What information does a contingency table provide?

Master Arizona State University's ECN221 Business Statistics Exam with our resources. Utilize flashcards and multiple-choice questions. Understand every concept with hints and explanations to excel in your exam!

A contingency table is a powerful tool in statistics used to analyze the relationship between two or more categorical variables. It provides a frequency distribution, showcasing how the different categories of one variable relate to the categories of another variable. For instance, if you were examining the relationship between gender (male, female) and a preference for a product (like or dislike), the contingency table would display counts of each combination—this allows for an immediate understanding of the data distribution across multiple categories.

By displaying counts or frequencies in a matrix format, the contingency table enables researchers and analysts to observe trends, patterns, or associations between the variables being studied. This is particularly useful in fields like marketing, psychology, and social sciences, where categorical data is prevalent, and understanding the interactions can yield valuable insights and guide decision-making.

Thus, the correct answer reflects the primary function of a contingency table in demonstrating the distribution of multiple categorical variables, allowing for a comprehensive view of the relationships among them.

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