Program

MBA

Semester

III

Subject Code

MB0050

Subject Name

Research Methodology

Unit Number

12

Unit Title

Analysis of Variance

Lecture Number :

12

Lecture Title

Analysis of Variance

Book Id

B1700

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Unit-12 Analysis of Variance

Analysis of Variance

Objectives :

Explain the meaning and assumptions of conducting analysis of

variance.

Describe completely randomized design.

Describe the randomized block design in two-way analysis of

variance.

Explain factorial design.

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Unit-12 Analysis of Variance

Lecture Outline

Introduction
Completely Randomized Design in a One-way ANOVA
Randomized Block Design in Two-way ANOVA

Factorial Design
Summary
Check Your Learning

Activity

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Unit-12 Analysis of Variance

Introduction

The Analysis of Variance (ANOVA) technique helps to draw

inferences

whether

the

samples

have

been

drawn

from

populations having the same mean.

The basic principle underlying the technique is that the total

variation in the dependent variable is broken into two partsone
which can be attributed to some specific causes and the other that

may be attributed to chance.

In ANOVA, the dependent variable in question is metric (interval

or ratio scale), whereas the independent variables are categorical

(nominal scale).

In ANOVA, it is assumed that each of the samples is drawn from a

normal population and each of these populations has an equal
variance.
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Unit-12 Analysis of Variance

Completely Randomized Design in a

One-way ANOVA

Completely randomized design involves the testing of the equality

of means of two or more groups.

In this

design, there

independent
(interval/ratio

is

one dependent variable and

variable.

The

dependent

scale)

whereas

the

variable

independent

is

one

metric

variable

is

categorical (nominal scale).

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Unit-12 Analysis of Variance

Completely Randomized Design in a

One-way ANOVA

The total variation in the data set is called the total sum of

squares (TSS) and is computed as:

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Unit-12 Analysis of Variance

Completely Randomized Design in a

One-way ANOVA

The variation within the sample, which is attributed to chance, is

referred to as the error sum of squares (SSE). This could be

computed by subtracting the treatment sum of squares from the
total sum of squares. This is shown as:

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Unit-12 Analysis of Variance

Completely Randomized Design in a

One-way ANOVA
For a given level of significance, the computed F statistic is compared

with the table value of F with (k-1) degrees of freedom in the

numerator and k(n-1) degrees of the freedom for the denominator. If
the computed F value is greater than the tabulated F value, the null
hypothesis is rejected.

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Unit-12 Analysis of Variance

Randomized Block Design in Twoway ANOVA

The total sum of square is partitioned into three componentsone

due to treatment, second due to block and the third one due to
chance (called the error sum of squares).

We have another component called block sum of squares (SSB)

which is computed as:

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Unit-12 Analysis of Variance

Randomized Block Design in Twoway ANOVA

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Unit-12 Analysis of Variance

Factorial Design

In factorial design, the dependent variable is the interval or the

ratio scale and there are two or more independent variables which
are nominal scale.

If there are two independent variables each having three cells,

there would be a total of nine interactions.

The main advantage of factorial design over randomized block

design is that it is possible to measure the main effects as well as
the interaction effects of two or more independent variables at

various levels.

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Unit-12 Analysis of Variance

Factorial Design

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Unit-12 Analysis of Variance

Summary

RA Fisher developed the theory of analysis of variance. This technique could

be used to test the equality of more than two population means in one go.
The basic principle underlying the technique is that the total variations in
the dependent variable can be broken into two components one which can
be attributed to specific causes and the other one may be attributed to
chance.

The analysis of variance techniques in this unit are illustrated through the
completely randomized design, randomized block design and factorial
design.

In a completely randomized design, there is one dependent and one

independent variable. The dependent variable is metric whereas the
independent variable is categorical.

In factorial design, the dependent variable is metric and there are two or

more independent variables which are non-metric.

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Unit-12 Analysis of Variance

Check Your Learning

1.

What is the analysis of variance?

Ans: If there are more than two populations, the test for the equality of means
could be carried out by the analysis of variance (ANOVA) technique.
2. Differentiate using suitable examples between the one-way and two-way
analysis of variance.
Ans: If there is one independent variable (one factor) divided into various
categories, we have one-way analysis of variance. In the two-way analysis of
variance, two factors each divided into the various categories are involved.
3. What are the characteristics of randomized block design?
Ans: A randomized block design has one dependent and two independent
variables each with two or more categories.

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Unit-12 Analysis of Variance

Activity

Visit a few stores (say, 9) randomly in your town selling three

different styles of chairs. The stores can be categorized as small,
medium and large sizes. What design would you choose to study
the effect of styles of chairs and store size on sales? Detail the

procedure.

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