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handout_9_1 - 9.1 Inference for Two-Way Tables exclusive...

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9.1 Inference for Two-Way 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? (explanatory) Success? (response) 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? (explanatory) Success? (response) 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 two-way tables in general, the alternative includes many possibilities [think about a 3×3 two-way table]. Because it includes all of the many kinds of association that are possible, we cannot describe H a as either one-sided or two-sided.” c = # of columns r = # of rows
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Expected cell counts Expected cell counts are calculated under the assumption that the null hypothesis is true (that there is no association between the row variable and the column variable). Observed cell counts
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handout_9_1 - 9.1 Inference for Two-Way Tables exclusive...

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