CHAPTER 1

Introduction

Definition of Statistics

In its plural sense, statistics is a set of numerical data (e.g., vital statistics in a
beauty contest, monthly sales of a company, daily P-$ exchange rate).

In its singular sense, statistics is that branch of science which deals with the
collection, presentation, analysis, and interpretation of data.

1.1 NATURE OF STATISTICS

General Uses of Statistics

a. Statistics aids in decision making

provides comparison
explains action that has taken place
justifies a claim or assertion
predicts future outcome
estimates unknown quantities

b. Statistics summarizes data for public use

Examples on the role of Statistics

In the biological and medical sciences, it can help researchers discover

relationships worthy of further attention.

Example: A doctor can use Statistics to determine to what extent is an increase in

blood pressure dependent upon age.

In the social sciences, it can guide and help researchers support theories and
models that cannot stand on rationale alone.
 Example: Empirical studies are using Statistics to obtain socio-economic
profile of the middle class to form new socio-political theories on classes as the
existing theories apparently are no longer valid.

In business, a company can use statistics to forecast sales, design products, and
produce goods more efficiently.

Example: A pharmaceutical company can apply statistical procedures to find out

if a new formula is indeed more effective than the one being used.
Results can help the company decide whether to market the new formula
or not.

In engineering, it can be used to test properties of various materials.

Example: A quality controller can use Statistics to estimate the average

lifetime of the products produced by their current equipment.

Fields of Statistics

a. Statistical Methods of applied Statistics refer to procedures and techniques used

in the collection, presentation, analysis and interpretation of data.

Descriptive Statistics - methods concerned with the

collection, description, and analysis of a set of data
without drawing conclusions or inferences about a
larger set
- the main concern is simply to describe the set of
data such that otherwise obscure information is
brought out clearly
- conclusions apply only to the data on hand

Inferential Statistics - methods concerned with

making predictions or inferences about a larger set
of data using only the information gathered from a
subset of this larger set
- the main concern is not merely to describe but
actually predict and make inferences based on the
information gathered
- conclusions are applicable to a larger set of data
which the data on hand is only a subset

b. Statistical Theory of Mathematical Statistics deals with the development and

exposition of theories that serve as bases of statistical methods.
 Descriptive Statistics vs. Inferential Statistics

Descriptive

A bowler wants to find his bowling average for the past 12 games

A housewife wants to determine the average weekly amount she spent on groceries
in the past 3 months

A politician wants to know the exact number of votes he received in the last election

Inferential

A bowler wants to estimate his chance af winning a game based on his current
season averages and the averages of his opponents

A housewife would like to predict based on last years grocery bills, the average
weekly amount she will spend on groceries for this year.

A politician would like to estimate, based on an opinion poll, his chance for winning
in the upcoming election.

1.2 POPULATION AND SAMPLE

Definition. A population is a collection of all the elements under consideration in a
statistical study.
 A sample is a part or subset of the population from which the information
is collected.

Example: A manufacturer of kerosene heaters wants to determine if customers are

satisfied with the performance of their heaters. Toward this goal, 5,000 of
his 200,000 customers are contacted and each is asked, Are you satisfied
with the performance of the kerosene heater you purchased? Identify the
population and the sample for this situation.

Definition. A parameter is a numerical characteristic of the population.

A statistic is a numerical characteristic of the sample.

Example: In order to estimate the true proportion of students at a certain college who
smoke cigarettes, the administration polled a sample of 200 students and
determined that the proportion of students from the sample who smoke
cigarettes is 0.12. Identify the parameter and the statistic.
Collection and Presentation of Data

2.1 PRELIMINARIES

Steps in Statistical Inquiry

1. Define the problem.

2. Formulate the research design.
3. Collect the data.
4. Code and analyze the collected data.
5. Interpret the results.

Variables and Measurement

Definition. A variable is a characteristic or attribute of persons or objects which can

assume different values or labels for different persons or objects under
consideration.

Definition. Measurement is the process of determining the value or label of a particular

variable for the particular experimental unit.

Definition. An experimental unit is the individual or object on which a variable is

measured.

Classification of Variables

1. Discrete vs. Continuous

Discrete Variable - a variable which can assume finite, or, at most,

countably infinite number of values; usually
measured by counting or enumeration.

Continuous Variable - a variable which can assume infinitely many

values corresponding to a line interval

2. Qualitative vs. Quantitative

Qualitative variable - a variable that yields categorical responses (e.g.,

political affiliation, occupation, marital status)

Quantitative variable - a variable that takes on numerical values

representing an amount or quantity (e.g., weight,
height, no. of cars)
Levels of Measurement

1. Nominal Level (or Classificatory Scale)

The nominal level is the weakest level of measurement where numbers or

symbols are used simply for categorizing subjects into different groups.

Examples:

Sex M-Male F-Female

Marital Status 1-Single 2-Married 3-Widowed 4-Separated

2. Ordinal Level (or Ranking Scale)

The ordinal level of measurement contains the properties of the nominal

level, and in addition, the number assigned to categories of any variable
maybe ranked or ordered in some low-to-high-manner.

Examples:
Teaching Ratings 1-poor 2-fair 3-good 4-excellent
Year Level 1-1st yr 2-2nd yr 3-3rd yr 4-4th yr

3. Interval level

The interval level is that which has the properties of the nominal and
ordinal levels, and in addition the distance between any two numbers on the
scale are of known sizes. An interval scale must have a common and
constant unit of measurement. Furthermore, the unit of measurement is
arbitrary and there is no true zero point.

Examples:

IQ
Temperature (in Celsius)

4. Ratio Level

The ratio level of measurement contains all the properties of the interval
level, and in addition, it has a true zero point.

Examples:

Age (in years)

Number of correct answers in an exam
Classification of Data

1. Primary vs. Secondary

a. Primary source - data measured by the researcher/agency that published it

b. Secondary source - any republication of data by another agency

2. External vs. Internal

Internal Data - information that relates to the operations and functions of the
organization collecting the data.

External Data - information that relates to some activity outside the organization
collecting the data

Example: The sales data of SM is internal data for SM but external data for any other
organization such as Robinsons.

DATA COLLECTION METHODS

Data Collection Methods

1. Survey Method - questions are asked to obtain information, either through

self-administered questionnaire or personal interview.

Self-administered questionnaire Personal interview

Obtained information is limited to Missing information and vague
subjects written answers to pre- responses are minimized with the proper
arranged questions. probing of the interviewer
Lower response rate Higher response rate through call-backs
It can be administered to a large It is administered to a person or group one
number of people simultaneously at a time
Respondents may feel freer to express Respondent may feel more cautious
views and are less pressured to answer particularly in answering sensitive
immediately questions for fear of disapproval
It is more appropriate for obtaining It is more appropriate for obtaining about
objective information complex emotionally-laden topics or
probing sentiments underlying an
expressed opinion
2. Observation Method - makes possible the recording of behavior but only at the
time of occurrence (e.g., observing reactions to a particular
stimulus, traffic count)

Advantages over Survey Method:

does not rely on the respondents willingness to provide information

certain types of data can be collected only by observation (e.g., behavior patterns
of which the subject is not aware of or is ashamed to admit)
the potential bias caused by the interviewing process is reduced or eliminated

Disadvantages over Survey Method:

things such as awareness, beliefs, feelings, and preferences cannot be observed

the observed behavior patterns can be rare or too unpredictable thus increasing
the data collection costs and time requirements

3. Experimental Method - a method designed for collecting data under controlled

conditions. An experiment is an operation where there is
actual human interference with the conditions that can
affect the variable under study. This is an excellent method
of collecting data for causation studies. If properly designed
and executed, experiments will reveal with a good deal of
accuracy, the effect of a change in one variable on another
variable.

4. Use of existing studies - e.g., census, health statistics, and weather bureau reports

Two Types:

documentary sources published or written reports, periodicals, unpublished

documents, etc.

field sources researchers who have done studies on the area of interest are asked
personally or directly for information needed

5. Registration Method - e.g., car registration, student registration, and hospital

admission

General Classification of Collecting Data

General Classification of collecting data

Definition. Census or complete enumeration is the process of gathering information

from every unit in the population.

not always possible to get timely, accurate and economical data

costly, especially if the number of units in the population is too large

Definition. Survey sampling is the process of obtaining information from the units in
the selected sample.

Advantages of Survey Sampling:

reduced cost
greater speed
greater scope
greater accuracy

PROBABILITY AND NON-PROBABILITY SAMPLING

Definition. A sampling procedure that gives every element of the population a (known)
nonzero chance of being selected on the sample is called probability
sampling. Otherwise, the sampling procedure is called non-probability
sampling.

Whenever possible, probability sampling is used because there is no

objective way of assessing the reliability of inferences under non-
probability sampling.

Definition. The target population is the population from which information is desired.

Definition. The sampled population is the collection of elements from which the
sample is actually taken.

Definition. The population frame is a listing of all the individual units in the population.

Methods of Non-probability Sampling

Methods of Non-probability Sampling

 1. purposive sampling - sets out to make a sample agree with the profile of
the population based on some pre-selected
characteristic

2. quota sampling - selects a specified number (quota) of sampling

units possessing certain characteristics

3. convenience sampling - selects sampling units that come to hand or are

convenient to get information from

4. judgment sampling - selects sample in accordance with an experts

judgment

Methods of Probability Sampling

1. Simple random sampling

2. Stratified random sampling

3. Systematic sampling

4. Cluster sampling

5. Multistage sampling

6. Sequential sampling - units are drawn one by one in a sequence without

prior fixing of the total number of observations and
the results of the drawing at any stage are used to
decide whether to terminate sampling or not
 Simple Random Sampling

Description of the Design

Simple random sampling (SRS) is a method of selecting n units out of the N units in the
population in such a way that every distinct sample of size n ha s an equal chance of being
drawn. The process of selecting the sample must give an equal chance of selection to anyone
of the remaining elements in the population at any one of the n draws.

Random sampling may be with replacement (SRSWR) or without replacement (SRSWOR).

In SRSWR, a chosen element is always replaced before the next selection is made, so that
an element may be chosen more than once.

Sample Selection Procedure

Step 1: Make a list of the sampling units and number them from 1 to N.

Step 2: Select n numbers from 1 to N using some random process, for example, the table of
random numbers. n is distinct for SRSWOR, not necessarily distinct for SRSWR.

Step 3: The sample consist of the units corresponding to the selected random numbers.

Advantages

The theory involved is much easier to understand than the theory behind other sampling
designs.

Inferential methods are simply and easy.

Disadvantages

The sample chosen may be widely spread, thus entailing high transportation costs.

A population frame is needed.

SRS results in less precise estimates if the population is heterogeneous with respect to
the characteristic under study.

Simple Random Sampling

Description of the Design

Simple random sampling (SRS) is a method of selecting n units out of the N units in the
population in such a way that every distinct sample of size n ha s an equal chance of being
drawn. The process of selecting the sample must give an equal chance of selection to anyone
of the remaining elements in the population at any one of the n draws.

Random sampling may be with replacement (SRSWR) or without replacement (SRSWOR).

In SRSWR, a chosen element is always replaced before the next selection is made, so that
an element may be chosen more than once.

Sample Selection Procedure

Step 1: Make a list of the sampling units and number them from 1 to N.

Step 2: Select n numbers from 1 to N using some random process, for example, the table of
random numbers. n is distinct for SRSWOR, not necessarily distinct for SRSWR.

Step 3: The sample consist of the units corresponding to the selected random numbers.

Advantages

The theory involved is much easier to understand than the theory behind other sampling
designs.

Inferential methods are simply and easy.

Disadvantages

The sample chosen may be widely spread, thus entailing high transportation costs.

A population frame is needed.

SRS results in less precise estimates if the population is heterogeneous with respect to
the characteristic under study.

Stratified of the Sample

Description of the Design
In stratified random sampling, the population of N units is first divided into subpopulations
called strata. Then a simple random sample is drawn from each stratum, the selection being
made independently in different strata.

Sample Selection Procedure

Step 1: Divide the population into strata. Ideally, each stratum must consist of more or less
homogenous units.

