Statistics for Managers Using Microsoft Excel
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1 Statistics for Managers Using Microsoft Excel 7 th Edition Chapter 1 Chi-Square Tests and Nonparametric Tests Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-1
2 Learning Objectives In this chapter, you learn: How and when to use the chi-square test for contingency tables How to use the Marascuilo procedure for determining pairwise differences when evaluating more than two proportions How and when to use nonparametric tests Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-
3 Contingency Tables Contingency Tables Useful in situations comparing multiple population proportions Used to classify sample observations according to two or more characteristics Also called a cross-classification table. Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-3
4 Contingency Table Example Left-Handed vs. Gender Dominant Hand: Left vs. Right Gender: Male vs. Female categories for each variable, so this is called a x table Suppose we examine a sample of 300 children Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-4
5 Contingency Table Example Sample results organized in a contingency table: (continued) sample size = n = 300: 10 Females, 1 were left handed 180 Males, 4 were left handed Hand Preference Gender Left Right Female Male Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-5
6 χ Test for the Difference Between Two Proportions H 0 : π 1 = π (Proportion of females who are left handed is equal to the proportion of males who are left handed) H 1 : π 1 π (The two proportions are not the same hand preference is not independent of gender) If H 0 is true, then the proportion of left-handed females should be the same as the proportion of left-handed males The two proportions above should be the same as the proportion of left-handed people overall Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-6
7 The Chi-Square Test Statistic The Chi-square test statistic is: ( f f ) o e χ = STAT f all cells e where: f o = observed frequency in a particular cell f e = expected frequency in a particular cell if H 0 is true χ STAT for the x case has 1degree of freedom (Assumed: each cell in the contingency table has expected frequency of at least 5) Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-7
8 Decision Rule The χ test statistic approximately follows a chisquared distribution with one degree of STAT freedom Decision Rule: If χ > χ STAT α, reject H 0, otherwise, do not reject H 0 0 Do not reject H 0 χ α α Reject H 0 χ Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-8
9 Computing the Average Proportion The average proportion is: p = X n 1 = 1 + X + n X n 10 Females, 1 were left handed 180 Males, 4 were left handed Here: p = = = i.e., based on all 180 children the proportion of left handers is 0.1, that is, 1% Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-9
10 Finding Expected Frequencies To obtain the expected frequency for left handed females, multiply the average proportion left handed (p) by the total number of females To obtain the expected frequency for left handed males, multiply the average proportion left handed (p) by the total number of males If the two proportions are equal, then P(Left Handed Female) = P(Left Handed Male) =.1 i.e., we would expect (.1)(10) = 14.4 females to be left handed (.1)(180) = 1.6 males to be left handed Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-10
11 Observed vs. Expected Frequencies Gender Female Hand Preference Left Right Observed = 1 Observed = 108 Expected = 14.4 Expected = Male Observed = 4 Expected = 1.6 Observed = 156 Expected = Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-11
12 The Chi-Square Test Statistic Hand Preference Gender Left Right Female Observed = 1 Observed = 108 Expected = 14.4 Expected = Male Observed = 4 Observed = 156 Expected = 1.6 Expected = The test statistic is: χ STAT = = all cells (f o f f (1 14.4) 14.4 e e ) ( ) (4 1.6) ( ) = Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-1
13 Decision Rule The test statistic is χ STAT = ; χ 0.05 with 1 d.f. = Decision Rule: If χ STAT > 3.841, reject H 0, otherwise, do not reject H 0 0 Do not reject H Reject H 0 χ 0.05 = χ Here, χ = < χ STAT 0.05 = 3.841, so we do not reject H 0 and conclude that there is not sufficient evidence that the two proportions are different at α = 0.05 Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-13
14 χ Test for Differences Among More Than Two Proportions Extend the χ test to the case with more than two independent populations: H 0 : π 1 = π = = π c H 1 : Not all of the π j are equal (j = 1,,, c) Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-14
15 The Chi-Square Test Statistic The Chi-square test statistic is: χ STAT = all cells Where: f o = observed frequency in a particular cell of the x c table f e = expected frequency in a particular cell if H 0 is true ( f o f e f e ) χ for the x c case has ( - 1)(c - 1) = STAT c - 1 degrees of freedom (Assumed: each cell in the contingency table has expected frequency of at least 1) Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-15
