EXAMPLE 9.9 Competitiveness and Flexibility

CASE 9.1 The single population studied is

  • Population: Austrian food and beverage companies

The researchers had a sample of 61 companies. They measured two categorical variables for each company:

  • Column variable: Flexibility (Adaptive, Parallel, or Preemptive)
  • Row variable: Competitive (Medium or High)

The null hypothesis for the chi-square test is

: The row variable and the column variable are independent.

The parameters of the model are the probabilities for each of the six possible combinations of values of the row and column variables. If the null hypothesis is true, the multiplication rule for independent events says that these can be found as the products of outcome probabilities for each variable alone.

Reminder

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multiplication rule for independent events, p. 188