analysis of variance anova is a statistical test used to assess the difference between the means of more than two groups at its core anova allows you to simultaneously compare arithmetic means across groups you can determine whether the differences observed are due to random chance or if they reflect genuine meaningful differences 
a one way anova uses one independent variable a two way anova uses two independent variables analysts use the anova test to determine the influence of independent variables on the dependent variable in a regression study while this can sound arcane to those new to statistics the applications of anova are as diverse as they are profound from medical researchers investigating the efficacy of new treatments to marketers analyzing consumer preferences anova has become an indispensable tool for understanding complex systems and making data driven decisions xiaojie liu investopediausing anovaan anova test can be applied when data needs to be experimental analysis of variance is employed if there is no access to statistical software and anova must be calculated by hand it s simple to use and best suited for small samples involving subjects test groups and between and among groups anova is like several two sample t tests however it results in fewer type i errors anova groups differences by comparing each group s means and includes spreading the variance into diverse sources analysts use a one way anova with collected data about one independent variable and one dependent variable a two way anova uses two independent variables the independent variable should have at least three different groups or categories anova determines if the dependent variable changes according to the level of the independent variable researchers might test students from several colleges to see if students from one of them consistently outperforms students from the other schools in a business application a research and development researcher might test two ways of creating a product to see if one is better than the other in cost efficiency anova s versatility and ability to handle multiple variables make it a valuable tool for researchers and analysts across various fields by comparing means and partitioning variance anova provides a robust way to understand the relationships between variables and identify significant differences among groups 