Step 2: After the population has been stratified, a simple random sample is selected from
each stratum.

Advantages

Stratification may produce a gain in precision in the estimates of characteristics of the

population.

It allows for more comprehensive data analysis since information is provided for each
stratum.

It is administratively convenient.

Disadvantages

A listing of the population for each stratum is needed.

The stratification of the population may require additional prior information about the
population and its strata.

(1-in-k) Systematic Sample

Description of the Design
Simple random sampling (SRS) is a method of selecting n units out of the N units in the
population in such a way that every distinct sample of size n ha s an equal chance of being
drawn. The process of selecting the sample must give an equal chance of selection to anyone
of the remaining elements in the population at any one of the n draws.

Random sampling may be with replacement (SRSWR) or without replacement (SRSWOR).

In SRSWR, a chosen element is always replaced before the next selection is made, so that
an element may be chosen more than once.

Sample Selection Procedure

Step 1: Make a list of the sampling units and number them from 1 to N.

Step 2: Select n numbers from 1 to N using some random process, for example, the table of
random numbers. n is distinct for SRSWOR, not necessarily distinct for SRSWR.

Step 3: The sample consist of the units corresponding to the selected random numbers.

Advantages

The theory involved is much easier to understand than the theory behind other sampling
designs.

Inferential methods are simply and easy.

Disadvantages

The sample chosen may be widely spread, thus entailing high transportation costs.

A population frame is needed.

SRS results in less precise estimates if the population is heterogeneous with respect to
the characteristic under study.

Stratified Random Sampling

Cluster Sample
Description of the Design
Cluster sampling is a method of sampling where a sample of distinct groups, or clusters, of
elements is selected and then a census of every element in the selected cluster is taken.
Similar to strata in stratified sampling, clusters are non-overlapping sub-populations which
together comprise the entire population. For example, a household is a cluster of individuals
living together or a city block might also be considered as a cluster. Unlike strata, however,
clusters are preferably formed with heterogeneous, rather than homogenous elements so that
each cluster will be typical of the population.

Clusters maybe of equal or unequal size. When all of the clusters are of the same size, the
number of elements in a cluster will be denoted by M while the number of clusters in the
population will be denoted by N.

Sample-Selection procedure

Step 1: Number the clusters from 1 to N.

Step 2: Select n numbers from 1 to N at random. The clusters corresponding to the selected
numbers from the sample of the clusters.

Step 3: Observe all the elements in the sample of the clusters.

Advantages

A population list of elements is not needed; only a population list of clusters is required.
Thus, listing cost is reduced.

Transportation cost is also reduced.

Disadvantages

The cost and problems of statistical analysis are greater.

Estimation procedures are more difficult.

2.4 TABULAR AND GRAPHICAL PRESENTATION OF DATA

Textual Presentation

data incorporated to a paragraph of text

Example

At last count, 38 airlines were operating Boeing 707s, 720s, and 727s over the
worlds airlines. The far flung Boeing fleet has now logged an estimated 1,803,704,000
miles (22,855,948,000 kms.) and has massed approximately 4,096,000 revenue flight
hours. Passenger totals stand at upwards of 71.6 million.

Advantages

This presentation gives emphasis to significant figures and comparisons.

It is simples and most appropriate approach when there are only a few numbers to
be presented.

Disadvantages

When a large mass of quantitative data are included in a text or paragraph, the
presentation becomes almost incomprehensible.
Paragraphs can be tiresome to read especially if the same words are repeated so many
times.

Tabular Presentation

the systematic organization of data in rows and columns

Advantages

more concise than textual presentation

easier to understand
facilitates comparison and analysis of relationship among different categories
presents data in greater detail than a graph

16 CHAPTER 2. COLLECTION & PRESENTATION OF DATA

 Parts of a Formal Statistical Table

1. Heading - consists of a table number, title, and headnote. The title is a brief
state of the nature, classification and time reference of the
information presented and the area to which the statistics refer.
The headnote is a statement enclosed in brackets between the
table that provides additional title information.

2. Box Head - the portion of the table that contains the column heads which describe
the data in each column, together with the needed classifying and
qualifying spanner heads.

3. Stub - the portion of the table that usually comprising the first column on
the left, in which the stubhead and row captions, together with
the needed classifying and qualifying center head and subheads
are located. The stubhead describes the stub listing as a whole in
terms of the classification presented. The row caption is a
descriptive title of the data on the given line.

4. Field - main part of the table; contains the substance or the figures of ones
data

5. Source note - an exact citation of the source of data presented in the table; (should
always be placed when the figures are not original)

6. Foot note - any statement or note inserted at the bottom of the table

heading Table 4.4 CRIME VOLUME AND RATE BY TYPE: 1991 1993
(Rate per 100,000 population)

Type 1991 1992 1993

boxhead
Volume Crime Volume Crime Volume Crime
Rate Rate Rate

Total 121,326 195 104,719 164 96,686 148

Index Crimes 77,261 124 67,354 106 58,684 90

stub Murder 8,707 14 8,293 13 7,758 12
Homicide 8,069 13 7,912 12 7,123 11
Physical Injury 21,862 35 20,462 32 18,722 29 field
Robbery 13,817 22 11,134 18 9,856 15
Theft 22,780 37 17,374 27 12,940 20
Rape 2,026 3 2,149 3 2,285 4

Nonindex Crimes 44,065 71 37,365 59 38,002 58

Source: Philippine National Police

Guidelines

The title should be concise, written in telegraphic style, not in complete sentence.

Column labels should be precise. Stress differences rather than similarities between
adjacent columns should not begin nor end with the same phrase. This is frequently a
signal that a spanner head is needed.

The arrangement of lines in the stub depends on the nature of classification, purpose of
presentation or limitations of space.

Categories should not overlap.

The units of measure should be clearly stated.

Show any relevant total, subtotals, percentage, etc.

Indicate if the data were taken from another publication by including a source note.

Tables should be self-explanatory, although they may be accompanied by a paragraph

that will provide an interpretation or direct attention to important figures.

Graphical Presentation
 a graph or chart is a device for showing numerical values or relationships in pictorial
form

Advantages

main feature and implications of a body of data can be grasped at a glance

can attract attention and hold the readers interest
simplifies concepts that would otherwise have been expressed in so many words
can readily clarify data, frequently bring out hidden facts and relationships

Qualities of a Good Graph

1. Accuracy - A good chart should not be deceptive, distorted,

misleading, or in anyway susceptible to wrong interpretations as a
result of inaccurate or careless construction. Also, care should be
taken so as not to create any optical illusion.

2. Clarity - An effective chart can be easily read and understood.

The graph should focus on the message it is trying to communicate.
There should be an unambiguous representation of the facts. The
graph must be able to aid the reader in the interpretation of facts.

3. Simplicity - The basic design of a statistical chart should be

simple, straight-forward, not loaded with irrelevant, superfluous, or
trivial symbols and ornamentation. There should be no distracting
elements in a chart that inhibit effective visual communication.

4. Appearance - A good chart is one that is designed and constructed

to attract and hold attention by holding a neat, dignified and
professional appearance. It must be artistic in that it embodies
harmonious composition, proportion, and balance.

ELEMENTARY STATISTICS 19
Common Types of Graph

1. Line Chart graphical presentation of the data especially useful for showing trends
over a period of time.

Market Shares of Leading Softdrinks in Metro Manila:

1989-1995

50

40
% Shares

30
Coca-cola
Pepsi
20

10

0
1989 1990 1991 1992 1993 1994 1995
Year

2. Pie Chart - a circular graph that is useful in showing how a total quantity is
distributed among a group of categories. The pieces of the pie represent the
proportions of the total that fall into each category.

Sarsi, 5% 7-up, 8%
Sprite, 5%

Others, 12%

Coca-cola,
40%

Pepsi, 30%

20 CHAPTER 2. COLLECTION & PRESENTATION OF DATA

 3. Bar Chart consist of a series of rectangular bars where the length of the bar
reprersents the quantity or frequency for each category if the bars are arranged
horizontally. If the bars are arranged vertically, the height of the bar represents the
quantity.

Market Shares of Softdrinks in Metro Manila

Others

Sprite

Sarsi

7-up

Pepsi

Coca-cola

0 10 20 30 40 50
Market Shares (in %)

4. Pictorial unit chart a pictorial chart in which each symbol represents a

definite and uniform value.

Growth Pattern of Philippine Population: 1960 2000

Year
2000
1999
1998
1997
1996

1995
1990*
1980*
1975*
1970*
1960*

Note: Based on Series 2: Moderate Fertility and Mortality Decline

Population Projection
* Censual Year

2.5 THE FREQUENCY

10 Million DISTRIBUTION TABLE
Definition. The raw data is the set of data in its original form.

Example: Final grades of Stat 101 Students

82 82 83 79 72 71 84 59 77 50 87
83 82 63 75 50 85 76 79 68 69 62
79 69 74 53 73 71 50 76 57 81 62
72 88 84 80 68 50 74 84 71 73 68
71 80 72 60 81 89 94 80 84 81 50
84 76 75 82 76 53 91 69 60 89 79
a 62 79 82 72 81 60 84 68 66 94
77 78 87 75 86 82 74 73 72 84 51
50 69 75 70 77 87 86 77 75 96 66
87 73 84 68 85 62 87 92 69 52 65

Definition. An array is an arrangement of observations according to their magnitude,

either in increasing or decreasing order.

Example: Final grades of Stat 101 Students arranged in array

50 57 63 69 72 74 77 80 82 84 87
50 59 65 69 72 75 77 80 82 84 87
50 59 66 69 72 75 77 80 82 85 88
50 60 66 69 72 75 77 81 83 86 89
50 60 68 70 73 75 78 81 83 86 89
50 60 68 71 73 75 79 81 84 86 91
51 62 68 71 73 76 79 81 84 87 92
52 62 68 71 73 76 79 82 84 87 94
53 62 68 71 74 76 79 82 84 87 94
53 62 69 72 74 76 79 82 84 87 96

Advantages

easier to detect the smallest and largest value

easier to find the measures of position

22 CHAPTER 2. COLLECTION & PRESENTATION OF DATA

In the construction of a frequency distribution, the various items of a series are classified
into groups. The frequency distribution table shows the number of items falling into each
group.

Definition of terms

1. Class frequency - the number of observations falling in the class

2. Class interval - the number defining the class
3. Class limits - the end of numbers of the class
4. Class boundaries - the true class limits; the lower class boundary (LCB) is usually defined
as halfway between the lower class limit of the class and the upper
class limit of the preceding class while the upper class boundary
(UCB)is usually defined as halfway between the upper class limit
of the class and the lower class limit of the next class

5. Class size - the difference between the upper class boundaries of the class and
the preceding class; can also be computed as the difference between
the lower class boundaries of the current class and the next class;
can also be computed by using the respective class limits instead of
the class boundaries
6. Class mark ( CM) - midpoint of a class interval
7. Open-end class - a class that has no lower limit or upper limit

Examples:

Class Freq. LCB UCB CM

50-55 10 49.5 55.5 52.5
56-61 6 55.5 61.5 58.5
62-67 8 61.5 67.5 64.5
68-73 24 67.5 73.5 70.5
74-79 22 73.5 79.5 76.5
80-85 24 79.5 85.5 82.5
86-91 12 85.5 91.5 88.5
92-97 4 91.5 97.5 94.5

OR
Class Freq. LCB UCB CM
50-54 10 49.5 54.5 52
55-59 3 54.5 59.5 57
60-64 8 59.5 64.5 62
65-69 13 64.5 69.5 67
70-74 17 69.5 74.5 72
75-79 19 74.5 79.5 77
80-84 22 79.5 84.5 82
85-89 13 84.5 89.5 87
90-94 4 89.5 94.5 92
95-99 1 94.5 99.5 97

Steps in Constructing a Frequency Distribution Table

1. Determine the number of classes. There must be an adequate number of classes to

show the essential characteristics of the data; at the same time, there should not be
 too many classes that is already difficult to grasp the picture of the distribution as a
whole. There are no precise rules concerning the optimal number of classes but
Sturges formula can be used as a first approximation.