16 The overall proportion is: Computing the Overall Proportion p = X n 1 + X + n + + X + + n 1 c = c X n Expected cell frequencies for the c categories are calculated as in the x case, and the decision rule is the same: Decision Rule: If χ > χ, reject H 0, STAT α otherwise, do not reject H 0 χ α Where is from the chisquared distribution with c 1 degrees of freedom Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-16
17 The Marascuilo Procedure Used when the null hypothesis of equal proportions is rejected Enables you to make comparisons between all pairs Start with the observed differences, p j p j, for all pairs (for j j ) then compare the absolute difference to a calculated critical range Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-17
18 The Marascuilo Procedure Critical Range for the Marascuilo Procedure: (continued) Critical range = χ α p j (1 n j p j ) + p j' (1 n j' p j' ) (Note: the critical range is different for each pairwise comparison) A particular pair of proportions is significantly different if p j p j > critical range for j and j Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-18
19 Marascuilo Procedure Example A University is thinking of switching to a trimester academic calendar. A random sample of 100 administrators, 50 students, and 50 faculty members were surveyed Opinion Administrators Students Faculty Favor Oppose Totals Using a 1% level of significance, which groups have a different attitude? Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-19
20 Chi-Square Test Results H 0 : π 1 = π = π 3 H 1 : Not all of the π j are equal (j = 1,, 3) Expected Chi-Square Test: Administrators, Students, Faculty Admin Students Faculty Total Favor Oppose Total Observed χ STAT = > χ = 9.103so reject H 0 Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-0
21 Marascuilo Procedure: Solution Excel Output: Marascuilo Procedure compare Sample Sample Absolute Std. Error Critical Group Proportion Size ComparisonDifference of Difference Range Results to Means are not different to Means are not different to Means are different Level of significance d.f Q Statistic Other Data 0.01 Chi-sq Critical Value At 1% level of significance, there is evidence of a difference in attitude between students and faculty Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-1
22 χ Test of Independence Similar to the χ test for equality of more than two proportions, but extends the concept to contingency tables with r rows and c columns H 0 : The two categorical variables are independent (i.e., there is no relationship between them) H 1 : The two categorical variables are dependent (i.e., there is a relationship between them) Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-
23 χ Test of Independence The Chi-square test statistic is: χ STAT = all cells where: f o = observed frequency in a particular cell of the r x c table f e = expected frequency in a particular cell if H 0 is true ( f o f e f e ) (continued) χ STAT for the r x c case has (r -1)(c -1) degrees of freedom (Assumed: each cell in the contingency table has expected frequency of at least 1) Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-3
24 Expected Cell Frequencies Expected cell frequencies: Where: row total f e = column total n row total = sum of all frequencies in the row column total = sum of all frequencies in the column n = overall sample size Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-4
25 Decision Rule The decision rule is If, reject H 0, χ > STAT χ α otherwise, do not reject H 0 χ α Where is from the chi-squared distribution with (r 1)(c 1) degrees of freedom Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-5
26 Example The meal plan selected by 00 students is shown below: Class Standing Number of meals per week 0/week 10/week none Total Fresh Soph Junior Senior Total Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-6
27 Example (continued) The hypothesis to be tested is: H 0 : Meal plan and class standing are independent (i.e., there is no relationship between them) H 1 : Meal plan and class standing are dependent (i.e., there is a relationship between them) Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-7
28 Class Standing Example: Expected Cell Frequencies Observed: Number of meals per week 0/wk 10/wk none Total Fresh Soph Junior Senior Total Class Standing Expected cell frequencies if H 0 is true: Number of meals per week 0/wk 10/wk none (continued) Total Fresh Example for one cell: f e = = row total column total n = 10.5 Soph Junior Senior Total Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-8
29 Example: The Test Statistic (continued) The test statistic value is: χ STAT ( f f ) o e = f all cells e ( ) ( ) = ( ) 8. 4 = χ 0.05 = 1.59 from the chi-squared distribution with (4 1)(3 1) = 6 degrees of freedom Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-9
30 Example: Decision and Interpretation (continued) The test statistic is χ STAT = ; χ with 6 d.f. = 1.59 Decision Rule: If χ STAT > 1.59, reject H 0, otherwise, do not reject H 0 0 Do not reject H Reject H 0 χ 0.05=1.59 χ Here, χ STAT = < χ = 1.59, 0.05 so do not reject H 0 Conclusion: there is not sufficient evidence that meal plan and class standing are related at α = 0.05 Statistics for Managers Using Microsoft Excel 7e Copyright 014 Pearson Education, Inc. Chap 1-30
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