Analyze Data
ANOVA Example
ANOVA (analysis of variance) is similar to t-tests in the sense that it can be used to determine whether the mean value for a particular variable varies between different groups. While t-tests are used when there are just two groups, ANOVA is used when there are multiple groups. For example, someone considering opening a retail store may obtain secondary data showing mean annual expenditure for the types of products that they intend to sell.
This information might be somewhat useful on its own, but it would be more useful to know whether this mean varies according to demographic characteristics such as where a person lives, how old they are, or how much money they make. If it does, that information could be used to determine the most advantageous location and promotional strategy for the new store.