Sturges formula: K = 1 + 3.322 log n

= approximate number of classes
n = number of observations

2. Determine the approximate class size. Whenever possible, all classes should be of
the same size. The following steps can be used to determine the class size.

Solve for the range, R = max min

Compute for C = R K
Round-off C to a convenient number to work with, say C, and use C as the
class size.

3. Determine the lowest class limit. The first class must include the smallest value in
the data set.

4. Determine all class limits by adding the class size, C, to the limit of the previous
class.

5. Tally the frequencies for each class. Sum the frequencies and check against the
total number of observations.

Variations of the Frequency Distribution

1. Relative Frequency (RF) Distribution and Relative Frequency Percentage

(RFP)

RF = class frequency no. of observations

RFP = RF * 100%

2. Cumulative Frequency Distribution (CFD)

- shows the accumulated frequencies of successive classes, beginning at
either end of the distribution

Greater than CFD shows the no. of observations greater than the LCB
Less than CFD shows the no. of observations less than the USB

24 CHAPTER 2. COLLECTION & PRESENTATION OF DATA

 Example:

Class Freq. LCB UCB RF RFP <CF >CF

50-54 10 49.5 54.5 .09 9 10 110

55-59 3 54.5 59.5 .03 3 13 100
60-64 8 59.5 64.5 .07 7 21 97
65-69 13 64.5 69.5 .12 12 34 89
70-74 17 69.5 74.5 .15 15 51 76
75-79 19 74.5 79.5 .17 17 70 59
80-84 22 79.5 84.5 .20 20 92 40
85-89 13 84.5 89.5 .12 12 105 18
90-94 4 89.5 94.5 .04 4 109 5
95-99 1 94.5 99.5 .01 1 110 1

Graphical Presentation of the Frequency Distribution Table

1. Frequency Histogram a bar graph that displays the classes on the horizontal axis
and the frequencies of the classes on the vertical axis; the vertical lines of the bars
are erected at the class boundaries and the height of the bars correspond to the class
frequency.

25

20
No. of Students

15

10

0
49.5 54.5 59.5 64.5 69.5 74.5 79.5 84.5 89.5 94.5 99.5
Grades

ELEMENTARY STATISTICS 25
 2. Relative Frequency Histogram a graph that displays the classes on the horizontal
axis and the relative frequencies on the vertical axis.

Note: The relative frequency histogram has the same shape as the frequency
histogram but has a different vertical axis

0.25

0.2
Relative Freq.

0.15

0.1

0.05

0
49.5 54.5 59.5 64.5 69.5 74.5 79.5 84.5 89.5 94.5 99.5
Grades

3. Frequency Polygon a line chart that is constructed by plotting the frequencies at

the class marks and connecting the plotted points by means of straight lines; the
polygon is closed by considering an additional class at each end and the ends of the
lines are brought down to the horizontal axis at the midpoints of the additional
classes.

25

20
No. of Students

15

10

0
47 52 57 62 67 72 77 82 87 92 97 102
Grades

26 CHAPTER 2. COLLECTION & PRESENTATION OF DATA

 4. Ogives graphs of the cumulative frequency distribution

a. < ogive the <CF is plotted against the UCB

b. > ogive the >CF is plotted against the LCB

120
Cumulative Frequency

100

80
< ogive
60
> ogive
40

20

0
.5 .5 .5 .5 .5 .5
44 54 64 74 84 94
Grades

2.6 THE STEMAND-LEAF DISPLAY

The stem- and- leaf display is an alternative method for describing a set of
data. It presents a histogram like picture of the data, while allowing the
experimenter to retain the actual observed values of each data point. Hence, the stem
and leaf display is partly tabular and partly graphical in nature.

In creating a stem and leaf display, we divide each observation into two
parts, the stem and the leaf. For example, we could divide the observation 244 as
follows:

Stem Leaf Grades

2 44

Alternatively, we could chose the point of division between the units and tens,
whereby

Stem Leaf
24 4

The choice of the stem and leaf coding depends on the nature of the data set.
ELEMENTARY STATISTICS 27
Steps in Constructing the Stem and Leaf Display

1. List the stem values, in order, in a vertical column.

2. Draw a vertical line to the right of the stem

3. For each observation, record the leaf portion of that observation in the row corresponding
to the appropriate stem

4. Reorder the leaves from lowest to highest within each stem row. Maintain uniform
spacing for the leaves so that the stem with the most number of observations has the
longest line.

5. If the number of leaves appearing in each row is too large, divide the stem into two
groups, the first corresponding to leaves beginning with digits 0 through 4 and the
second corresponding to leaves beginning with digits 5 through 9. this subdivision can
be increased to five groups if necessary.

6. Provide a key to your stem and leaf coding so that the reader can recreate the actual
measurements from your display.

Example: Typing speeds (net words per minute) for 20 secretarial applicants

68 72 91 47
52 75 63 55
65 35 84 45
58 61 69 22
46 55 66 71

Stem Leaf (unit =1)

2 2
3 5
4 5 6 7
5 2 5 5 8
6 1 3 5 6 8 9
7 1 2 5
8 4
9 1

Note: The stem- and leaf display should include a reminder indicating the units of the data
value.

Example:
Unit = 0.1 1 2 represents 1.2
Unit = 1 1 2 represents 12
Unit = 10 1 2 represents 120

CHAPTER 4
Measures of Dispersion
and
Measures of Skewness

Definition. Measures of Dispersion indicate the extent to which individual items in a

series are scattered about an average.

Some Uses for Measuring Dispersion

to determine the extent of the scatter so that steps maybe taken to control the
existing variation

used as a measure of reliability of the average value

General Classification of Measures of Dispersion

1. Measures of Absolute Dispersion

2. Measures of Relative Dispersion

MEASURES OF ABSOLUTE DISPERSION

Measures of absolute dispersion are expressed in the units of the original

observations. They cannot be used to compare variations of two data sets when the
averages of these data sets differ a lot in value or when the observations differ in units of
measurement.

The Range

Definition. The range of set measurements is the difference between the largest and the
smallest values.

Range = maximum minimum

The range is approximated from a frequency distribution by getting the difference

between the upper class limit of the highest class interval and the lower class limit of the
lowest class interval.

.
ELEMENTARY STATISTICS 29
Some Results on Summation

1. The summation of the sum of variables is the sum of their summations.

n n n

( X i Yi ) X i Y1
i 1 i 1 i 1

n n n n

(a b ... z ) a b ... z
i 1
i i i
i 1
i
i 1
i
i 1
i

2. If c is a constant, then

n n

cX i c X i
i 1 i 1

3. If c is a constant then

c nc
i 1

Examples

Given:

i 1 2 3 4
Xi 2 4 6 8
Yi 1 2 1 2

Show :

3 4 4
1. X
i 2
i 10 4. X Y
i 1
i
i 1
i 120

3 4
Xi
2. ( X i Yi ) 13
i2
5. Y
i 1 i
14

4 X i
20
3. X iYi 32 6. i 1
n
31
3
Y
i 1 6
i
i 1

CHAPTER 3
Measures of Central Tendency
and
Measures of Location

Definition. A measure of central tendency is any single value that is used to identify
the center or the typical value of the data set. It is often referred to as the
average.

Characteristic of a Good Average

2. easily understood
- not a distant mathematical abstraction

3. objective and rigidly defined

- should encounter no question as to what the value is

4. stable
- not affected materially by minor variations in the groups of items

5. easily amenable to further statistical computation

3.1 NOTATIONS AND SYMBOLS

Suppose that a variable X is the variable of interest, and that n measurements are
taken. The notation X1, X2, . . . . ,Xn will be used to represent the n observations.

Let the Greek letter indicate the summation of, thus, we can write the sum of n

observations as

The numbers 1 and n are called the lower and the upper limits of summation,
respectively.

30 CHAPTER 3. MEASURES OF CENTRAL TENDENCY

AND MEASURES OF LOCATION
3.2 THE ARITHMETIC MEAN

- the most common average

- the sum of all values of the observations divided by the number of observations
- simply referred as the mean

The population mean for a finite population with N elements, denoted by the Greek

X i
letter (mu) is computed as = i 1
N

___ ___ X i
The sample mean X (read as X bar) of n observations is computed as X i 1
n

The sample mean (a statistic) is an estimate of the unknown population mean (a parameter).

Examples:

1. The number of employees at 5 different drug stores are 10, 12, 6, 8, and 4. Treating the data as a
population, find the mean number of employees for the 5 stores.

2. Scores in the Statistics 102 first exam for a sample of 10 students are as follows:
60, 55, 30, 90, 88, 79, 45, 66, 93, and 80. Find the mean.

3. Refer to the example on the final grades of 110 Statistics 101 students. The sample mean is given
n

___ X i
by X i 1
74.1
110

ELEMENTARY STATISTICS 31
Definition. The weighted mean is a modification of the usual mean that assigns weights
(or measures of relative importance) to the observations to be average. If
each observation Xi is assigned a weight Wi i = 1, 2,, n,
n

___ W X 1 1
the weighted mean is given by X i 1
n

W i 1
1

Examples:

1. Suppose a teacher assigns the following weights to the various course requirements:

Assignment 15%
Project 25%
Midterm Exam 20%
Final Exam 40%

The maximum score a student may obtain for each component is 100. Jeffry obtains
marks of 83 for assignments, 72 for the project, 42 for the midterm exam, and 47 for the
final exam. Find his mean mark for the course.

2. Alexs grades for the second semester AY 1996-1997 are as follows:

History 1.0
Humanities 1.0
Math 19 3.0
Math 53 3.0
Philosophy 1.0

Math 53 is a 5-unit course and all others are 3-unit course. Find Alexs GWA for the
semester

32 CHAPTER 3. MEASURES OF CENTRAL TENDENCY

AND MEASURES OF LOCATION

Characteristics of the Mean

 1. It is most familiar measure used, and employs all available information.

2. It is affected by the value of every observation. In particular it is strongly influenced

by extreme values.

3. Since the mean is calculated number, it may not be an actual number in the data set.

4. Is possesses two mathematical properties that will prove to be important in

subsequent analyses.

i) The sum of the deviations of the values from the mean is zero.
ii) The sum of the squared deviations is minimum when the deviations are taken
from the mean.

5. a. If a contract c is added (subtracted) to all observations, the mean of the new

observations will increase (decrease) by the same amount c.

b. If all observations are multiplied or divided by a constant, the new observations

will have a mean that is the same constant multiple of the original mean.

Example:

Given t5 temperature readings measured in Fahrenheit: 98, 100, 107, 90, 92. The
___
mean temperature is X F = 97.4.

___
5
The mean temperature is centigrade is X c (97.4 32) 36.3
9

___ fX 1 1
Xc i 1
n

Where fi = frequency of the ith class

Xi = the class mark of the ith class
k = total number of classes

k
n = total number of observations = f
i 1
1

ELEMENTARY STATISTIC 33

Example: Final grade of 110 Statistics 101 students

 C lass Freq. CM fi Xi
(Fi) (Xi)
50 - 54 10 52 520
55 - 59 3 57 171
60 - 64 8 62 496
65 - 69 13 67 871
70 - 74 17 72 1224
75 - 79 19 77 1463
80 - 84 22 82 1804
85 - 89 13 87 1131
90 - 94 4 92 368
95 - 99 1 97 97
Total 110 8145

10

___ fX i i
8145
X i 1
10
74.0
f
110
i
i 1

Remarks:

1. The formula for approximating the mean cannot be used if a frequency distribution has
openended intervals, unless there are reasonably accurate estimates of the class for the
open intervals.

2. The mean of frequency distribution is simply a weighted mean of the class marks, where
the fi `s are the weights.

34 CHAPTER 3. MEASURES OF CENTRAL TENDENCY

AND MEASURES OF LOCATION

3.3 THE MEDIAN

 - The positional middle of the arrayed data
- In an array, one half of the values precede the median and one half follow it

The first step in calculating the median, denoted as Md, is to arrange the data in an
array.

