chi-square

Age Group Total
Persons
Under 20-40 20-40 41-50 51 & Over
Liked the car 146 78 48 28 300
Disliked the car 54 52 32 62 200
Total 200 130 80 90 500

Is there any significant difference between the age group and preference for the car?

Example: A company marketing tea claims that 70% of population in a metro drinks a
particular brand (Wood Smoke) of tea. A competing brand challenged this claim. They took a
random sample of 200 families to gather data. During the study period, it was found that 130
families were using this brand of tea. Will it be correct on the part of competitor to conclude that
the claim made by the company does not holds good at 5% level of significance?
Solution:
Hypothesis H – People who drink Wood Smoke brand is 70%.
0
H – People who drink Wood Smoke brand is not 70%.
0
If the hypothesis is true then number of consumers who drink this particular brand is 200 × 0.7
= 140.
Those who do not drink that brand are 200 × 0.3 = 60
Degree of freedom = D = 2 – 1 = 1, since there are two groups.

Group Observed Expected O-E (O-E) (O-E) /E
2
2
(O) (E)
Those who drink branded tea 130 140 -10 100 0.714
Those who did not drink 70 60 +10 100 1.667
branded tea
200 200 0

(0 E- )
 = = 2.381
2
E
A 0.5 level of significance of for 1 d.f. is equal to 3.841 (From tables). The calculated value is 2.381
is lower. Therefore, we accept the hypothesis that 70% of the people in that metro drink Wood
Smoke branded tea.

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