How productive are U.S. workers? One way to answer this questionis to study annual profits per employee. A random sample ofcompanies in computers (I), aerospace (II), heavy equipment (III),and broadcasting (IV) gave the following data regarding annualprofits per employee (units in thousands of dollars).
I | II | III | IV |
27.3 | 13.9 | 22.7 | 17.8 |
23.9 | 9.4 | 20.5 | 16.6 |
14.4 | 11.5 | 7.1 | 14.2 |
8.1 | 8.7 | 12.9 | 15.4 |
11.2 | 6.8 | 7.7 | 10.2 |
| 19.2 | | 9.5 |
Shall we reject or not reject the claim that there is nodifference in population mean annual profits per employee in eachof 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: Exactly three meansare equal.Ho: μ1 =μ2 = μ3 =μ4; H1: All four means aredifferent.     Ho:μ1 = μ2 =μ3 = μ4;H1: Not all the means areequal.Ho: μ1 =μ2 = μ3 =μ4; H1: Exactly two meansare equal.
(b) Find SSTOT, SSBET, andSSW and check that SSTOT =SSBET + SSW. (Use 3 decimal places.)
Find d.f.BET, d.f.W,MSBET, and MSW. (Use 3 decimalplaces for MSBET, andMSW.)
Find the value of the sample F statistic. (Use 3 decimalplaces.)
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 <0.100Â Â Â Â Â 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 orfail to reject the null hypothesis?
Since the P-value is greater than the level ofsignificance at α = 0.05, we do not rejectH0.Since the P-value is less than orequal to the level of significance at α = 0.05, we rejectH0.     Since theP-value is greater than the level of significance atα = 0.05, we reject H0.Since theP-value is less than or equal to the level of significanceat α = 0.05, we do not reject H0.
(e) Interpret your conclusion in the context of theapplication.
At the 5% level of significance there is insufficient evidenceto conclude that the means are not all equal.At the 5% level ofsignificance there is sufficient evidence to conclude that themeans are all equal.     At the 5% levelof significance there is insufficient evidence to conclude that themeans are all equal.At the 5% level of significance there issufficient evidence to conclude that the means are not allequal.
(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 < 0.1000.025 < 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 | | | | | | |