Analysis of Variance

1. In a completely randomized experimental design, three brands of paper towels were

tested for their ability to absorb water. Equal size towels were used, with four
selections of towels tested per brand. The absorbency rating data follow. At a .05 level
of significance, does there appear to be a difference in the ability of the brands to
absorb water?
Brand
X
Y
Z
91
99
83
100
96
88
88
94
89
89
99
76
Answer: Significant; p value = .0134
2. Money magazine reports percentage returns and expense ratios for stock and bond
funds. The following data are the expense ratios for 10 midcap stock funds, 10 small
cap stock funds. 10 hybrid stock funds, and 10 specialty stock funds (Money, March
2003)
Midcap
Small cap
Hybrid
Specialty
1.2
2.0
2.0
1.6
1.1
1.2
2.7
2.7
1.0
1.7
1.8
2.6
1.2
1.8
1.5
2.5
1.3
1.5
2.5
1.9
1.8
2.3
1.0
1.5
1.4
1.9
0.9
1.6
1.4
1.3
1.9
2.7
1.0
1.2
1.4
2.2
1.4
1.3
0.3
0.7
Use = .05 to test for any significance difference in the mean expense ratio among the
four types of stock funds.
Answer: Significant; p Value = .046
3. Three difference assembly methods have been proposed for a new product. A
completely randomized experimental design was chosen to determine which assembly
method results in the greatest number of parts produced per hour, and 30 workers

were randomly selected and assigned to use one of the purposed methods. The
number of units produced by each worker follows.
Method
A
97
73
93
100
73
91
100
86
92
95

B
93
100
93
55
77
91
85
73
90
83

Answer: Not Significant; p Value = .2455

C
99
94
87
66
59
75
84
72
88
86

Multiple Regressions
1. The personnel director for Electronics Associates developed the following estimated
regression equation relating an employees score on a job satisfaction test to his or her
length of service and wage rate.

y 14.4 8.69 x1 13.5x2

Where,
x1= length of service (years)
X2 = wage rate (dollars)
Y = job satisfaction test score (higher scores indicate greater job
satisfaction)
a. Interpret the coefficients in this estimated regression equation.
b. Develop an estimate of the job satisfaction test for an employee who has four years of
service and makes $6.50 per hour. Answer: 67.39
2. Recall that in exercise 49, the admissions officer for Clearwater College developed the
following estimated regression equation relating final collage GPA to the students SAT
mathematics score and high school GPA.

1.41 .0235x1 .00486 x2

Where,
X1 = high school grade point average
X2 = SAT mathematics score
Y = final college grade point average
a. Complete the missing entries in this output. Answer:
y
1.41 .0235x1 .00486 x2
b. Compute F and test at a .05 level of significance to see whether a significance
relationship is present. Answer: Significant ; p Value = .0001

c. Did the estimated regression equation provide a good fit to the data? Explain.
Answer: R2 = .937; Ra2 = 9.19; good fit
d. Use the t test and = .05 to test H0: 1 = 0 and H0 : 2 = 0.Answer: Both
significant
3. Recall that in exercise 50 the personnel director for Electronic Associates developed
the following estimated regression equation relating an employees score on a job
satisfaction test to length of service and wage rate.
y 14.4 8.69 x1 13.5x2
Where,
X1 = length of service (years)
X2 = wage rate (dollars)
Y = job satisfaction test scores (higher scores indicated greater job satisfaction)

a.
b.
c.
d.

Complete the missing entries in this output.

Compute F and test using = .05 to see whether a significant relationship is present.
Did the estimated regression equation provide a good fit to the data? Explain.
Use the t test and = .05 to test H0: 1 = 0 and H0: 2 = 0.

4. Smart Money magazine evaluated 65 metropolitan areas to determine where home

values are headed. An ideal city would get a score of 100 if all factors measured were as
favorable as possible. Areas with a score of 60 or greater are considered to be primed
for price appreciation, and areas with a score of below 50 may see housing value erode.
Two of the factors evaluated were the recession resistance of the area and its
affordability. Both of these factors were rated using a scale ranging from 0 (low score) to
10 (high score). The data obtained for a sample of 20 cities evaluated by SmartMoney
follow (Smart Money, February 2002).
a. Develop an estimated regression equation that can be used to predict the score
given the recession resistance rating. At the .05 level of significance, test for a
significant relationship. Answer: Score = 50.6 + 1.56 RecRes
b. Did the estimated regression equation developed in part (a) provide a good fit to the
data? Explain. Answer: r2 = .431; not a good fit
c. Develop an estimated regression equation that can be used to predict the score
given the recession resistance rating and the affordability rating. At the .05 level of
significance, test for overall significance. Answer: Score = 33.5 + 1.90 RecRes +2.61
Afford Significant , Ra2 = .784; much better fit