Analysis of Variance

Dr. Muhamed Wael Farouq

Statistics and Mathematics Department

Course: Applied Research Methodology

MBA - University of Ain Shams
1
 The F-distribution

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 2
Course: Applied Research Methodology
The F-distribution
The probability distribution used in this chapter is the F-distribution. It was
named to honor Sir Ronald Fisher.

The characteristics of the F-distribution:

1- The F-distribution has two parameters
degrees of freedom in the numerator
degrees of freedom in the denominator

df numerator df numerator = n1-1

F
df denominator df denominator = n2-1

The shape of the distribution changes as the degrees of freedom changes.

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 3
Course: Applied Research Methodology
The F-distribution
2- The F-distribution is continuous :
meaning the graph has no holes, breaks or gaps

3- The F-distribution can not be negative.

4- The F-distribution is positively skewed :

the long tail of the distribution is to the right.

5- The F-distribution is asymptotic :

as the values of F increases, the distribution approaches the
horizontal axis but never touches it.

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 4
Course: Applied Research Methodology
The F-distribution

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 5
Course: Applied Research Methodology
The F-distribution

6
The F-distribution
The F-distribution
is used in

Test of hypothesis of Analysis of Variance

two population (Anova)
variances
The comparison of
 2
1  2
2
several population
means
1  2  3

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 7
Course: Applied Research Methodology
 Testing the hypothesis for two
population variances

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 8
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Step1. State the null hypothesis and the alternative hypothesis.
Case 1 Case 2 Case 3

H 0 :12 =  22 H 0 :12   22 H 0 :12   22

H1 :12   22 H1 :12   22 H1 :12   22

Note that the equal sign has to be always in the null hypothesis.

Step 2. State the significance level (  ).

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 9
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Step 3. Compute the test statistic (sample statistic).
In this case, it is called the Fcalculated

2 Sample variance for first sample

s
= 1 (larger variance)
Fcalculated 2
s 2
Sample variance for second sample
(smaller variance)

 ( x − x)
2

s 2
= If x is integer
n −1


2
x 2
− nx If x is decimal
s 2
=
n −1
Dr. Muhamed Wael Farouq
MBA - University of Ain Shams 10
Course: Applied Research Methodology
 Testing the hypothesis of two population variances
Step 4. Formulate the decision.
Case 1 Case 2
If the alternative hypothesis has If the alternative hypothesis has
< or > then the test is one-tail test.  then the test is two-tail test.


 2

acceptance rejection acceptance rejection

region region region region

Ftabulated = F n1 −1
n2 −1 ( ) Ftabulated = Fnn21−−11  ( 2 )
Dr. Muhamed Wael Farouq
MBA - University of Ain Shams 11
Course: Applied Research Methodology
Testing the hypothesis of two population variances

n1 −1
Ftabulated = F n2 −1
You will get this value
from a given table

Step 5. Take the decision

Fcalculated  Ftabulated Fcalculated  Ftabulated

Accept H 0 Reject H 0

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 12
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Exercise
A media researcher conducted a study of the ipod listening habits of men
and women. One fact of the study involved the mean listening time. It was
discovered that the mean listening time for men was 35 minutes per day;
the standard deviation of the sample of 10 men studied was 10 minutes
per day. The mean listening time for 12 women studied was also 35
minutes per day but the standard deviation of the sample was 12 minutes.
At the 0.10 significance level, can we conclude that there is a difference in
the variation in the listen time for men and women?

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 13
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Solution
Since the women has the larger variance so they are population 1. Since
the men has the smaller variance so they are population 2.

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 14
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Solution

Step1. State the null hypothesis and the alternative hypothesis.

H 0 :  12 =  22 H0 : women
2
=  men
2

H1 :  12   22 H1 : women
2
  men
2

Step 2. State the significance level (  ).

 = 0.10

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 15
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Step 3. Compute the test statistic (sample statistic).
s12 l arg er var
Fcalculated = 2 =
s 2 smaller var
2
swomen (12)2
Fcalculated = 2 = 2
= 1.44
smen (10)
Step 4. Formulate the decision.
Since H1 has the (  ), then test is a two-tail test, then

n1 −1  
Ftabulated = F n2 −1  
2
 0.10 
Ftabulated =F 
9
11
 = 3.10
 2 
Dr. Muhamed Wael Farouq
MBA - University of Ain Shams 16
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Step 5. Take the decision

Fcalculated = 1.44
Ftabulated = 3.10

Since Fcalculated  Ftabulated acceptance rejection

region region
then accept H0 Ftabulated = 3.10

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 17
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Exercise

A stockbroker at critical securities reported that the mean rate of return on

a sample of 10 oil stocks was 12.6% with a standard deviation of 3.9%.
The mean rate of return on a sample of 8 utility stocks was 10.9% with a
standard deviation of 3.5%. At the 0.05 significance level, can we conclude
that there is more variation in the oil stocks?

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 18
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Solution
Since the oil stock has the larger variance so it is population 1. Since the
utility stock has the smaller variance so it is population 2.

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 19
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Solution

Step1. State the null hypothesis and the alternative hypothesis.

H0 :  2
oil stock  2
utility stock H0 : 12   22

H1 :  oil
2
stock   2
utility stock H1 : 12   22

Step 2. State the significance level (  ).

 = 0.05

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 20
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Step 3. Compute the test statistic (sample statistic).
s12 l arg er var
Fcalculated = 2 =
s 2 smaller var
2
s oil (3.9)2
Fcalculated = = = 1.24
stock
2 2
sutility stock (3.5)
Step 4. Formulate the decision.
Since H1 has the (  ) , then the test is a one-tail test, then

Ftabulated = F n1 −1
n 2 −1 ( )
Ftabulated = F79 ( 0.05) = 3.68

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 21
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Step 5. Take the decision

Fcalculated = 1.24
Ftabulated = 3.68

Since Fcalculated  Ftabulated acceptance rejection

region region
then accept H0 Ftabulated = 3.68

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 22
Course: Applied Research Methodology
Testing the hypothesis of two population variances
Exercise
The government has established a new road (route) from downtown to the
airport beside the already established old road. The government wants to
study the time it takes to drive to the airport using each road. The
government collected the following sample data which is reported in
minutes. Using the 0.10 significance level, the government wants to check
that the new road reduces the variability of time.

Dr. Muhamed Wael Farouq

MBA - University of Ain Shams 23
Course: Applied Research Methodology