Let X(i) be ith median observation in the array, i = 1, 2,,n

If n is odd, the median position equals (n+1) /2, and the value of the (n+1)/2 th observation
in the array is taken as the median, i.e.,

Md = X([n+1]/2)

If n is even, the mean of the two middle values in the array is the median, i.e.,

X ( n/ 2) X (( n / 2)1)
Md
2

Examples:

1. Given the following heights (in inches): 71, 72. 75, 75, and 67. Find the median height.

2. Given the following scores: 1, 7, 3, 3. 6, 5, 4, 3, find the median scores.

3. Refer to the example on the grades of 110 Statistics 101 students. The median is given by
X (55) X (56) 75 75
Md 75
2 2

Characteristics of the Median:

1. The median is a position measure.

2. The median is affected by the position of each item in the series but not by the value of
each item. This means that extreme values affect the median less than the arithmetic
mean.

ELEMENTARY STATISTICS 35

Approximating the Median from the Frequency Distribution

- possible only when the values of the observations falling in the median can be assumed
to be evenly spaced throughout the class. (The median class is the class containing the
median.)

Step 1. Construct the less than cumulative frequency distribution.

Step 2. Starting from the top, locate the class with less than cumulative frequency greater
than or equal to n/2 for the first time. This class is the median class.
Step 3. Approximate the median using the following formula:

n / 2 CFmd 1
Md LCBmd c
f md

Where LCBmd = the lower class boundary of the median class

c = class size of the median class.
n = the total number of observations in the distribution
<CF md -1 = less than cumulative freq. of the class preceding the median class
fmd = frequency of the median class

Example:

Refer to the example on the final grades 110 Statistics 101 students.

Class Freq. <CF

50 - 54 10 10
55 - 59 3 13
60 - 64 8 21
65 - 69 13 34
70 74 17 51 <cum.freq.
Median Class greater than n/2=55
75 79 19 70
for the first time
80 - 84 22 92
85 - 89 13 105
90 - 94 4 109
95 - 99 1 110

(110 / 2 51
Md 74.5 5 75.6
19
3.4 THE MODE

the observed value that occurs most frequently

locates the point where the observation values occur with the greatest density
generally a less popular measure than the mean or the median
The mode is determined by counting the frequency of each value and finding the value
with the highest frequency of occurrence.

Examples:

2. 2, 5, 2, 3, 5, 2, 1, 4, 2, 2, 2, 1, 2, 2, 2, 3, 2, 2, 2, 2

3. 2, 5, 5, 2, 2, 5, 1, 3, 5, 4, 2, 5, 5, 2, 2, 5, 5, 2, 2, 1

4. 1, 2, 3, 3, 2, 1, 2, 3, 1, 4, 4, 5, 5, 1, 2, 3, 4, 5, 4, 5

5. Refer to the example on the final grades of 110 Statistics 101 students. The mode
is Mo = 84.

Characteristics of the Mode:

1. It does not always exist; and if it does, it may not be unique. A data is set to be
unimodal if there is only one mode, bimodal if there are two modes, trimodal if
there are three modes, and so on.

2. It is not affected by extreme values.

3. The mode can be used for qualitative as well as quantitative data.

ELEMENTARY STATISTICS 37

Approximating the Mode from the Frequency Distribution

Step 1: Locate the model class. The model class with the highest frequency.

Step 2: Approximate the mode using the following formula:

f mo f i
Mo LCBmo
mo 1
2 f f f 2

where LCBmo = lower class boundary of the modal class

c = class size of the modal class
fmo = frequency of the modal class
f1 = frequency of the class preceding the modal class
f2 = frequency of the class following the modal class

Example:

Refer to the example of the final grades of 110 Statistics 101 students

Class Freq.
50-54 10
59-59 3
60-64 8
69-69 13
70-74 17
75-79 19
Modal class 80-84 22
85-89 13
90-94 4
95-99 1

22 19
Mo 79.5 5 80.8
2(22) 19 19

38 CHAPTER 3. MEASURES OF CENTRAL TENDENCY

AND MEASURE OF LOCATION

3.5 MEASURES OF LOCATION

Definition. Measures of location (or fractiles/quantiles) are values below which a specified
fraction or percentage of the observations in a given set must fall.

Definition. Percentiles are values that divide a set of observations in an array into 100 equal
parts. Thus,

P1, read as first percentile, is the value below which 1% of the values fall.

P2, read as second percentile, is the value below which 2% of the values fall.

P99, read as ninety-ninth percentile, is the value below which 99% of the values fall.

To compute for the ith percentile:

i (n 1)
Pi = the value of the
100
th observation in the array

Approximating the ith Percentile from the Frequency Distribution

(in / 100) CFPi1

Pi LCBPi c
f Pi

where LCBPi = the lower class boundary of the Pith class

c = the class size of the Pith class
n = the total number of the observations in the distribution
<CF Pi 1 = the less than cumulative frequency of the class preceding the Pith class
fPi = frequency of the Pith class

The Pi th class is the class where the less than cumulative frequency is equal to, or exceeds for
the first time, in/100

Other Forms of Fractiles:

1. Deciles
- Values that divide the array into 10 equal parts. Thus,

D1, read as first decile, is the value below which 10% of the values fall.
D2, read as second decile, is the value below which 20% of the values fall.



D9, read as ninth decile, is the value below which 90% of the values fall.

2. Quartiles

- values that divide the array into 4 equal parts. Thus,

Q1, read as first quartile, is the value below which 25% of the values fall.
Q2, read as second quartile, is the value below which 50% of the values fall.
Q3, read as third quartile, is the value below which 75% of the values fall.

Examples: Use the data on Stat 101 final grades

a.) Ungrouped data b.) Grouped data

1. P90 = X(90*[110+1]/100) 1. P90 = 84.5 + 5x (99-92)/13

= X(99.9) = 87.2
= X(99) + 0.9[X(100)- X(99)]
= 87 + 0.9(87-87) = 87

2. D3 = 69 2. D3 = 69.1

3. Q2 = 75 3. Q2 = 75

1. The IQs of 5 members of a certain family are 108, 112, 127, 116, and 113. Find the
range.
2. Refer to the example on the final grade of 110 Statistics 101 students. The range is
Range = 96 50 = 46.

Approximating the range from the frequency distribution table, we get

Range = 99 50 = 49.
Characteristics of the Range

1. It uses only the extreme values. It fails to communicate any information about the
clustering or the lack of clustering of the values between the extremes.

2. A weakness of the range is that an outlier can greatly alter its value.

3. It can not be approximated from open-ended frequency distributions.

4. It is unreliable when computed from a frequency distribution table with gaps or zero
frequencies.

The Standard Deviation and the Variance

Definition. For a finite population of size N, the population variance is

42 CHAPTER 4. MEASURES OF DISPERSION

AND MEASURES OF SKEWNESS

Definition. For a sample of size n, the sample variance is

 n ___

(X i X )2
s2 i 1
n 1

and the sample standard deviation is

n ___ 2

(X i X)
s i 1
n 1

Remarks:

1. The standard deviation is the most frequently used measure of dispersion.

2. The variance is not a measure of absolute dispersion. It is not expressed in the same
units as the original observations.

Examples:

1. The following scores were given by 6 judges for a gymnasts performance in the vault:
7, 5, 9, 7, 8, and 6. Find the standard deviation.

=7 10 6 1.3

2. A sample of 5 households showed the following number of household members:

3, 8, 5, 4, and 4. Find the standard deviation.

___
X 4.8 s 14.8 1.9
4

3. Refer to the example on the final grades of 110 Statistics 101 students. The sample
standard deviation is given by

110

( Xi 74.11)2 13798.69
s i 1
11.25
109 109

ELEMENTARY STATISTICS 43

Computation formula:
 2
n
n
n X i2 X i
s i 1 i 1
n(n 1)

Example: For the final grade of 110 Statistics 101 students,

110(617936) (8152) 2 151856

s 11.25
110(109) 11990

Approximating the Variance from the Frequency Distribution

k ___

f (X i i X)
2

s2 i 1
n 1

or, using the computational formula,

2
k
k
n fi X fi
i
2

s
2 i 1 i 1
n(n 1)

Where fi = frequency of the ith class

Xi = classmark of the ith class
___
X= mean of the frequency distribution
n = total number of observations

44 CHAPTER 4. MEASURES OF DISPERSION

AND MEASURES OF SKEWNESS

Example:
 Class Freq CM fiXi fiXi2
(fi) (Xi)

50 54 10 52 520 27040
55 59 3 57 171 9747
60 64 8 62 496 30752
65 69 13 67 871 58357
70 74 17 72 1224 88128
75 79 19 77 1463 112651
80 84 22 82 1804 147928
85 89 13 87 1131 98397
90 94 4 92 368 33856
95 99 1 97 97 9409
Total 110 8145 616265

110(616265) (8145) 2 1448125

s 10.99
110(109) 11990

Characteristics of the Standard Deviation

1. It is affected by the value of every observation. It may be distorted by few extreme

values.

2. It can not be computed from an open-ended distribution.

3. If each observation of a set of data is transformed to a new set by the addition (or
subtraction) of a constant c, the standard deviation of the new data set is the same as the
standard deviation of the original data set.

4. If a set of data is transformed to a new set by multiplying (or dividing) each observation
by a constant c, the standard deviation of the new data ser is equal to the standard
deviation of the original data set multiplied (or divided) by c.

ELEMENTARY STATISTICS 45

MEASURES OF RELATIVE DISPERSION

 Measures of relative dispersion are unitless and are used when one wishes to
compare the scatter of one distribution with another distribution.

The Coefficient of Variation

Definition. The coefficient of variation, CV, is the ratio of the standard deviation to the
mean and is usually expressed in percentage. It is computed as

CV x 100%

and its sample counterpart

s
CV ___
x 100%
X

Examples.

1. The foreign exchange rate is an indicator of the stability of the peso and is also an
indicator of the economic performance. In 1992 Bangko Sentral ng Pilipinas (BSP) put
the peso on a floating rate basis. Market forces and not government policy have
determined the level of the peso since. Government intervenes through the BSP, only
when there are speculative elements in the market. Given below are the means and
standard deviations of the quarterly $ exchange rate for the periods 1989 to 1991 to
1992 to 1994. Which of the two periods is more stable?

Mean s.d.

1989-1991 22.4 1.84

1992-1992 26.4 1.16

1.84
CV8991 x 100% 8.21%
22.4

1.15
CV9294 x 100% 4.36%
26.4

46 CHAPTER 4. MEASURES OF DISPERSION

AND MEASURES OF SKEWNESS

2. Two of the quality criteria in processing butter cookies are the weight and color
development in the final stage of oven browning. Individual pieces of cookies are
 scanned by a spectrophotometer calibrated to reflect yellow-brown light. The readout is
expressed in per cent of a standard yellow-brown reference plate and a value of 41 is
considered optimal (golden-yellow). The cookies were also weighed in grams at this
stage. The means and standard deviations of 30 sample cookies are presented below.

Mean s.d.

Color 41.1 10
Weight 17.7 3.2

Which of the two quality criteria is more varied?

10
CVcolor x 100% 24.33%
41.1

3.2
CVweight x 100% 18.08%
17.7

The Standard Score

Definition. The standard score measures how many standard deviations an observation
is above or below the mean. It is computed as

X
Z

and the sample counterpart is

___
XX
Z
s

Remarks:

1. The standard score is not a measures of relative dispersion per se but is somewhat
related.

2. It is useful for comparing two values from different series specially when these two
series differ with respect to the mean of standard deviation or both are expressed in
different units.

ELEMENTARY STATISTICS 47

Examples:
 1. Robert got a grade of 75% in Stat 101 and a grade of 90% in Econ 11. The grade in
Stat 101 is 70% and the standard deviation is 10%, whereas in Econ 11, the mean
grade is 80% and the standard deviation is 20% relative to the other students, where
did he perform better?

75 70
Z Stat101 0.5
10

90 80
Z Econ11 0.5
20

2. In problem (1), if the mean grade in Stat 101 is 65%, in which subject did Robert
perform better?

75 65
Z Stat101 1.0
10

3. Different typing skills are required for secretaries depending on whether one is
working in a law office, an accounting firm, or for a mathematical research group
at a major university. In order to evaluate candidates for these positions, an agency
administers 3 distinct standardized typing samples. A time penalty has been
incorporated into the scoring of each sample based on the number of typing errors.
The mean and standard deviation for each test, together with the scores achieved by
Nancy, an applicant, are given in the following table.

