Solved – Comparing two groups: one-way ANOVA vs. regression analysis with dumthe

anovacategorical dataregression

I am a bit puzzled with the following issue: the outcome of one-way ANOVA test shows that the mean difference of variable y between two country samples is statistically significant. However, after pooling the two samples together and running an OLS regression with y as dependent variable, some other IV and by including a country dummy, the effect of the country dummy appears to be statistically insignificant, implying that there is no country-related effect on dependent variable y. Any explanation for this outcome?

Best Answer

If I'm right in guessing that the other IV was not included in the ANOVA, then the most likely reason is that the two countries differed on the other IV, and that the countries only look 'significant' if the other IV is omitted. I wonder if the other IV is 'significant'? With sufficient confounding, it may not be. One last (but I think unlikely) possibility is that when you added the IV you lost 1 degree of freedom, and so if the IV were totally unrelated to the response, you would have lost a trivial amount of statistical power.

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