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INTEGRATED LEARNING
CENTER
ILC 120

BNAD 276: Statistical Inference in Management

Spring 2016

Welcome

Green sheets

Schedule of readings
Before our next exam (April 7th)
OpenStax Chapters 1 12
Plous (2, 3, & 4)
Chapter 2: Cognitive Dissonance
Chapter 3: Memory and Hindsight Bias
Chapter 4: Context Dependence

By the end of lecture today 3/24/16

Analysis of Variance (ANOVA)
Constructing brief, complete summary statements

Remember, you should know these two formulas by heart

SS = Sum of Squares
Sample
Standard =
Deviation

s=
SS= =degrees
Sum ofofSquares
df
freedom

Sample
Variance

We are looking to
compare two means

Study Type 2: t-test

Study Type 3: One-way Analysis of Variance (ANOVA)
Comparing more than
two means

Main effect of incentive: Will offering an incentive result in more

girl scout cookies being sold?
If we have a effect of
incentive then the means
are significantly different
from each other
we reject the null
we have a significant F
p < 0.05
We dont know which means are
different from which . just
that they are not all the same

To get an effect we want:

Large F
- big effect and small variability

Small p
- less than 0.05 (whatever our alpha
is)

One way analysis of variance

Variance is divided
Remember,
one-way = one IV

Total
variability
Between
group
variability
(only one factor)
Remember,
1 factor = 1 independent variable
(this will be our numerator
like difference between
means)

Within
group
variability
(error variance)

Remember,
error variance = random error
(this will be our
denominator
like within group

Five steps to hypothesis testing

Step 1: Identify the research problem (hypothesis)
Describe the null and alternative hypotheses
Step 2: Decision rule
Alpha level? ( = .05 or .01)?
Still, difference
Critical statistic (e.g. z or t or F or r) value?
between means
Step 3: Calculations

F=

MSBetween

MSWithin

Step 4: Make decision whether or not to reject null

hypothesis
Still,
variability
If observed t (or F) is bigger then critical t (or F)
of then
curve(s)
reject null
Step 5: Conclusion - tie findings back in to research problem

Between
Groups
Difference
Variability
between
means

Within
Groups
Variability
Variability
of
curve(s)

Sum of squares (SS):

The sum of squared deviations of some set of scores about their mean
Mean squares (MS):
The sum of squares divided by its degrees of freedom

Mean square between groups:

sum of squares between groups
divided by its degrees of freedom

Mean square total: sum of squares total

divided by its degrees of freedom

Mean square within groups:

sum of squares within groups
divided by its degrees of freedom

F=

MSBetween
MSWithin

ANOVA

F=

Variability between groups

Variability within groups

Variability Between Groups

Between variability bigger

than within variability so
should get a big (significant) F
Variability Within Groups
Variability Between Groups

Between variability getting

smaller within variability
staying same so, should get a
smaller F
Variability Within Groups

Variability Between Groups

Between variability getting

very small within variability
staying same so, should get a
very small F
Variability Within Groups

ANOVA

F=

Variability between groups

Variability within groups

Variability Between Groups

Between variability bigger

than within variability so
should get a big (significant) F

Variability Within Groups

Variability Between Groups

Between variability getting

smaller within variability
staying same so, should get a
smaller F

Variability Within Groups

Between variability getting

very small within variability
staying same so, should get a
very small F (equal to 1)

Homework

Homework

Homework

Homework

Type of major in school

4 (accounting, finance, hr, marke
Grade Point Average
0.05
2.83
3.02
3.24
3.37

If observed
F is bigger
than than
critical
F: F:
If observed
F is bigger
critical
Reject Reject
null & Significant!
null & Significant!

Homework

If p value is less than 0.05:

Reject null & Significant!

4-1=3
# groups - 1
# scores - number of groups
28 - 4=24
# scores - 1
28 - 1=27

0.3937
0.1119
0.3937 / 0.1119 = 3.517
3.517
3.009
3
24
0.03

Yes

Homework

= 3.517;
p < 0.05
F (3, 24)

The GPA for four majors was compared. The

average GPA was 2.83 for accounting, 3.02
for finance, 3.24 for HR, and 3.37 for
marketing. An ANOVA was conducted and
there is a significant difference in GPA for
these four groups (F(3,24) = 3.52; p < 0.05).