Sample Nancys Score Mean std. dev.

Law 141 sec 180 sec 30 sec

Accounting 7 min 10 min 2 min
Scientific 33 min 26 min 5 min

Where do you think should Nancy be placed?

141 180 7 10 33 - 26
ZL 1.3 ZA 1.5 ZS 1.4
30 2 5

48 CHAPTER 4 MEASURES OF DISPERSION

AND MEASURES OF SKEWNESS

MEASURES OF SKEWNESS
 Definition. A measure of skewness shows the degree of asymmetry, or departure from
symmetry of a distribution. It indicates not only the amount of skewness
but also the direction.

Two Type of Skewness

1. Positively Skewed or Skewed to the right

distribution tapers more to the right than to the left

longer tail to the right
more concentration of values below than above the mean
most skewed curves encountered in the social sciences are skewed to the
right.

Example: frequency distribution of income

2. Negatively Skewed or Skewed to the Left

distribution tapers more to the left than to the right

longer tail to the left
more concentration of values above than below the mean
only rarely do we find curves skewed to the left, and even more rarely do
we find data characteristically skewed to the left

Example: the distribution of ages at death of the American inventors may be

characteristically skewed to the left, since younger men do not often have
enough inventions to their credit to be classified as inventor

ELEMENTARY STATISTICS 49

Pearsons First and Second Coefficients of Skewness

 ___
X Mo
1. Sk
s
___
Where X = mean
Mo = median
s = standarad deviation

___
3( X Md )
2. Sk
s
___
Where X = mean
Md = median
s = standarad deviation

Remarks:

1. Since the mode is frequently only an approximation, formula 2 is preferred.

2. Interpretation of the measures of skewness:

__
Sk > 0: positively skewed since X > Md > Mo
___
Sk < 0: negatively skewed since X < Md < Mo
___
Sk = 0: symmetric since X = Md = Mo

Example: Refer to the final grade of 110 Statistics 101 students

__
X = 74.1 Md = 75 Mo = 84 s = 11.25

Using the fist formula,

74.1 84
Sk 0.88
11.25

Using the second formula,

3(74.1 75)
Sk 0.24
11.25
Definition. The boxplot is a graph that is very useful for displaying the following
features of the data:

location
spread
 symmetry
extremes
outliers

Steps in Constructing a Boxplot

1. Construct a rectangle with one end at the first quartile and other end at the third
quartile.

2. Put a vertical line across the interior of the rectangle at the median.

3. Compute for the interquartile range (IQR) lower fence (FL) and upper fence (FU)
given by:

IQR = Q3 - Q1
FL = Q1 1.5 IQR
FU = Q3 1.5 IQR

4. Locate the smallest value contained in the interval [FL , Q1]. Draw a line from this
value to Q1.

5. Locate the largest value contained in the interval [Q3 , FU ]. Draw a line from this
value to Q3.

6. Values falling outside the fences are considered outliers and are usually denoted by
x.

Remarks:

1. The height of the rectangle is usually arbitrary and has no specific meaning. If
several boxplots appear together, however, the heights is sometimes made
proportional to the different sample sizes.

2. If the outlying observation is less than Q1 3 IQR or greater than Q3 + 3IQR it is

identified with a circle at their actual location. Such an observation is called a far
outlier.

ELEMENTARY STATISTICS 51
Examples:

1. Set A. 1 15 21 22 24
10 18 22 23 25
14 20 22 24 28

Q1 = 15 IQR = 9
Q3 = 24 FL = 1.5
Md = 22 FU = 37.5

Set B: 3 10 11 12 19
8 10 12 16 19
9 10 12 16 30

Q1 = 10 IQR = 6
Q3 = 16 FL = 1
Md = 12 FU = 25

Set A x

Set B

0 5 10 15 20 25 30 35

2. Boxplot of the final grade of 110 Statistics 101 students.

50 55 60 65 70 75 80 85 90 95 100

1. A or A the complement of an event A with respect to S contains all elements of S

that are not in A and is the event that A does not occur

Some relationship between events can be illustrated by means of a Venn diagram.

5.1 THE PROBABILITY CONCEPT AND SOME PROPERTIES

Probability analysis is based on the following simple postulates.

Postulate 1. 0 P(O1) 1 for any simple event O1

Postulate 2. The probability for any event E is the sum of the probability of the simple
events that constitute E.
Postulate 3. P(S) = 1, where S is the sample space, and P() = 0, where is the null space.

Approaches to Assigning Probabilities

1. A Priori or Classical Probability probability is determined even before the

experiment is performed using the following rule:

If an experiment can result in any one of N different equally likely outcomes,

and if exactly n of these outcomes correspond to event A, then the probability
of event A is

no. of sample points in A n

P(A)= no. of sample points in S = N

2. A posteriori or Relative Frequency or Empirical Probability probability is

determined by repeating the experiment a large number of times using the following
rule:

no. of times event A occurred

P(A)= no. of times experiment was repeated

3. Subjective Probability probability is determined by the use of intuition, personal

beliefs, and other indirect information.

CHAPTER 5
Probability
5.2 RANDOM EXPERIMENTS, SAMPLE SPACES AND EVENTS

Definition of Terms

1. Random Experiments any process of generating a set of data or observations that

can be repeated under basically the same conditions, which
lead to well-defined outcomes

2. Sample space set of all possible outcomes of an experiment, usually denoted

by S

3. Sample point an element of the sample space, an outcome

4. Event any subset of the sample space, usually denoted by capital

letters

5. Null space/Empty Space a subset of the sample space that contains no elements and
denoted by the symbol

6. Simple event an event which contains only one element of the sample space

7. Compound event an event that can be expressed as the union of simple events,
thus containing more than one sample point

8. Mutually exclusive events Two events A and B are mutually exclusive if A B= ; that
is, A and B have no elements in common

Remarks:

An event is said to have occurred if the outcome of the experiment is one of the sample
points in the event.

The empty space can be viewed as an event that will never happen. It is called the
impossible event.

The sample space S, as an event, always occurs, and is referred to as the certain or sure
event.

Examples:

1. Find the error in each of the following statements:

 a. The probability that it will rain tomorrow is 0.40 and the probability that it will not
rain tomorrow is 0.52.
b. The probabilities that a printer will make 0, 1, 2, 3, or 4 or more mistakes in printing
a document are, respectively, 0.19, 0.34, -0.25, 0.43, and 0.29.
c. The probabilities that an automobile salesperson will sell 0, 1, 2, or 3 cars on any
given day in February are, respectively, 0.19, 0.38, 0.29, and o.15.
d. On a single draw for a deck of playing cards the probability of selecting a heart is
, the probability of selecting a black card is , and the probability of selecting of
both a heart and a black is 1/8.

2. a. In tossing a fair coin, what is the probability of getting a head? Of either a head or
tail? Of neither a head nor tail?

b. In tossing a fair die, what is the probability of getting a 3? Of getting an even number?
Of getting a number greater than 6?

3. A coin is biased so that a head is twice as likely to occur as a tail. If the coin is tossed
once, what is the probability of getting a head?

Rules of Counting (Optional)

Theorem. If an operation can be performed in n1 ways, and for each of these a second
operation can be performed in n2 ways, then the two operations can be
performed in n1 x n2 ways.

Example: How many sample points are there in the sample space when a pair of
balance dice is thrown once?

Theorem. (Multiplication Rule) If an operation can be performed in n1 ways, if for each

of these a second operation can be performed in n2 ways, if for each of the first
two a third operation can be performed in n3 ways, and so on, then the sequence
of k operations can be performed in n1x n2 xx nk ways.

Examples:

1. How many even three-digit numbers can be formed from the digits 1, 2, 5, 6, and 9
if each digit can be used only once?

2. How many ways can a 10-question true-false examination be answered?

ELEMENTARY STATISTICS
Definition. A permutation is an arrangement or ordering of all or part of a set of objects.

Theorem. The number of permutations of n distinct objects is

n (n-1)(n-2)(2)(1) = n!

(n! is read n factorial)

Note. 0! = 1.

Example: How many different orders or sequences can we arrange the letters A, B,
C, and D?

Theorem. The number of permutations of n distinct objects taken r at a time is

n!
P
(n r )!
n r

Examples:

1. Two lottery tickers are drawn from 20 for the first and second prize. Find the
number of sample points in the space S.

2. In how many ways can the 5 starting positions on a basketball team be filled with 8
men who can any position?

Theorem. The number of distinct permutations of n things of which n1 are of one kind, n2
are of a second kind, . . . , nk of a kth kind is

k
n!
n1!n2!...nk !
where n
i 1
i n

Examples.

1. Consider our favorite word, STATISTICS, that contains a total of 10 letters. There
are 3 classes of indistinguishable objects that consists of 3 Ss, 3 T and 2 Is. Find
the total number of distinct permutations of these 10 letters.

2. In how many different ways can 3 red, 4 yellow, and 2 blue bulbs be arranged in a
string of Christmas tree lights with 9 sockets?

CHAPTER 5. PROBABILITY
 Definition. A combination is selection of r objects from n without regard to order.

Theorem. The number of combinations of n distinct objects taken r at a time is

n!
Cr
r!(n r )!
n

Examples:

1. In a Stat 101 exam, a student has a choice of 8 questions out of 10. In how
many ways can be choose a set of 8 questions if he chooses arbitrarily?

2. Find the number of ways of selecting the 6 winning numbers in the original
version of the game of lotto.

Theorems on Probabilities of Events

Theorem. (Additive Rule) If A and B are any two events, the

P(A B) = P(A) + P(B) P(A B)

Corollary. If A and B are mutually exclusive, then

P(A B) = P(A) + P(B)

Corollary. If A1, A2,,An are mutually exclusive, then

P(A1 A2 An) = P(A1) + P(A2) + +P(An)

Theorem. If A and Ac are complementary events, then

P(A) + P (Ac) = 1,

Examples:

1. The probability that a student passes Stat 101 is 0.60, and the probability that he passes
Comm II is 0.85. If the probability that he passes at least one of the two courses is 0.95,
what us the probability that he will pass both courses? Fail both Stat 101 and Comm II?

2. An oil-prospecting firm plans to drill two exploratory wells. Past evidence shows that
the probability that neither well produces oil is 0.8; the probability that exactly one well
produces oil is 0.18; and the probability that both wells produce oil is 0.02. What is the
probability that at most one well produces oil? At least one?

3. In the toss of a fair coin 4 times, what is the probability of no head in the toss? At least
one head?
ELEMENTARY STATISTICS
Definition. The probability of an event B occurring when it is known that some event A
has occurred is called a conditional probability. It is defined by the equation

P( A B)
P( B \ A) if P( A) 0
P( A)

P(BA) is read as probability of B given A.

Examples:

1. A random sample of 100 insurance claims are classified below according to the type of
policy and whether the claim is fraudulent or not.

a. Find the probability of a fraudulent claim given that such a claim is for a fire policy.

b. Find the probability that a claim for a fire policy is selected given that such a claim
is fraudulent.

Categorization of Insurance Claims

Type of Policy
Category Fire Auto Others Total
Fraudulent 6 1 3 10
Nonfraudulent 14 29 47 90
Total 20 30 50 100

2. The probability that a student passes Stat 101 is 0.60, the probability that he passes Comm
II is 0.85, the probability that he passes both subjects is 0.5. If the student passes Stat
101, what is the probability that the student will pass Comm II?
Definition. Two events A and b are said to be independent if anyone of the following
conditions is satisfied:

(a) P(A|B) = P(A) if P(B)>0

(b) P(B|A) = P(B) if B(A)>0
(c) P(AB) = P(A) P(B)

Otherwise, the events are said to be dependent.

Example:

1. Consider the following events in a toss of a single dice:

A. Observe an odd number

B. Observe an even number

Are A and B independent events?

