9.2 Inference for TwoWay Tables
exclusive territory
 new store will be the only representative of the franchise in a specified
territory and will not have to compete with other outlets of the same chain
Effect of having an exclusive territory on the success of the firm?
Observed number of firms
Exclusive Territory?
Success?
Yes
No
Total
Yes
108
15
123
No
34
13
47
Total
142
28
170
explanatory variable column variable (Exclusive Territory?)
response variable row variable (Success?)
Column percents for firms
Exclusive Territory?
Success?
Yes
No
Yes
76%
54%
No
24%
46%
Total
100%
100%
The difference between the percents of successes among the two types of firms is quite large.
Is
this difference statistically significant?
The hypothesis:
no association
H
0
:
There is no association between the row variable and the column variable.
H
a
:
There is an association between the row variable and the column variable.
“For twoway tables in general, the alternative includes many possibilities [think about a 3x3
twoway table].
Because it includes all of the many kinds of association that are possible, we
cannot describe H
a
as either onesided or twosided.” (594)
c = # of columns
r = # of rows
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 Fall '08
 ABDUS,S.
 ChiSquare Test, Variance, Chisquare distribution, Pearson's chisquare test, exclusive territory

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