Categories: Finance

ANOVA Analysis

Assumptions

•  The dependent variable should be interval or ratio.
•  The population in which samples are drawn should be normally distributed.
•  Sample cases should be independent of each other.
•  Variance between the groups should be approximately equal.

One-Way ANOVA (It uses F-Statistic)

One way ANOVA is a statistical technique that is used to compare the means of more than two groups based on a single treatment factor. OR we can say that it assess the effects of one independent variable on a single dependent variable.

Examples:
The owner is interested to know the average daily sale of new brand at three metro cities.
The vice chancellor is interested to know the average CGPA of three institutes.
Ho: The average sale of the new brand of gasoline is same in all three metro cities.

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