Number of
observations in
each group

Average for each group

(We REALLY care about
this one)

SS = Sum of Squares
- will be given for exams

Number of groups
minus one
(k 1) 4-1=3

Number of people
minus number of groups
(n k) 28-4=24

SS

between

df between

SS

within

df within

MS between
MS within

Type of executive
3 (banking, retail, insurance)
Hours spent at computer
0.05
10.8
8
8.4

If observed
F is bigger
than critical
F: F:
If observed
F is bigger
than critical
Reject null
& Significant!
Reject
null & Significant!

If p value is less than 0.05:

Reject null & Significant!

11.46
2
11.46 / 2 = 5.733
5.733
3.88
2
12
0.0179

Yes
p < 0.05
F (2, 12)
= 5.73;
The number of hours spent at the computer was
compared for three types of executives. The
average hours spent was 10.8 for banking
executives, 8 for retail executives, and 8.4 for
insurance executives. An ANOVA was conducted
and we found a significant difference in the
average number of hours spent at the computer for
these three groups , (F(2,12) = 5.73; p < 0.05).

Number of
observations
in each group

Average for each

group
Just add up all
scores

SS = Sum of Squares
- will be given for exams

Number of groups minus one

(k 1) 3-1=2

Number of people
minus number of groups
(n k) 15-3=12

SS

MS between

between

MS within

df between

SS

within

df within

QUESTIONS?

Writing Assignment - Quiz

1. When do you use a t-test and when do you use an ANOVA
2. What is the formula for degrees of freedom in a two-sample t-test
3. What is the formula for degrees of freedom between groups in ANOVA
4. What is the formula for degrees of freedom within groups in ANOVA
5. How are levels, groups, conditions treatments related?
6. How are significant difference, p< 0.05, main effect
and we reject the null related?
7. Draw and match each with proper label
ability
i
r
a
V
l
Tota

roup
G
n
e
e
Betw
l it y
Variabi

roup
G
n
i
h
t
Wi
ility
Variab

Writing Assignment - Quiz

8. Daphne compared running speed for three types of running
shoes. She asked 10 people to run as fast as they could
wearing one type of shoe. So, there were 30 people altogether
What is the independent variable?
What is the dependent variable?
How many factors do we have (what are they)?
How many treatments do we have (what are they)?
9. Complete this ANOVA table

10. Find the critical F value from the table

11. Is there a main effect of type of running shoe?
Is p< 0.05?

Writing Assignment - Quiz

group
r
e
p
1
nor
1. When do you use a t-test and when do you use an ANOVA
or n-2
roups
g
f
o
al n - #
o
t
T
ans
medegrees
2. What is the formula
for
of freedom in a two-sample t-test
o
w
t
e
r
a
p
e
mor
s com
t-test A compares
V
3. What
formula
eansfor degrees of freedom between groups in ANOVA
m
ANOis the
o
w
than t
ps - 1
u
o
r
g
of
4. What is the formula for degrees of#freedom
within groups in ANOVA
roup
g
r
e
p
5. How are levels, groups, conditions treatments related? n -1 or
roups
g
f
o
#
an
al n l memain
t
l
6. How are significant difference, p<
0.05,
effect
o
a
T
y
e
Th
hing
t
e
m
and we reject the null related?
a
the s
l mean
l
a
y
e
7. Draw and
Th matchteach
ing with proper label
h
e
m
the sa
oup
r
G
p
u
n
o
i
y
r
t
W it h
ariabili
ween G
t
V
e
l
B
a
t
o
iability
T
y
r
t
i
a
l
i
V
b
a
i
Var

Writing Assignment - Quiz

8. Daphne compared running speed for three types of running
of
ype as
shoes. She asked 10 people to run as Tfast
they could
g
n
i
runn 30 people altogether
wearing
ng type of shoe. So, there were
ione
n
n
u
R
shoe
d
What
e
is
the
independent
variable?
e
Sp
What is the dependent variable?
Type 1
How many factors do we have (what are they)?
Type 2
3
Type 3
s
actHow
p
many
treatments
do
we
have
(what
are
they)?
or
grou

1F

9. Complete this ANOVA table

# groups - 1

SSB
dfB

n - # groups

n-1
Yes
10. Find
the critical
value from the table
F(2,27)=4.00;
p< F
0.05

SSW
dfW
3.37

11. Is there a main effect of type of running shoe?

Is p< 0.05?

