Business
Research Methods
William G. Zikmund
Chapter 22:
Bivariate Analysis -
Tests of Differences
Common Bivariate Tests
Differences among
Differences between
Type of Measurement three or more
two independent groups
independent groups
Independent groups: One-way
Interval and ratio
t-test or Z-test ANOVA
Common Bivariate Tests
Differences among
Differences between
Type of Measurement three or more
two independent groups
independent groups
Mann-Whitney U-test
Ordinal Kruskal-Wallis test
Wilcoxon test
Common Bivariate Tests
Differences among
Differences between
Type of Measurement three or more
two independent groups
independent groups
Z-test (two proportions)
Nominal Chi-square test
Chi-square test
Type of Differences between
Measurement two independent groups
Nominal Chi-square test
Differences Between Groups
• Contingency Tables
• Cross-Tabulation
• Chi-Square allows testing for significant
differences between groups
• “Goodness of Fit”
Chi-Square Test
(Oi Ei )²
x²
Ei
x² = chi-square statistics
Oi = observed frequency in the ith cell
Ei = expected frequency on the ith cell
Chi-Square Test
Ri C j
Eij
n
Ri = total observed frequency in the ith row
Cj = total observed frequency in the jth column
n = sample size
Degrees of Freedom
(R-1)(C-1)=(2-1)(2-1)=1
Degrees of Freedom
d.f.=(R-1)(C-1)
Awareness of Tire
Manufacturer’s Brand
Men Women
Total
Aware 50 10 60
Unaware 15 25
40
65 35 100
Chi-Square Test: Differences
Among Groups Example
(50 39 ) 2
(10 21) 2
X
2
39 21
(15 26 ) 2
( 25 14 ) 2
26 14
3.102 5.762 4.654 8.643
2
22.161
2
d . f . ( R 1)(C 1)
d . f . ( 2 1)( 2 1) 1
X2=3.84 with 1 d.f.
Type of Differences between
Measurement two independent groups
Interval and t-test or
ratio Z-test
Differences Between Groups
when Comparing Means
• Ratio scaled dependent variables
• t-test
– When groups are small
– When population standard deviation is
unknown
• z-test
– When groups are large
Null Hypothesis About Mean
Differences Between Groups
1 2
OR
0
1 2
t-Test for Difference of Means
mean 1 - mean 2
t
Variabilit y of random means
t-Test for Difference of Means
1 2
t
S X1 X 2
X1 = mean for Group 1
X2 = mean for Group 2
SX1-X2 = the pooled or combined standard error
of difference between means.
t-Test for Difference of Means
1 2
t
S X1 X 2
t-Test for Difference of Means
X1 = mean for Group 1
X2 = mean for Group 2
SX -X = the pooled or combined standard error
1 2
of difference between means.
