Statistical Methods

Chi Square Tests

There are problems of business and industry where the observed data can be classified into various categories.

Chi Square Tests

(e.g.) A company may be selling a product in containers of four different colours of the container. Here the data of customer preference can be classified according to the various container colors.

Chi Square Tests

(e.g.) Items in a manufacturing process can be classified into defective, marginal and non defective units. Data that fall in more than two categories often result from a multinomial experiment. The chisquare test consists of alternative methods of dealing with such situations.

Chi Square Tests

Depending on the purpose of testing and the manner how the count data are classified, the chi-square tests may be of Tests for equality of proportions Tests for goodness of fit Test of independence (data grouped into more than one category)

Example
Determine, on the basis of the sample data shown in the following table, whether the true proportion of shoppers favouring detergent A over detergent B is the same in all three cities:

Mumbai Chennai

Number favouring detergent A 232 260

Number favouring detergent B 168 240 203

Bangalore 197

Example
Number Number Number favouring favouring indifferent detergent A detergent B 174 93 133 196 124 105 180 147

Mumbai Chennai

Bangalore 148

Chi Square Tests

Example : In a shop study, a set of data was collected to determine whether or not the proportion of defectives produced by workers was the same for the day, evening, or night shift worked. The following data were collected:

Chi Square Tests

Shift Day Defectives 45 Nondefectives 905 Evening 55 890 Night 70 870

Determine if the proportion of defectives is the same for all three shifts.

Example
Consider the following table obtained in a study of the relationship, if any, of the IQs of persons who have gone through a large companys job-training program and their subsequent performance on the job:

Performance Poor Fair Good Below average Average Above average 67 42 10 64 76 23 25 56 37

IQ

Example
A marketing manager is curious to find out whether consumers in different income strata prefer different brands. In a market survey conducted to examine whether the choice of a brand is related to the income strata of the consumers, a random sample of 600 consumers reveal the following:

Monthly Income

Brand 1

Brand 2 128 60 30 22

Brand 3 50 28 26 16

Less than Rs 132 10000 Rs 10000 -15000 Rs 15000 20000 Above Rs 20000 62 30 16

Is there any association between the brand preferred and the income strata?

Example
In consumer marketing, a common problem the marketing manager encounters is the selection of the appropriate package design. Assume that a marketer wishes to compare five different package designs. A random sample of 200 consumers gives the following picture:

Do the consumer preferences for the designs show any significant differences?

Package design A B C D E

Preference by consumers 36 52 40 35 37

Example
Suppose the traffic department of a city wishes to know whether traffic accidents are uniformly distributed over the different days of the week. The distribution of a sample number of accidents is given below:

Chi Square Tests

No. of traffic accidents Monday 74 62 Tuesday Wednesday 75 72 Thursday Friday 60 Saturday 80 Sunday 67
Do the data confirm the belief that the traffic accidents are uniformly distributed over the different days of the week?

Day