ECON 257D2 Lecture Notes - Lecture 4: Regression Analysis, Space Shuttle Challenger, Intermediate 2
4 Apr 2015
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Analysis of variance extends comparing the means of two populations to comparing means in several populations. Anova is used when there is a categorical variable that determines the population. For example, consider comparing the e ectiveness of several drugs or treatments. When there is just a comparison between two the hypothesis involves a di erence in means. But suppose that there are several treatments and the null hypothesis is that all are equally e ective. The data comes from samples taken from several di erent populations, each of which corresponds to a particular treatment (value of the factor). For one factor we consider what is called one-way anova. It is also possible that several di erent factors may be considered, for exam- ple, treatment and the hospital where it was administered. When there are two factors, we get two-way anova.
