Background A 2 X 2 table is a simple way of representing relationships between two variables. A Chi-Square analysis is valuable for analyzing the relationship between two categorical variables. This analysis is used to determine whether the observed frequencies are due to random chance, or whether a statistical difference exists.
Application
A Chi-Square analysis is commonly used for analyzing opinion surveys or determining differences among types of customers. However, the application is as broad as your imagination. Recently, we used this tool to assess the relationship between personality types and job categories.
I also used this tool for investigating customer complaints. On the surface, customer complaints appeared randomly scattered across various defect types. However, when we analyzed the data by subgrouping the defects based upon product families we identified statistical differences in the complaints. The study spotlighted product design flaws that had been previously overlooked.
Summary
In business we often have a need for analyzing the relationship between two categorical variables. The Chi-Square analysis is an excellent tool for identifying whether a statistical relationship exists. However, the Chi-Square test is essentially a screening step. It will confirm whether a statistically significant relationship exists within the data, but you will require further analysis to identify the specific linkages.