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ANOVA PAGE 7

ANOVATeam BRES 342University of PhoenixMr. McMahonFebruary 27, 2007ANOVAResearch IssueThis research paper will be discussing the use of the ANOVA hypothesis testing system. Team chose a research subject dealing with the price of groceries. The members of the team went to different grocery stores to compare prices of certain items. Team is going to perform an ANOVA hypothesis test to determine if there is a difference in the retail price of groceries at Publix, Winn-Dixie, and Wal-Mart grocery stores.HypothesisFor research purposes, Team B went to three different grocery stores to get the prices of 15 items. These items were pre-selected in order to standardize the results. The items used in the test are items that most households buy on a regular basis. In order to conduct the hypothesis testing, Team had to come up with a hypothesis to test. Team B's hypothesis statement is as follows: "There is no difference in the price of groceries at Publix, Winn-Dixie, and Wal-Mart grocery stores."ANOVA TestThe ANOVA hypothesis testing procedure is used to compare three or more population means simultaneously. It is also used to test whether two sample variances are equal. Team B will be testing three population means. To be able to use the ANOVA test the data must be distributed normally and the information must be of the ratio or interval level of measurement (Lind, Marchal, & Warthen, 2004).The first step the researcher must take to perform the ANOVA test is to make a hypothesis statement. The must be a null hypothesis and an alternative hypothesis. The null hypothesis is designated as Ho. The null hypothesis equates the "population parameter to a specification." (Lind, Marchal, & Wathen, 2004) This hypothesis will also contain an equality. Most of the time, researchers conduct tests will the anticipation of rejecting the null hypothesis. The alternative hypothesis is designated as H1. This hypothesis shows what will be concluded if the null hypothesis is rejected (Lind, et al, 2004). The null and alternative hypothesis for this research is as follows:Ho: µp = µwd = µwmH1: µp ≠ µwd ≠ µwmThe next step in the process is to select the significance level of the research. The significance level is used to measure how accurate the test results will be. This number can fall anywhere between 0 and 1. The levels of significance that are commonly used are 0.01, 0.05, and 0.01. For consumer research the 0.05 level is commonly used. Team B will use the 0.05 significance level. This means that the results of Team B's test will be have a 5% margin of error. The higher the significance level of a test the more expensive the test will be. Researchers usually use the significance level that will get the results that they need at the cheapest price.Step three of the testing process is to identify the test statistic to be used. A test statistic is described as, "a value used to determine whether to reject the...

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