Definition of Contingency Table:
An application used to test the relationship between two variables. For example, a financial research firm decides to investigate whether there is a relationship between reports that are completed in less than or equal to 3 days and those that make accurate predictions. The hypothesis is:
- H0 there is no relationship between less than or equal to 3-day completion and accurate predictions.
- H1 there is a relationship between less than or equal to 3-day completion and accurate predictions.
| Accurate | Not Accurate | Total | |
| Equal or Less Than 3 | 53 | 23 | 76 |
| Greater Than 3 | 78 | 42 | 120 |
| Total | 131 | 65 | 196 |
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The table allows us to glance at the proportion of reports that are less than or equal to 3 days and greather than 3 days versus accuracy and non-accuracy; however, the proportions are not equal so the statistical significance of the difference between the variables can be tested with formulas such as the Chi Square (or ‘Goodness of Fit’) test, G-test or Fisher’s exact test.
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