Computing the Likelihood Ratio Statistic

The test itself is fairly simple. Begin by comparing the -2 Restricted Log Likelihoods for the two models. The test statistic is computed by subtracting the -2 Restricted Log Likelihood of the larger model from the -2 Restricted Log Likelihood of the smaller model. For these two models, that difference is 227.787 - 227.785 = 0.002. If the null hypothesis is true, then the test statistic has an approximately chi-squared distribution. To compute the degrees of freedom for that distribution, compare the model dimensions for the two models. The degrees of freedom are computed by subtracting the total number of parameters in the smaller model from the total parameters in the larger model. For these two models, that difference is 5 - 4 = 1. The significance value for this test is the probability that a chi-square random variate with 1 degree of freedom is larger than 0.002.

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