2. The probability that Robert will correctly answer the toughest question in an exam
is . The probability that Ana will correctly answer the same question is 4/5. Find
the probability that both will answer the question correctly, assuming that they do
not copy from each other.
CHAPTER 6
Probability Distributions

CONCEPT OF A RANDOM VARIABLE

Definition. A function whose value is a real number determined by each element in the
sample space is called a random variable.

Remark. We shall use an uppercase letter, say X, to denote a random variable and its
corresponding lowercase letter, X in this case, for one of its values.

Examples:

1. (Experiment No. 1) An experiment consists of tossing a coin 3 times and observing

the result. The possible outcomes and the values of the random variables X and Y,
where X is the number of heads and Y is the number of heads minus the number of
tails are

Sample Points X Y

HHH 3 3
HHT 2 1
HTH 2 1
HTT 1 -1
THH 2 1
THT 1 -1
TTH 1 -1
TTT 0 -3

2. (Experiment No. 2) A hatcheck girl returns 3 hats at random to 3 customers who had
previously checked them. If Jason, Charlie, and Ohmar, in that order, receives one of the
hats, list the sample points for the possible orders of returning the hats and find the values
m of the random variable M, that represents the number of correct matches.
 CHAPTER 6. PROBABILITY DISTRIBUTIONS

6.2. DISCRETE & CONTINUOUS PROBABILITY DISTRIBUTIONS

Definition. If a sample space contains a finitite number of possibilities or an unending

sequence with as many elements as there are whole numbers, it is called a
discrete sample space.

Definition. A random variable defined over a discrete sample space is called a discrete
random variable.

Definition. If a sample space contains an infinite number of possibilities equal to the

number of points on a line segment, it is called a continuous sample space.

Definition. A random variable defined over a continuous sample space is called a

continuous random variable.

Discrete Probability Distributions

Definition. A table or formula listing all possible values that a discrete random variable
can take on, along with the associated probabilities, is called a discrete
probability distribution.

Remark. The probabilities associated with all possible values of a discrete random
variable must sum to 1.

Examples.

1. For Experiment No. 1, the discrete probability distributions of the random variable X
and Y are

x 0 1 2 3
P(X=x) 1/8 3/8 3/8 1/8

x -3 -1 1 3
P(Y=y) 1/8 3/8 3/8 1/8
2. Construct the discrete probability distribution for the random variable M defined in
Experiment No. 2.

CHAPTER 6. PROBABILITY DISTRIBUTIONS

6.3 EXPECTIVE VALUES

Definition. Let X be a discrete random variable with probability distribution

x x1 x2 xn
P(X=x) f(xi) f(x2) f(xn)

The mean or expected value of X is

n
E ( X ) xi f ( xi )
i 1
Examples:

1. Find the mean of the random variables X and Y of Experiment No. 1.

x 0 1 2 3
P(X=x) 1/8 3/8 3/8 1/8

E(X) = (0)(1/8) = (1)(3/8) + (2)(3/8) + (3)(1/8) = 12/8 or 1.5

x -3 -1 1 3
P(Y=y) 1/8 3/8 3/8 1/8

E(Y) = (-3)(1/8) + (-1)(3/8) + (1)(3/8) + (3)(1/8) = 0

2. Find the expected number of correct matches in Experiment No. 2.

3. In a gambling game a man is paid P50 if he gets all heads or tails when 3 coins are
tossed, and he pays out P30 if either 1 or 2 heads show. What is his expected gain?

Theorem. Let X be a discrete random variable g(X) is

x x1 x2 xn
P(X=x) f(xi) f(x2) f(xn)

The mean or expected value of the random variable g(X) is

 n
E(g(X)) = g(x1) f (x1 )
i 1

Example: A used car dealer finds that in any day, the probability of selling no car is
0.4, one car is 0.2, two cars is 0.15, 3 cars is 0.10, 4 cars is 0.08, five cars is
daily earnings, where X is the number of cars sold. Find the salesmans
expected daily earnings.

ELEMENTARY STATISTICS

Definition. Let X be random variable with mean then the variance of X is

2 = Var ( X ) = E (X - )2

Definition. Let X be a discrete random variable with probability distribution

x x1 x2 xn
P(X=x) f(xi) f(x2) f(xn)

The variance of X is
n
2 = Var (X ) = E (X - )2 =

i 1
(x1- )2 f (x1)

Theorem. Computational Formula for 2

Var(X) = E(X2) [E(X)]2

Example:

In Experiment No. 1, find the variance of X.

Using the definition of Var(X),

E(X) = 1.5
4
Var(X) = ( x i 1.5)2 f (xi)
i 1

= (0-1.5)2 (1/8) + (1-1.5)2(3/8) + (2.15)2(3/8) + ( 3-1.5)2(1/8) = 0.75

Using the computational formula of the Var(X),

Var(X) = E(X2) [E(X)]2

= 3 (1.5)2 = 0.75
PROBABILITY DISTRIBUTIONS

Properties of the Mean and Variance

Let X and Y be random variables (discrete or continuous) and let a and b be constants.

1. E(aX + b ) = a E(X) + b

Special Cases:
a. if b = 0, then E(aX) = a E(X).
b. if a = 0, then E(b) = b.

2. E(X+Y) = E(X) + E(Y)

E(X-Y) = E(X) E(Y)

3. E(XY) = E(X)E(Y) if X and Y are independent.

4. E[X E(X)] = 0.

5. Var(aX + b) = a2 Var(X).

Special cases:
a. if b = 0, then Var(aX) = a2Var(X).
b. if a = 0, then Var(b) = 0.

6. If X and Y are independent then

Var(X + Y) = Var(X)+ Var(Y)
Var(X - Y) = Var(X) + Var(Y)

Example:

If X and Y are independent random variables with E(X) = 3, E(Y) = 2, Var(X) = 2

and Var(Y) =1, find

a. E(3X + 5)
b. Var(3X +5)
c. E(XY)
d. Var(3X 2Y)
 ELEMENTARY STATITICS

6.4 THE NORMAL DISTRIBUTION

Definition. A continuous random variable X is said to be normally distributed if its

density function is given by:
1 x 2
1
2
f ( x) e
2
for - < x < and for constants and , where - < < , >0 and
e 2.71828 and 3.14159.

Notation: If X follows the above distribution, we write X ~ N( , 2 ).

Note: If X ~ N ( , 2), then

E(X) = and Var (X) = 2.

The graph of the normal distribution is called the normal curve.

Properties:

1. The curve is bell-shaped and symmetric about a vertical axis through the mean .

2. The normal curve approaches the horizontal axis asymptotically as we proceed in

either direction away from the mean.
3. The total area under the curve and above the horizontal axis is equal to 1.

PROBABILITY DISTRIBUTIONS

Definition. The distribution of a normal random variable with mean to zero and standard
deviation equal to 1 is called a standard normal distribution.

If X ~ N ( , 2), then X can be transformed into a standard normal random variable

through the following transformation,

X
Z

Hence, whenever X is between the values x1 and x2, the random variable Z will fall
between the corresponding values.

x1 x2
z1 and z2

Thus, P (x1 < X < x2 ) = P (z1 < Z < z2 ).

Examples:

1. Given the normal distribution with = 40 and = 8, find the probability that X
assumes a value
a. less than 45
b. between 35 and 45
c. more than 45

2. Given the normally distributed random variable X with mean 18 and standard deviation
2.5, find
a. the value of k such that P(X<k) = 0.2578
b. the value of k such that P(X>k) = 0.1539.

3. The achievement scores for a college entrance examination are normally distributed with
mean 75 and standard deviation equal to 10. What fraction of the scores would one
expect to lie between 70 and 90?
4. A softdrink machine is regulated so that it dispenses an average of 200 ml. per cup. If
the amount of drink dispensed is normally distributed with a standard deviation equal to
15 ml.,
a. what fraction of the cups will contain more than 224 ml?
b. what is the probability that a cup contains between 191 ml. and 209 ml.?
c. how many cups will likely overflow if 230 ml. cups are used for the next 1000
drinks?
d. Below what value do we get the smallest 25% of the drinks?

ELEMENTARY STATISTICS

6.5 OTHER COMMON DISTRIBUTIONS

Binomial Distribution

Definition. A binomial experiment is one that possesses the following properties:

the experiment consists of n identical trials

each trial results in one of two outcomes, a success or a failure
the probability of success on a single trial is equal to p and remains
the same from trial to trial. The probability of a failure is equal to
q=1-p.
the trials are independent

The random variable of interest X. the number of successes observed in n

trials, is called a binomial random variable.

Definition. The discrete probability distribution of the binomial random variable is

given by

n
P( X x ) f ( x ) p x (1 p ) n x , x 0,1,..., n and 0 p 1
x

Notation : If X follows the above distribution, we will write X~Bi(n, p).

Note : If X~Bi(n, p) the E(X) = np and Var(X) = npq, where q = 1-p.

Examples:

1. The probability that a patient will survive a delicate heart operation is 0.75. what is the
probability that in the next 4 patients,
a. Exactly 2 patients will survive
b. At least 1 patient will survive
c. From 3 to 4 patients will survive
2. A multiple-choice quiz has 15 questions, each with 4 possible answers of which only 1
is the correct answer. What is the probability that sheer guesswork yields
 a. exactly 10 correct answers
b. at least 1 correct answer
c. 8 to 12 correct answers

3. Suppose that airplane engines operate independently in flight and fail with probability
1/5. Assuming that a plane makes a safe flight if at least one-half of its engines run, which
between a 4-engine plane and a 2-engine plane has the higher probability for a successful
flight?
PROBABILITY DISTRIBUTIONS

Hypergeometric Distribution (Optional)

Definition. A hypergeometric experiment is one that possesses the following

properties:

a sample of size n is taken without replacement from a population of

size N
k of the N are classified as success and (N-k) classified as failure.

The random variable of interest X, the number of successes in the sample is

called a hypergeometric random variable.

Definition. The discrete probability distribution of the hypergeometric random variable

is given by

k N k

x n x
P( X x ) f ( x ) , x 0,1,..., min( n, k )
N

n

Notation: If X follows the above distribution, we write X~H(N,n,k).

Note: If X~H(N,n,k) then

nk ( N n )nk k
E( X ) and Var( X ) 1
N ( N 1) N N

Remark: If n is small relative to N the probability of success for each draw will
change only slightly. Hence, the hypergeometric distribution can be
approximately by the binomial distribution with p = k/N.
Examples:
1. If 5 cards are dealt from a standard deck of 52 playing cards, what is the probability
that 3 will be hearts?
2. A committee of size 5 is to be selected at random from 3 women and 5 men. Find
the probability distribution for the number of women on the committee.
3. Random committee of size 3 is selected from 4 men and 2 women. Write the formula
for the probability distribution of the random variable X representing the number of
men in the committee
 4. What is the probability that a persons 6 number bet wins the second prize in a game
of lotto?
5. A lot of 20 personal computers was delivered to the Statistical Center. Ten
computers were selected at random without replacement and tested for defects. If at
least 2 of these 10 are defective, the entire lot of 20 computers will be returned. What
is the probability that the lot will be returned if 5 of 20 computers are indeed
defective?

ELEMENTARY STATISTICS

Poisson Distribution (Optional)

Definition. A poisson experiment is one that possesses the following properties:

the number of our comes occurring in one time interval or specified region
is independent of the number that occur in any other disjoint time interval
or region of space
the probability that a single outcome will occur during a very short time
interval or in a small region is proportional to the length of the time interval
the probability that more than one outcome will occur in such a short
time interval or fall in such a small region is negligible

The random variable of interest X, the number of outcomes in a specified length of

time interval or regions, is called a Poisson random variable.

Definition. The probability distribution of the Poisson random variable is given by

e x
P( X x) f ( x) , x 0,1,2....
x!

Notation: If X follows the above distribution, we write X~Poi().

Note: If X~Poi(), then E(X) = and Var(X) = .

Remark: If X~Bi(n, p) and n is large p is close to 0, the poisson distribution is used to

approximate the Binomial distribution with = np.

Examples:

1. On the average a certain intersection results in 3 traffic accidents per month. Suppose
that the number of accidents per month follows a Poisson distribution, what is the
probability that in any given month at this intersection,

a. exactly 5 accidents will occur?

b. less than 3 accidents will occur?
c. at least 2 accidents will occur?
2. The probability that a person dies from a certain respiratory infection is 0.002. Find the
probability that fewer than 5 random sample of 2000 so infected will die.

