Question

How productive are U.S. workers? One way to answer this question is to study annual profits...

How productive are U.S. workers? One way to answer this question is to study annual profits per employee. A random sample of companies in computers (I), aerospace (II), heavy equipment (III), and broadcasting (IV) gave the following data regarding annual profits per employee (units in thousands of dollars).

I II III IV
27.5 13.8 22.1 17.6
23.1 9.5 20.3 16.8
14.3 11.3 7.7 14.3
8.9 8.3 12.5 15.1
11.1 6.1 7.9 10.6
19.5 9.8

Shall we reject or not reject the claim that there is no difference in population mean annual profits per employee in each of the four types of companies? Use a 5% level of significance.

(a) What is the level of significance?


State the null and alternate hypotheses.

Ho: μ1 = μ2 = μ3 = μ4; H1: Not all the means are equal.Ho: μ1 = μ2 = μ3 = μ4; H1: Exactly two means are equal.    Ho: μ1 = μ2 = μ3 = μ4; H1: All four means are different.Ho: μ1 = μ2 = μ3 = μ4; H1: Exactly three means are equal.


(b) Find SSTOT, SSBET, and SSW and check that SSTOT = SSBET + SSW. (Use 3 decimal places.)

SSTOT =
SSBET =
SSW =


Find d.f.BET, d.f.W, MSBET, and MSW. (Use 3 decimal places for MSBET, and MSW.)

dfBET =
dfW =
MSBET =
MSW =


Find the value of the sample F statistic. (Use 3 decimal places.)


What are the degrees of freedom?
(numerator)
(denominator)

(c) Find the P-value of the sample test statistic.

P-value > 0.1000.050 < P-value < 0.100    0.025 < P-value < 0.0500.010 < P-value < 0.0250.001 < P-value < 0.010P-value < 0.001


(d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis?

Since the P-value is greater than the level of significance at α = 0.05, we do not reject H0.Since the P-value is less than or equal to the level of significance at α = 0.05, we reject H0.    Since the P-value is greater than the level of significance at α = 0.05, we reject H0.Since the P-value is less than or equal to the level of significance at α = 0.05, we do not reject H0.


(e) Interpret your conclusion in the context of the application.

At the 5% level of significance there is insufficient evidence to conclude that the means are not all equal.At the 5% level of significance there is sufficient evidence to conclude that the means are all equal.    At the 5% level of significance there is insufficient evidence to conclude that the means are all equal.At the 5% level of significance there is sufficient evidence to conclude that the means are not all equal.


(f) Make a summary table for your ANOVA test.

Source of
Variation
Sum of
Squares
Degrees of
Freedom
MS F
Ratio
P Value Test
Decision
Between groups ---Select--- p-value > 0.100 0.050 < p-value < 0.100 0.025 < p-value < 0.050 0.010 < p-value < 0.025 0.001 < p-value < 0.010 p-value < 0.001 ---Select--- Do not reject H0. Reject H0.
Within groups
Total

Homework Answers

Answer #1

Applying ANOVA:

a)

level of significance =0.05

Ho: μ1 = μ2 = μ3 = μ4; H1: Not all the means are equal.

b)

SSTOT 688.050
SSBET 84.500
SSW 603.550
dfBET 3
dfW 18
MSBET 28.167
MSW 33.531

value of the sample F statistic =0.840

(numerator df =3

denominator df =18

c)

P-value > 0.100

d)

Since the P-value is greater than the level of significance at α = 0.05, we do not reject H0.

e)

At the 5% level of significance there is insufficient evidence to conclude that the means are not all equal.

f)

Source of Variation SS df MS F P-value
Between Groups 84.500 3 28.167 0.840 p value >0.10 do not reject HO
Within Groups 603.550 18 33.531
Total 688.050 21
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