iSixSigma

Contingency Table

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.

AccurateNot AccurateTotal
Equal or Less Than 3532376
Greater Than 37842120
Total13165196

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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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