PROBABILITY DISTRIBUTIONS

Normal Approximation (Optional)

Normal Approximation to the Binomial

Theorem. If X~Bi(n, p) with mean np and variance npq, then distribution of

X np
Z
npq

as n approaches so will approximate the standard normal distribution.

Remarks:

1. The normal distribution gives a very good approximation of the Binomial distribution
when n large and p is close to 1/2.

2. Since a continuous distribution (in this case. The Normal) is used to approximate a
discrete distribution, then we must adjust for continuity. For example:

Let X~Bi(n, p).

(a 0.5)np (a 0.5)np
P ( X a ) P Z
npq
npq

Example:

A certain pharmaceutical company knows that, on the average, 45% of a certain type of pill
has an ingredient that is below the minimum strength and thus unacceptable. What is the
probability that fewer than 10 in a sample of 200 will be unacceptable?
CHAPTER 7
Sampling Distributions

Definition. The probability distribution function of a statistic is called its sampling

distribution.

A statistic (e.g. sample mean, sample standard deviation) is a random variable whose
value depends only on the observed sample and may vary from sample to sample.

The sampling distribution of a statistic will depend on the size of the population, the
size of the sample, and the method of choosing the sample.

The standard deviation of the sampling distribution is called standard error of the
statistic. It tells us the extent to which we expect the values of the statistic to vary
from different possible samples.
___
The probability distribution of the sample mean X is called the sampling
distribution of the mean.

Sampling Distribution of the Mean

Consider 4 observations making up the population values of a random variable X having

the probability distribution

f(x) = 1/4 , x = 0, 1 , 2 , 3

Note that = E(X) = 3/2 and 2 = Var(X) = 5/4

Suppose we list all possible samples of size 2, with replacement, and for each sample
___
compute for the value of the sample mean, X :

___ ___
No. Sample X No. Sample X
1 0,0 0.0 9 2, 0 1.0
2 0,1 0.5 10 2, 1 1.5
3 0,2 1.0 11 2, 2 2.0
4 0,3 1.5 12 2, 3 2.5
 5 1,0 0.5 13 3, 0 1.5
6 1,1 1.0 14 3, 1 2.0
7 1,2 1.5 15 3, 2 2.5
8 1,3 2 16 3, 3 3.0

CHAPTER 7. SAMPLING DISTRIBUTIONS

Sampling Distribution of the Mean

___ ___

X f(X )

0 1/16
0.5 2/16
1.0 3/16
1.5 4/16
2.0 3/16
2.5 2/16
3.0 1/16

___ ___
Note: E ( X ) = 3/2 and Var ( X ) = 5/8.

Theorems:

1. If all possible random samples of size n are drawn with replacement from a finite
population of size N with mean and standard deviation , then the sample mean will
have mean and variance given by:

___ ___
E ( X ) = and Var ( X ) = 2/n.

2. If all possible random samples of size n are drawn without replacement from a finite
population of size N with mean and standard deviation , then sample mean will
have mean and variance given by:

2 N n
E( X ) and Var ( X ) .
n N 1
 N n ___
The factor in the formula of the variance of ( X ) is called the finite
N 1
population correction factor. For large N relative to the sample size n this factor
___
will be close to 1 and the variance of X is approximately equal to 2 /n.

ELEMENTARY STATISTICS

3. Central Limit Theorem

___
If X is mean of a random sample of size n taken from a (large or infinite) population
___
with mean and variance 2 , then the sampling distribution of X is approximately
___ ___
normally distributed with mean E( X ) = and variance Var( X ) = 2 /n when n is
sufficiently large. Hence, the limiting form of the distribution of

X
Z
/ n

as n approaches infinity is the standard normal distribution.

The normal approximation in theorem will be good if n 30 regardless of the shape

of population.

If n < 30, the approximation is good only if the population is not too different from
the normal.

If the distribution of the population is normal the sampling distribution will also be
exactly normal, no matter how small size of the sample.

Example:

An electrical firm manufactures electric light bulbs that have a length of life which is
normally distributed with mean and standard deviation equal to 500 and 50 hours,
respectively. Find the probability that a random sample of 15 bulbs will have an average
life of less than 475 hours.

4. The t-distribution.

___
If X and S2 are mean and variance, respectively, of a random sample of size n taken
from a population which is normally distributed with mean and variance 2 , then
 X
T
S/ n

is a random variable having the t-distribution with v-n-1 degrees of freedom.

Notation: T~tv=n-1

Comparison between the t-distribution and the standard normal distribution

1. Both are symmetric about zero

2. Both are bell-shaped, but the t-distribution is more variable

(i.) t-values depend on the fluctuation of 2 quantities: and s

(ii.) z-values depend only on the changes in from sample to sample.

3. When the sample size is large, i.e. n 30, the t-distribution can be well approximated
by the standard normal distribution.

Area under the curve

Just like any continuous probability distribution, the probability that a random sample
produces a t-value falling between any two specified values is equal to the area under the
curve of the t-distribution between any two ordinates corresponding to the specified values.

Notation: t is the t-value leaving an area of in the right-tail of the t-distribution. That
is, if Tt(v) then t is such that P(T> t ) =
Since the t-distribution is symmetric about zero, 1 = -t

Examples:

1. Find the following values on the t-table:

(a) t0.025 when v = 14
(b) t0.99 when v = 10.

2. Find k such that P(k <T < 2.807) = 0.945 when T t(23)

3. A manufacturing firm claims that the batteries used in their electronic games will last an
average of 30 hours. To maintain this average, 16 batteries are tested each month. If the
computed t-value false between - t0.025 and t0.025, the firm is satisfied with its claim.
What conclusion should the firm draw from a sample that has mean = 27.5 hours and
standard deviation s = 5 hours? Assume the distribution of battery lives to be
approximately normal.
CHAPTER 8

Estimation

Definition. Statistical inference refers to methods by which one uses sample information
to make inferences or generalizations about a population.

Two Areas of statistical Inference

1. Estimation
-point estimation
-interval estimation

2. Hypothesis Testing

8.1 BASIC CONCEPTS IN ESTIMATION

Point Estimation

Definition. An estimator is any statistic whose value is used to estimate an unknown

parameter. A realized value of an estimator is called an estimate.
__
For example, the sample mean X, is an estimator of the population mean .

Remarks:

1. An estimator is said to be unbiased if the average of the estimates it produces under

repeated sampling is equal to the true value of the parameter being estimated.

Examples: Under random sampling, the sample mean is an unbiased estimator of the
population mean, that is E(X) =

Under random sampling with replacement, S is an unbiased estimator of

, but S on the other hand is a biased estimator of with the bias
becoming insignificant for large sample.
 2. A parameter can have more than one unbiased estimator. We would naturally choose
the unbiased estimator with the smallest variance.

Interval Estimation

Definition. An interval estimator of a population parameter is a rule that tells us how

to calculate two numbers based on sample data, forming an interval within
which the parameter is expected to lie. This pair of numbers, (a,b), is called
an interval estimate or confidence interval.

Example. The running time (in minutes) of a sample of films produced by Star-Regal
Theater are as follows: 103 94 110 87 98

A 95% confidence interval for the mean running time of films produced by
Star-Regal Theater is (87.6, 109.2)

The number 0.95 in the example is called the confidence coefficient or the degree
of confidence.

The endpoints 87.6 and 109.2 are called the lower and upper confidence limits.

Remarks:

1. In general, we construct a (1-) 100% confidence interval. The fraction (1-) is

called the confidence coefficient, and the endpoints a and b are called the lower
and upper confidence limits, respectively.
2. Interpretation of (1-) 100% confidence interval:

If we take repeated samples of size n and if for each one of these samples we compute
the (1-)100% of the resulting confidence intervals will contain the unknown value
of parameter.

3. The confidence coefficient is not the the probability that the true value of the
parameter falls in the interval estimate since once a sample is drawn and a
confidence interval constructed, the resulting interval estimate either encloses the
true value of the parameter or it doesnt. Rather, the confidence coefficient is the
probability that the interval estimator encloses the true value of the parameter.

4. A good confidence interval is one that is as narrow as possible and has a large
confidence coefficient, near 1. The narrower the interval, the more exactly we have
located the parameter; whereas, the larger the confidence coefficient, the more
confidence we have that a particular interval encloses the true value of parameter.
 However, for a fixed sample size, as the confidence coefficient increases, the length
of the interval also increases.

ELEMENTARY STATISTICS

8.2 ESTIMATING THE MEAN

___
A point estimator of the population mean is sample mean, X .

(1- ) 100% Confidence interval for

a. when is known

X z / 2 , X z / 2
n n

where z / 2 is the z-value leaving an area of /2 to the right.

b. when is unknown

S S
X t / 2 , X t / 2
n n

Where t / 2 is the t-value with v = n 1 degrees of freedom.

Remarks:

1. The above formulas hold strictly for random samples from a normal distribution
However, they provide good approximate (1- ) 100% confidence intervals when the
distribution is not normal provided the sample size is large, i.e. n > 30.

2. If 2 unknown and n > 30, use

S S
X z / 2 , X z / 2
n n
where z / 2 is the z-value leaving an area of / 2 to the right.

Examples:

1. An electrical firm manufactures light bulbs that have a length of life that is normally
distributed, with a standard deviation of 40 hours. If a random sample of 25 bulbs
has a mean life of 780 hours, find a 95% confidence interval for the population mean
of all bulbs produced by this firm.

2. Regular consumption of presweetened cereals contribute to tooth decay, heart

disease, and other degenerative diseases, according to a study by Dr. M. Albreight
of the National Institute of Health and Dr. D. Solomon, professor of Nutrition and
Dietetics at the University of London. In a random sample of 20 similar servings of
Alpha-Bits, the mean sugar content was 11.3 grams with a standard deviation of 2.45
grams. Assuming that the sugar content is normally distributed, construct a 95%
confidence interval for the mean sugar content for single servings of Alpha-Bits.

3. A random sample of 100 automobile owners shows that an automobile is driven on

the average 23,500 kilometers per year, in the state of Virginia, with a standard
deviation of 3900 kilometers. Construct a 99% confidence interval for the average
number of kilometers an automobile is driven annually in Virginia.

8.2 ESTIMATING THE DIFFERENCE BETWEEN TWO POPULATION

MEANS

If we have two populations with mean 1 and 2 and standard deviations 1 and
2, respectively, a point estimator of the difference between 1 and 2 is the statistic
X1 - X2.

Types of Sampling:

selecting two independent samples

paired sampling

Paired sampling is used to overcome the difficulty imposed by extraneous

differences between two groups when testing the difference between two means.
This is achieved by matching or studying 2 related samples. Matching may be
achieved by:
 using the same subject in the 2 samples
pairing of subjects with respect to any extraneous variable which
might affect or influence the outcome.

ELEMENTARY STATISTICS

(1- )100 % Confidence Interval for 1 - 2

Based on Two Independent Samples

a. 12 and 22 known

12 22 12 22
(X 1 X 2) z , ( X X z
/2 /2
n2
1 2

n 1 n2 n 1

b. 12 = 22 but unknown

( X 1 X 2 ) t / 2 ( v ) S p 1 1 , ( X 1 X 2 t / 2 ( v ) S p 1 1
n1 n2 n1 n2

(n1 1S12 (n2 1) S 22

where S p and v = n1 + n2 -2
n1 n2 2

c. 12 22 but unknown

S12 S 22 S12 S 22
(X 1 X 2) t , ( X X t
/ 2( v ) / 2( v )
n2
1 2

n1 n2 n1

( S12 / n1 S 22 / n2 ) 2
where v 2
( S1 / n1 ) 2 ( S 22 / n2 ) 2

n1 1 n2 1

Remarks:
1. These formulas hold strictly for independent samples selected from Normal populations.
However they provide good approximate (1-a) 100% confidence intervals when the
distributions are not Normal provided both n1 and n2 are greater than 30

2. If 12 and 22 are unknown but n1 and n2 are greater than 30, use

S12 S 22 S12 S 22
(X 1 X 2) z , ( X X z
/2 /2
n2
1 2

n1 n2 n1

3. Even if the population variances are considerably different formula (b) will still
provide a good estimate provided that n1=n2 and both populations are normal.
Therefore, in a planned experiment one should make every effort to equalize the size
of the samples.
80 CHAPTER 8. ESTIMATION

Examples:

1. A statistic test was given to a random sample of 50 girls and another random sample of
75 boys. The mean score of the girls is 80 with a standard deviations of 4 and the mean
score of the boys is 86 with a standard deviation of 6. Find a 95% confidence interval
for the difference.