MSB
MSW

Lets try one

In a one-way ANOVA we have three types of variability.
Which picture best depicts the random error variability
(also known as the within variability)?
a. Figure 1
b. Figure 2
1.
c. Figure 3
correct
d. All of the above
2.

3.

Lets try one

In a one-way ANOVA we have three types of variability.
Which picture best depicts the between group variability?
a. Figure 1
b. Figure 2 correct
c. Figure 3
1.
d. All of the above

2.

3.

Lets try one

F=

Variability between groups

Variability within groups

F ratio is referring
Which figure would depict the largest F ratio to "observed F

a.
b.
c.
d.

Figure 1
Figure 2 correct
Figure 3
All of the above

1.

2.

3.

Lets try one

Winnie found an observed F ratio of .9, what should she
conclude?
a. Reject the null hypothesis
b. Do not reject the null hypothesis
correct
c. Not enough info is given
1.

2.

3.

If your observed z is within

one standard deviation of the mean,
you will never reject the null

Lets try one

Winnie found an observed z of .74, what should she conclude?

(Hint: notice that .74 is less than 1)
a. Reject the null hypothesis
b. Do not reject the null hypothesis
correct
c. Not enough info is given

small observed
z score

small observed
z score

Lets try one

Winnie found an observed t of .04, what should she conclude?
(Hint: notice that .04 is less than 1)
a. Reject the null hypothesis
b. Do not reject the null hypothesis
correct
c. Not enough info is given

x
small observed t
score

Lets try one

How many
observations within
each group?

An ANOVA was conducted comparing different types of solar

cells and there appears to be a significant difference in output
of each (watts) F(4, 25) = 3.12; p < 0.05. In this study there
were __ types of solar cells and __ total observations in the
whole study?
a. 4; 25
F(4, 25) = 3.12; p < 0.05
b. 5; 30
c. 4; 30
correct
d. 5; 25

# groups - 1
# scores - # of groups
# scores - 1

Lets try one

An ANOVA was conducted comparing different types of solar
cells and there appears to be significant difference in output of
each (watts) F(4, 25) = 3.12; p < 0.05. In this study ___
a. we rejected the null hypothesis
correct
b. we did not reject the null hypothesis

F(4, 25) = 3.12; p < 0.05

Observed F
bigger than
Critical F

p < .05

Lets try one

An ANOVA was conducted comparing different types of solar
cells. The analysis was completed using an alpha of 0.05. But
Julia now wants to know if she can reject the null with an alpha
of at 0.01. In this study ___
a. we rejected the null hypothesis
b. we did not reject the null hypothesis
correct

F(4, 25) = 3.12; p < 0.05

Comparison of the Observed F and Critical F

Is no longer are helpful because
the critical F is no longer correct.
We must use the p value

p < .05
p > .01

Lets try one

An ANOVA was conducted comparing home prices in four
neighborhoods (Southpark, Northpark, Westpark, Eastpark) .
For each neighborhood we measured the price of four homes.
Please complete this ANOVA table. Degrees of freedom
between is _____; degrees of freedom within is ____
a. 16; 4
b. 4; 16
c. 12; 3
d. 3; 12
correct

Lets try one

An ANOVA was conducted comparing home prices in four
neighborhoods (Southpark, Northpark, Westpark, Eastpark) .
For each neighborhood we measured the price of four homes.
Please complete this ANOVA table. Mean Square between is
_____; Mean Square within is ____
a. 300, 300
b. 100, 100
c. 100, 25
d. 25, 100 correct

Lets try one

An ANOVA was conducted comparing home prices in four
neighborhoods (Southpark, Northpark, Westpark, Eastpark) .
For each neighborhood we measured the price of four homes.
Please complete this ANOVA table. The F ratio is:
a. .25
b. 1
c. 4
correct
d. 25

Lets try one

An ANOVA was conducted comparing home prices in four
neighborhoods (Southpark, Northpark, Westpark, Eastpark) .
For each neighborhood we measured the price of four homes.
Please complete this ANOVA table, alpha = 0.05. We should:
a. reject the null hypothesis
correct
b. not reject the null hypothesis

Observed F
bigger than
Critical F

p < .05

Thank you!
See you next time!!