Survey Methods for

Decision Making (SMDM)

PGDM (2023-25)
Term-III (Jan-Mar, 2025)

Ruchika
Assistant Professor, Operations
IMI, Delhi
Contents

•Contingency Table – Interpretation

• x2 Analysis
• t test for mean.
One sample test
Two independent samples test
Paired sample test
• A company selects eight salesman at random and
their sales figures for the previous months are
recorded.
• They then undergo a training course devised by a
business consultant, and their sales figures for the
following month are compared as given in table
12.11.
• Has the training course caused an improvement in
salesman ability? (You may use a .05 level of
significance.)
Non Parametric tests
Why Non parametric methods?
•Nonparametric methods require no or very
limited assumptions to be made about the
format of the data.

•Easy to apply, simple computations!

•Chi square is used for nominal data.
Fast food data (Table 11.7)
• Data on 100 respondents is given regarding their preference on fast
food.
• Preference data: Divide it in two groups forming two samples.
• 1-3 as “not a preferred choice” and 4-5 as “preferred.”
• Similarly redefine age as young respondents and older respondents
(break at 40).
• Now answer the following:
1. Prepare a cross tabulation table of the above mentioned groups on
their preference for fast food with age groups. Find the association
between age and preference for fast food.
Fast food data (Table 11.7)
2. Again, cross tabulate the preference for fast food against the income
level as defined earlier. Examine whether preference is related to
income.

3. Cross tabulate the above two groups against gender. Find out the
association between gender and preference for fast food.

Note: Null hypothesis in such cases would be, considered entities are
independent.
Rules for Statistics in chi square
• Phi: A value close to 0 means no association, while a value bigger
than 0.25 is named as a very strong relationship. No impact of
negative sign.
• Cramer's V: Must lie between 0 (reflecting complete independence)
and 1.0 (indicating complete dependence or association) between the
variables.
• In a 2 × 2 contingency table: Cramer's V is equal to the absolute value
of Phi coefficient.
• In more complicated designs: phi is not appropriate, but Cramer's
statistic is
Common Bivariate Tests

Differences among
Differences between
Type of Measurement three or more
two independent groups
independent groups

Independent groups: One-way

Interval and ratio
t-test or Z-test ANOVA
Common Bivariate Tests

Differences among
Differences between
Type of Measurement three or more
two independent groups
independent groups

Mann-Whitney U-test
Ordinal Kruskal-Wallis test
Wilcoxon test
Common Bivariate Tests

Differences among
Differences between
Type of Measurement three or more
two independent groups
independent groups

Z-test (two proportions)

Nominal Chi-square test
Chi-square test
Chi-Square Test

(Oi - Ei )²
x² = å
Ei
x² = chi-square statistics
Oi = observed frequency in the ith cell
Ei = expected frequency on the ith cell
Chi-Square Test

R iC j
E ij =
n
Ri = total observed frequency in the ith row
Cj = total observed frequency in the jth column
n = sample size
Degrees of Freedom
d.f.=(R-1)(C-1)
Differences Between Groups when
Comparing Means
• Ratio scaled dependent variables
• t-test
• When groups are small
• When population standard deviation is unknown
• z-test
• When groups are large
Null Hypothesis About Mean Differences
Between Groups

µ -µ
1 2

OR
µ -µ =0
1 2
t-Test for Difference of Means

mean 1 - mean 2
t=
Variability of random means
t-Test for Difference of Means

C1 - C 2
t=
S X1 - X 2
X1 = mean for Group 1
X2 = mean for Group 2
SX1-X2 = the pooled or combined standard error
of difference between means.
t-Test for Difference of Means

C1 - C 2
t=
S X1 - X 2
t-Test for Difference of Means

X1 = mean for Group 1

X2 = mean for Group 2
SX -X = the pooled or combined standard error
1 2
of difference between means.
Pooled Estimate of the
Standard Error

æ (n1 -1)S +(n2 -1)S

2 2
) öæ 1 1 ö
SX1-X2 = çç 1 2
÷÷çç + ÷÷
è n1 + n2 -2 øè n1 n2 ø
Pooled Estimate of the
Standard Error

S12 = the variance of Group 1

S22 = the variance of Group 2
n1 = the sample size of Group 1
n2 = the sample size of Group 2
 Pooled Estimate of the Standard Error
t-test for the Difference of Means

æ (n1 - 1)S + ( n2 - 1) S ) öæ 1
2 2
1 ö
S X1 - X 2 = çç 1
÷÷çç + ÷÷
2

è n1 + n2 - 2 øè n1 n2 ø

S12 = the variance of Group 1

S22 = the variance of Group 2
n1 = the sample size of Group 1
n2 = the sample size of Group 2