Page 271 - DMGT404 RESEARCH_METHODOLOGY

Unit 12: Hypothesis Testing

Self Assessment Notes
Fill in the blanks:
9. A chi-square test is used when sample observations should be ………………

10. For applying chi-square test , sample should contain at least ……… observations

12.5 ANOVA

ANOVA is a statistical technique. It is used to test the equality of three or more sample means.
Based on the means, inference is drawn whether samples belongs to same population or not.

Notes Conditions for using ANOVA

1. Data should be quantitative in nature.
2. Data normally distributed.
3. Samples drawn from a population follow random variation.

ANOVA can be discussed in two parts:
1. One-way classification
2. Two and three-way classification.

12.5.1 One-way ANOVA

Following are the steps followed in ANOVA:
1. Calculate the variance between samples.
2. Calculate the variance within samples.
3. Calculate F ratio using the formula.
F = Variance between the samples/Variance within the sample
4. Compare the value of F obtained above in (3) with the critical value of F such as 5% level
of significance for the applicable degree of freedom.
5. When the calculated value of F is less than the table value of F, the difference in sample
means is not significant and a null hypothesis is accepted. On the other hand, when the
calculated value of F is more than the critical value of F, the difference in sample means is
considered as significant and the null hypothesis is rejected.

Example: ANOVA is useful.
1. To compare the mileage achieved by different brands of automotive fuel.
2. Compare the first year earnings of graduates of half a dozen top business schools.

Application in Market Research

Consider the following pricing experiment. Three prices are considered for a new toffee box
introduced by Nutrine company. Price of three varieties of toffee boxes are 39, 44 and
49. The idea is to determine the influence of price levels on sales. Five supermarkets are
selected to exhibit these toffee boxes. The sales are as follows:

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