Example of Equivalence Tests for Relative Risk
Use the Contingency platform to test if the relative rate of not filing an auto claim is equivalent for young and elder drivers. You consider a relative risk between the groups of drivers to be equivalent for values between 0.8 and 1.25.
1. Select Help > Sample Data Folder and open Auto Raw Data.jmp.
2. Select Analyze > Fit Y by X.
3. Select Claim(Y/N) and click Y, Response.
4. Select AgeClass and click X, Factor.
5. Click OK.
6. Click the Contingency Analysis red triangle menu and select Equivalence Tests > Relative Risk.
7. In the Margin and Alpha panel, type 0.8 for the Ratio.
8. In the X Category of Interest panel, select Young.
9. Click OK.
Figure 7.17 Equivalence Test for Relative Risk
The relative risk of not filing a claim for young drivers versus elder drivers is 0.7118. From the two one-sided tests (TOST) equivalence test procedure, you cannot conclude that these groups are equivalent in their rates of filing claims.