Pooled Estimate of the
Standard Error
n1 1 S ( n2 1) S
2 2
) 1 1
S X1 X 2 1 2
n1 n2 2 n1 n2
Pooled Estimate of the
Standard Error
S12 = the variance of Group 1
S22 = the variance of Group 2
n1 = the sample size of Group 1
n2 = the sample size of Group 2
Pooled Estimate of the Standard Error
t-test for the Difference of Means
n1 1 S12 ( n2 1) S 22 ) 1 1
S X1 X 2
n1 n2 2 n1 n2
S 2 = the variance of Group 1
1
S 2 = the variance of Group 2
2
n1 = the sample size of Group 1
n2 = the sample size of Group 2
Degrees of Freedom
• d.f. = n - k
• where:
– n = n1 + n2
– k = number of groups
t-Test for Difference of Means
Example
20 2.1 13 2.6
2 2
1 1
S X1 X 2
21 14
33
.797
16.5 12.2 4 .3
t
.797 .797
5 .395
Type of Differences between
Measurement two independent groups
Nominal Z-test (two proportions)
Comparing Two Groups when
Comparing Proportions
• Percentage Comparisons
• Sample Proportion - P
• Population Proportion -
Differences Between Two Groups
when Comparing Proportions
The hypothesis is:
Ho: 1
may be restated as:
Ho: 1
Z-Test for Differences of
Proportions
Ho : 1 2
or
Ho : 1 2 0
Z-Test for Differences of
Proportions
Z
p1 p2 1 2
S p1 p2
Z-Test for Differences of
Proportions
p1 = sample portion of successes in Group 1
p2 = sample portion of successes in Group 2
1 1)= hypothesized population proportion 1
minus hypothesized population
proportion 1 minus
Sp1-p2 = pooled estimate of the standard errors of
difference of proportions
Z-Test for Differences of
Proportions
1 1
S p1 p2 pq
n
1 n2
Z-Test for Differences of
Proportions
pp = pooled estimate of proportion of success in a
sample of both groups
qp = (1- pp) or a pooled estimate of proportion of
failures in a sample of both groups
n= sample size for group 1
n= sample size for group 2
Z-Test for Differences of
Proportions
n1 p1 n2 p2
p
n1 n2
Z-Test for Differences of
Proportions
1 1
S p1 p2 .375 .625
100 100
.068
A Z-Test for Differences of
Proportions
p
100 .35 100 .4
100 100
.375
Differences between
Type of
three or more
Measurement
independent groups
Interval or ratio One-way
ANOVA
Analysis of Variance
Hypothesis when comparing three groups
1
Analysis of Variance
F-Ratio
Variance between groups
F
Variance within groups
Analysis of Variance
Sum of Squares
SS total SS within SS between
Analysis of Variance
Sum of SquaresTotal
n c
SS total ( X ij X ) 2
i 1 j 1
Analysis of Variance
Sum of Squares
piij= individual scores, i.e., the ith observation or
X
test unit in the jth group
pi = grand mean
X
n = number of all observations or test units in a
group
c = number of jth groups (or columns)
Analysis of Variance
Sum of SquaresWithin
n c
SS within ( X ij X j ) 2
i 1 j 1
Analysis of Variance
Sum of SquaresWithin
pi ij= individual scores, i.e., the ith observation or
X
test unit in the jth group
pi = grand mean
X
n = number of all observations or test units in a
group
c = number of jth groups (or columns)
Analysis of Variance
Sum of Squares Between
n
SS between n j ( X j X ) 2
j 1
Analysis of Variance
Sum of squares Between
X j= individual scores, i.e., the ith observation or
test unit in the jth group
X = grand mean
nj = number of all observations or test units in a
group
Analysis of Variance
Mean Squares Between
SS between
MS between
c 1
Analysis of Variance
Mean Square Within
SS within
MS within
cn c
Analysis of Variance
F-Ratio
MS between
F
MS within
A Test Market Experiment
on Pricing
Sales in Units (thousands)
Regular Price Reduced Price Cents-Off Coupon
$.99 $.89 Regular Price
Test Market A, B, or C 130 145 153
Test Market D, E, or F 118 143 129
Test Market G, H, or I 87 120 96
Test Market J, K, or L 84 131 99
Mean X1=104.75 X2=134.75 X1=119.25
Grand Mean
X=119.58
ANOVA Summary Table
Source of Variation
• Between groups
• Sum of squares
– SSbetween
• Degrees of freedom
– c-1 where c=number of groups
• Mean squared-MSbetween
– SSbetween/c-1
ANOVA Summary Table
Source of Variation
• Within groups
• Sum of squares
– SSwithin
• Degrees of freedom
– cn-c where c=number of groups, n= number of
observations in a group
• Mean squared-MSwithin
– SSwithin/cn-c
ANOVA Summary Table
Source of Variation
• Total
• Sum of Squares
– SStotal
• Degrees of Freedom
– cn-1 where c=number of groups, n= number of
observations in a group
MS BETWEEN
F
MS WITHIN
