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Dear Hans,

> I have 2 groups of subjects and I would like to compare them with a  
> t-test. I am interested in using Randomise since it generates the  
> near-exact null distribution for the test statistic in a non- 
> parametric way. My concern is about the first level variances (the  
> varcopes). Are these variances accounted for in randomise or does it  
> just consider between subjects variance?

Randomise doesn't explicitly use the varcopes, but that does _not_  
mean that it only considers between subject variance. The estimates  
you get from the first level are precisely estimates, i.e. they  
represent that particular subjects response with some first level  
error added on to it. Hence, when you are using only the copes you  
will enter in the responses of the different subjects (there is your  
between subject variance), and each of these responses will have some  
error/uncertainty (there is your with subject variance). So, even when  
performing an ordinary least squares (OLS) analysis using only the  
copes the first level error is taken into account.

The times when it is important to know something about the first level  
errors (i.e. the 1st level varcopes) is if/when the first level errors  
are vastly different between different subjects. This could happen  
e.g. of you want to look at correct responses in some memory task and  
subject 1 has 100 correct responses whereas subject 2 has 1 correct  
response. Then we can estimate subject 1's response with much higher  
precision and in a 2nd level analysis we would want to giver higher  
weight to that subject by weighting the response with the 1st level  
varcope.

> The other option that I can use is the standard FSL mixed effects  
> group analysis that will account for cope, varcope and dof plus the  
> between subjects variance.

If you are talking about 2nd level fMRI data I think either way is  
fine. We mainly use Randomise for the cases where we cannot assume  
that the 2nd level errors are normal distributed, such as e.g. VBM or  
TBSS. It is often also the case that Randomise is a little more  
sensitive when one has low degrees of freedom, in which case GRFT  
tends to be a little conservative.

Good luck Jesper