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5 Step Hypothesis Test: ANOVA

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A Model of Socio-Economic Differences: Housing the Ultra -poor in Haiti

The following study was developed by Economist Simon Fass. Fass surveyed a sample population of low-income households in St. Martin. The variables analyzed were monthly income per adult and choice of rental contract for housing.

All families in St. Martin had to opt for one of 3 available time packages. They could pay in advance for a week, a month, or six months; and the shorter the time package, the higher the unit price. Payment by the week cost 10 to 20 percent more in monthly rent per square meter than payment by the month, and payment by the month cost twice as much as for 6 months. But offsetting the higher unit cost was the advantage of lower cash outlays. To obtain a week of housing required an average prepayment of $1.55. A month cost $5.30 and 6 months $18.90.

1) You must determine if there is a difference among the income of the adults in respect to the housing contract they choose.

2) Could the data of income be drawn from the same population or are we possibly looking at 2 or maybe 3 different sample population.

3) F-calculated

4) F-Critical

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Solution Summary

The solution provides a detailed step-by-step ANOVA Analysis (formulation of null and alternate hypothesis, selection of significance level, choosing the appropriate test-statistic, decision rule, calculation of test-statistic and conclusion) of the given data.

Solution provided by:
Anwesha Ghosh, MSc
Education
  • MSc, Osmania University
  • MSc, Indian Institute of Technology - Roorkee (I.I.T.-ROORKEE)
  • BSc, Banaras Hindu University
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