Accession Number:

ADA113426

Title:

Stronger Tests Using Heteroscedastic Anova with a Simulation of Multiple Objective Budgeting Case Study.

Descriptive Note:

Technical rept.,

Corporate Author:

OHIO STATE UNIV COLUMBUS DEPT OF STATISTICS

Personal Author(s):

Report Date:

1982-03-01

Pagination or Media Count:

18.0

Abstract:

The traditional analysis of variance ANOVA is based on the assumptions of normality, independence of the statistical errors, and equality of the variances of the errors. Studies of the robustness of the F-test have shown that the violation of normality has little effect on inferences about the means. However, the violation of independence or equality of variances can have a serious effect on inferences about the means, especially if the cell sample sizes are unequal see, for example, Scheffe 1959 or Bishop 1976. In practice, the assumption of equality of error variances seems to be often unjustified in fact, even when the error variances are equal, the power of the F-test depends upon the unknown common variance, which renders it difficult to plan an experiment rationally. Recently, Bishop and Dudewicz 1978, 1981 developed new ANOVA procedures in the contexts of the one-way layout and higher- way layouts. Their procedures allow unequal and unknown population variances and give tests with level and power completely independent of the unknown variances. Briefly outlined is the two-way layout heteroscedastic-ANOVA HANOVA methodology. It is followed by case study of Lins 1978 multiple objective firm simulation for the two-way layout ANOVA procedure. Finally, the conclusion and other possible business applications are outlined.

Subject Categories:

  • Economics and Cost Analysis
  • Statistics and Probability

Distribution Statement:

APPROVED FOR PUBLIC RELEASE