STATISTICAL

ANALYSIS:
MINI PROJECT
SEMINAR:
ANOVA
VIVEK GANESAN

(012020092074)
What Is ANOVA?
 The ANOVA, which stands for the Analysis of Variance test, is a tool in statistics that is
concerned with comparing the means of two groups of data sets and to what extent they
differ. 
In simpler and general terms, it can be stated that the ANOVA test is used to identify which
process, among all the other processes, is better. 
At a minimum, you need a continuous dependent variable and a categorical independent
variable that divides your data into comparison groups to perform ANOVA.
 Types of ANOVA
One-Way ANOVA
 One-way ANOVA is generally the most used method of performing the ANOVA test. It is also referred
to as one-factor ANOVA, between-subjects ANOVA, and an independent factor ANOVA. It is used to
compare the means of two independent groups using the F-distribution.
Two carry out the one-way ANOVA test, you should necessarily have only one independent
variable with at least two levels. One-way ANOVA does not differ much from t-test. 

 EXAMPLE:
Suppose a teacher wants to know how good he has been in teaching with the students. So, he
can split the students of the class into different groups and assign different projects related to
the topics taught to them. He can use one-way ANOVA to compare the average score of each
group. He can get a rough understanding of topics to teach again.
Assumptions for One-way ANOVA
There are three primary assumptions in ANOVA:
1.The responses for each factor level have a normal population
distribution.
2.These distributions have the same variance.
3.The data are independent.
Two-way ANOVA
Two-way ANOVA is carried out when you have two independent variables. It is an extension of
one-way ANOVA. You can use the two-way ANOVA test when your experiment has a quantitative
outcome and there are two independent variables. 

Two-way ANOVA is performed in two ways:

Two-way ANOVA with replication: It is performed when there are two groups and
the members of these groups are doing more than one thing. Our example in the
beginning can be a good example of two-way ANOVA with replication.
Two-way ANOVA without replication: This is used when you have only one group
but you are double-testing that group. For example, a patient is being observed
before and after medication
Assumptions for Two-way ANOVA
The population must be close to a normal distribution
Samples must be independent
Population variances must be equal
Groups must have equal sample sizes
Example for One-Way & Two-
Way ANOVA

A team is researching which type of fertilizer and planting density

produces the greatest crop yield in a field experiment. They had been
assigned different plots in a field to a combination of fertilizer type (1, 2, or
3) and planting density (1=low density, 2=high density), and measure the
final crop yield in bushels per acre at harvest time.
Formulation Of Hypothesis
For the one-way ANOVA, we will only analyze the effect of fertilizer type on crop yield.

H0: There is no effect of fertilizer type on crop yield.

H1: There is effect of fertilizer type on crop yield.

In the crop yield experiment, three hypotheses can be tested using two-way ANOVA:
H0: There is no difference in average yield for any fertilizer type.

H1: There is a difference in average yield by fertilizer type.

H0: There is no difference in average yield at either planting density.

H1: There is a difference in average yield by planting density.

H0: The effect of one independent variable on average yield does not depend on the effect of the other independent variable (a.k.a. no
interaction effect).

H1: There is an interaction effect between planting density and fertilizer type on average yield.
Differences between one-way and
two-way ANOVA
This is defined by how many independent variables are included in the ANOVA test.
One-way means the analysis of variance has one independent variable

Two-way means the test has two independent variables

An example of this may be the independent variable being a brand of drink (one-way), or
independent variables of brand of drink and how many calories it has or whether it’s original or diet.
 Benefits OF ANOVA In Business
Context
Quality and cost comparison: In the automotive industry, a car manufacturing company can use ANOVA when
purchasing materials to compare the quality of the material to the costs so that they know which supplier to buy
from or who should build their products. For example, if they need to purchase steel for door frames, they can
compare the strength of the steel to how much it will cost to purchase.

Product safety tests: In the beauty industry, cosmetics companies can use ANOVA to test the safety and
effectiveness of certain makeups or sunscreen products, for example. They can evaluate these products
across different groups of people and then choose to use the ingredients that provide the desired outcomes
while minimizing health risks.

Optimize production: In entertainment and media, companies can use ANOVA to test what different locations
for filming an upcoming movie, and determine which site would be best based on the time of the year, or how
much materials would cost for building a set, enabling them to choose the most cost-effective production
company.
 CONCLUSION
ANOVA is used in a wide variety of real-life situations, but the most common include:

 Retail: Store are often interested in understanding whether different types of promotions, store layouts, advertisement tactics,
etc. lead to different sales. This is the exact type of analysis that ANOVA is built for.

 Medical: Researchers are often interested in whether or not different medications affect patients differently, which is why
they often use one-way or two-way ANOVAs in these situations.

 Environmental Sciences: Researchers are often interested in understanding how different levels of factors affect plants and
wildlife. Because of the nature of these types of analyses, ANOVAs are often used.