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Section 16.2 Summary of Inference for Relative Risk

For tables of the form:
RV \ EV \(Group 1\) \(Group 2\)
\(Success\) \(A\) \(B\)
\(Failure\) \(C\) \(D\)
\(Total\) \(A + C\) \(B + D\)

Relative Risk Procedures.

Statistic: Ratio of conditional proportions (typically set up to be larger than one) = \(\frac{\hat{p}_1}{\hat{p}_2}\)
Hypotheses: \(H_0\!: \frac{\pi_1}{\pi_2} = 1\text{;}\) \(H_a\!: \frac{\pi_1}{\pi_2} < 1\text{,}\) \(\frac{\pi_1}{\pi_2} > 1\text{,}\) or \(\frac{\pi_1}{\pi_2} \neq 1\)
p-value: Fisherโ€™s Exact Test or normal approximation on \(\ln\left(\frac{\hat{p}_1}{\hat{p}_2}\right)\)
Confidence interval for \(\frac{\pi_1}{\pi_2}\text{:}\) Exponentiate endpoints of
\begin{equation*} \ln\left(\frac{\hat{p}_1}{\hat{p}_2}\right) \pm z^*\sqrt{\frac{1}{A}-\frac{1}{A+C}+\frac{1}{B}-\frac{1}{B+D}} \end{equation*}
Technology:
See the Technology Detour for instructions on simulating random assignment for two-way tables.
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