In: Economics
Question 4:
Consider the following sample information for three treatment groups.
Treatment 1 Treatment 2 Treatment 3
$8 $3 $3
6 2 4
10 4 5
9 3 4
Using the 0.05 significance level, use the ANOVA method to test the null hypothesis that the three treatment means are equal.
Consider the given problem here there are three treatment and the observation corresponding to each treatment is given in the question, => the “mean value” corresponding to each treatment are given by, “m1=8.25”, “m2=3” and “m3=4” and the “grand mean” is given by “m=5.08” the overall mean of all observations. So, here the null and the alternative hypothesis is given below.
=> “H0: μ1 = μ2 = μ3”, and the corresponding alternative hypothesis is given by “H1: the means are not equal”.
So, here the “F statistic” is given below.
=> F = MSB/MSE, where “MSB = SSB/k-1” and “SSB = Summation[nj(mj-m)^2], where “mj” be the mean of the “jth treatment” and “m=the grand mean”.
Similarly, “MSE=SSE/N-k”, where “SSE = Summation Summation(X-mj)^2”.
Now, the “SSB” is given below.
=> SSB = Summation[nj(mj-m)^2] = 4*(8.25-5.08)^2 + 4*(3-5.08)^2 + 4*(4-5.08)^2 = 40.1956 + 17.3056 + 4.6656 = 62.1668, => SSB = 62.1668.
Now, the “SSE” is given by, => SSE = Summation Summation (X-mj)^2, where “X=oberservation”.
So, the “SSE” is given by, “SSE = 8.75 + 2 + 2 = 12.75”. Consider the following “ANOVA table”.
So, here the “F statistic” is “F=21.9407”. Now, the critical value of the hypothesis testing at “5% level of significance” is given by, => F0.05(2,9) = 19.38 < 21.94, => the value of “F” is on the critical region, => the mean value of the treatments are not same they are differ to each other.