2. Students may choose between a 3 unit course in physics without lab and a 4- unit course
with lab. The final written examination is the same for each section. The mean score of
a random sample of 12 students in the sections with lab is 84 with a standard deviation
of 4, and the mean score of another random sample of 18 students in the section without
lab is 77 with a standard deviation of 6. Find a 99% confidence interval for the difference
between the mean grades for the two courses. Assume the populations to be
approximately normally distributed with equal variances.

3. The following data represent the running time of a random of films produced by two
motion picture companies:
Time (minutes)

Company 1 103 94 110 87 98

Company 2 97 82 123 92 175 88 118

Compute a 90% confidence interval for the difference between the mean running time of
produced by two companies. Assume that the running times for each of the companies are
approximately normally distributed with unequal variances.

Based on Two Related/Paired Samples

S S
d t / 2( v ) d , d t / 2( v ) d
n n

where di = xi - yi
 2
n n
n
d i
i 1
d di
i
2

i 1
d i 1
Sd
n n(n 1)

V = n-1 n = number of pairs

ELEMENTTARY STATISTICS

Examples:

1. It is claimed that a new diet will reduce a persons weight by 4.5 kilograms on the
average in a period of 2 weeks. The weights of a random sample of 7 women who
followed this diet were recorded before and after a 2-week period:

Woman
1 2 3 4 5 6 7

Weight Before 58.5 60.3 61.7 69.0 64.0 62.6 56.7

Weight After 60.0 54.9 58.1 62.1 58.5 59.9 54.4

Compute a 95% confidence interval for the mean difference in the weight. Assume the
distribution of weights to be approximately normal.

2. Twenty college freshmen were divided into 10 pairs, each member of the pair having
approximately the same IQ. One of each pair was selected at random and assigned to a
mathematics section using programmed materials only. The other member of each pair
was assigned to a section in which the professor lectured. At the end of the semester
each group was given the same examination and the following results were recorded.

Pair 1 2 3 4 5 6 7 8 9 10

Programmed 76 60 85 58 91 75 82 64 79 88
Materials

Lectures 81 52 87 70 86 77 90 63 85 83

Find a 98% confidence interval for the mean difference in scores of the two learning
procedure. Assume normality.
CHAPTER 8. ESTIMATION

8.4 ESTIMATING PROPORTIONS

X
In a binomial experiment a point estimator of the proportion p is p , where X
n
represents the number of successes in n trials.

If the unknown proportion is not expected to be too close to 0 or 1 and n is large, an

approximate (1- ) 100% confidence interval for p is given by

p q p q
p z / 2 , p z / 2
n n

Example:

In a random sample of 200 students who enrolled in Math 17, 138 passed on their
first take. Construct a 95% confidence interval for the population proportion of
students who passed Math 17 on their first take.

8.5 ESTIMATING THE DIFFERENCE OF TWO PROPORTIONS

Given 2 independent random samples of size n1 and n2 a point estimator of the

X Y
difference between the two proportions p1 and p2 is given by p 1 p 2 ,
n1 n2
where X is the number of successes in n2 trials (first sample) and Y is the number of
successes in n2 trials (second sample).

An approximate (1- ) 100% confidence interval for p1- p2 when n1 and n2 are large
is
 p 1q1 p 2 q 2 p 1q1 p 2 q 2
( p 1 p 2 ) z / 2 , ( p 1 p 2 ) z / 2
n1 n2 n1 n2

Example:

In a random sample of 200 students, 78 of the 120 females and 60 of the 80 males
passed in Math 17on their first take. Construct a 95% confidence interval for p1-p2,
where p1 and p2 are the true proportions of females and males, respectively, who
passed Math 17 on their first take.

ELEMENTARY STATISTICS

8.6 SAMPLE SIZE DETERMINATION

Sample Size for Estimating

___
In random sampling if X will be used to estimate we can be (1- ) 100%
confident that that the error will not exceed a specified amount, e, when the sample
size is

z
2

n /2
e

Example:

An electrical firm manufactures light bulbs that have a length of life that is large a
sample is needed if we wish to be 95% confident that the sample mean will be within
10 hours of the true mean?

Sample Size for Estimating p

If p will be used to estimate p, then we can be (1- ) 100% confident that the error
will not exceed a specified amount, e, when the sample size is

z 2 / 2 pq
n
e2
 When the value of p is unknown or cannot be approximated, then using p=0.5
produces the maximum value of pq=0.25. Hence a conservative formula for the
sample size is

z 2 / 2
n 2
4e

Example:

Use the conservative formula to determine the sample size needed if we want to be
95% confident that our estimate of p is within 0.05 of the true value.

1. The critical region or rejection region is the set of values of the test statistic for
which the null hypothesis will be rejected. The acceptance region is the set values
of the test statistic for which the null hypothesis will not be rejected. The acceptance
and rejection regions are separated by a critical value of the test statistic.

2. The Type I error is the error made by rejecting the null hypothesis when it is true.
The probability of a Type I error is denoted by .

The Type II error is the error made by accepting (not rejecting) the null hypothesis
when it is false. The probability of a Type II error is denoted by .

Null Hypothesis
Decision TRUE FALSE
Reject Ho Type I error Correct Decision

Accept Ho Correct Decision Type II error

3. The level of significance, , is the maximum probability of Type I error the

researcher is willing to commit.

Steps in Hypothesis Testing

1. State the null hypothesis (Ho) and alternative hypothesis (Ha).

2. Choose the level of significance .
3. Select the appropriate test statistic and establish the critical region.
4. Collect the data and compute the value of the test statistic from the sample data.
5. Make the decision. Reject Ho if the value of the test statistic belongs in the critical
region. Otherwise, do not reject Ho.
 TEST OF HYPOTHESIS

TESTING A HYPOTHESIS ON THE POPULATION MEAN

Ho Test Statistics Ha Critical region

a. and 22 known
2
1

< o z < z
X o
1- 2 = o Z > o z > z
/ n o
z z / 2
b. 12 and 22 but unknown
X o < o t < t
t
S/ n > o t > t
n 1 o t> t / 2

Remarks:

The above tests are exact -level tests for a sample from a normal distribution. However,
they provide good approximate -level test when distribution is not normal provided that
the sample size is large, i.e. n > 30.

If is unknown and n > 30, use the test in (a) replacing the test statistic by

X o
Z
S/ n

Examples:
Test Ho: =50 vs. Ha: 50 if a random sample 16 subjects had mean 48 and standard
deviation of 5.8 at 0.05 level of significance. Assume that the sample was taken form a
Normal population with standard deviation of 6.

It is claimed that an automobile is driven on the average less than 25,000 kilometers per
year. To test this claim, a random sample of 100 automobile owners are asked to keep a
record of the kilometres they travel. Would you agree with this claim if the random sample
showed an average of 23,000 kilometers and a standard deviation of 3,900 kilometers? Use
a 0.01 level of significance.

According to Dietary Goals for the United States (1977), high sodium intake maybe related
to ulcers, stomach cancer, and migraine headaches. The human requirement for salt is only
230 milligrams per day, which is surpassed in most single servings of ready- to-eat cereals.
A random sample of 20 similar servings of Special K had mean sodium content of 244
milligrams of sodium and a standard deviation of 24.5 milligrams. Is there sufficient
evidence to believe that the average sodium content for a single servings of Special K
exceeds the human requirements for salt at = 0.025? at = 0.05? at =0.10? Assume
normality.

ELEMENTARY STATISTICS

The following remarks hold for any test:

1. For the same data set, as increases the size of the critical region also increases.
Consequently, if Ho is rejected at level of significance then Ho will also be rejected
at a higher level of significance using the same data. For example, if Ho is rejected
at = 0.05 then testing at = 0.1 will also lead to the rejection of Ho. However,
Ho will not necessarily be rejected at = 0.01.

2. The Type I error and Type II error are related. For a fixed sample size n, a decrease
in the probability of one will result in an increase in the probability of the other.
However increasing the sample size will result in the reduction of both probabilities.

3. An alternative way to report the results of the test is to report the p-value. The p-
value is the smallest value of for which Ho will be rejected based on sample
information. Reporting the p-value will allow the reader of the published research to
evaluate the extent to which the data disagree with Ho. In particular it enables each
reader to choose their personal value of .

If p-value then Ho is rejected. Otherwise, Ho is not rejected.

9.3 TESTING THE DIFFERENCE BETWEEN TWO POP`N MEANS

Based on 2 independent samples

Ho Test Statistics Ha Critical region
a. 1 and 2 known
2 2

1- 2 < do z < z
1- 2 = do 1- 2 > do z > z
 ( X 1 X 2 ) do 1- 2 do z z / 2
z
( 12 / n1 ) 22 / n2
b. 12 = 22 but unknown
( X 1 X 2 ) do
t
S p (1 / n1 ) (1 / n2 ) t < t
1- 2 < do
1- 2 = do n1 n2 2 1- 2 > do t > t
(n1 1) S12 (n2 1) S 22 1- 2 do t> t / 2
S p2
n1 n2 2
c. 12 22 and unknown
( X 1 X 2 ) do
t
( S 12 / n1 ) ( S 22 / n2 ) 1- 2 < do
t < t
1- 2 = do 1- 2 > do t > t
( S 12 / n1 ) ( S 22 / n2 )
1- 2 do t> t / 2
( S 12 / n1 ) ( S 22 / n2 ) 2

n1 1 n2 1

CHAPTER 9. TESTS OF HYPOTHESIS

Based on 2 related samples

Ho Test Statistic Ha Critical region
(d d o D < do t < t
D = do t
Sd / n D > do t > t
n 1 D do
t> t / 2

Remark: The remarks made in Chapter 8.3 relative to use of a given statistic apply to the
tests describe here.

Examples:

1. A statistics test was given to 50 girls and 75 boys. The girls made an average of 80 with
a standard deviation of 4 and the boys hand an average of 86 with a standard deviation
of 6. Is there sufficient evidence at 0.05 level of significance that the average grades of
girls and boys differ?

2. A study was made to determine if the subject matter in a physics course is better
understood when a lab constitutes part of the course. Students were allowed to choose
between a 3-unit course without lab and 4-unit course with lab. In the section with lab,
a sample of 11 students had an average grade of 85 with a standard deviation of 4.7, and
in the section without lab, a sample of 17 students had an average grade of 79 with
standard deviation of 6.1. Would you say that the laboratory course increases the average
grade by more than 5 points? Use a 0.01 level of significance and assume the populations
to be approximately normally distributed with equal variances.
3. The following data represent the running time of films produced by two motion picture
companies:
Time (minutes)

Company 1 103 94 110 87 98

Company 2 97 82 123 92 175 88 118

Test the hypothesis that the average running time of films produced by company 2
exceeds the average running time of films produced by company 1 by 10 minutes against
the one-sided alternative that the distributions of the times to be approximately normal
with unequal variances.

4. A taxi company is trying to decide whether use of radial tires instead of regular belted
tires improves fuel economy. Twelve cars were driven twice over a prescribed test
course, each time using a different type of tires (radial and belted) in random order. The
mileages, in kilometers per liter, were recorded as follows:

ELEMENTARY STATISTICS

Kilometers per liter

Cars Radial Tires Belted Tires

1 4.2 4.1
2 4.7 4.9
3 6.6 6.2
4 7.0 6.9
5 6.7 6.8
6 4.5 4.4
7 5.7 5.7
8 6.0 5.8
9 7.4 6.9
10 4.9 4.7
11 6.1 6.0
12 5.2 4.9

At the 0.025 level of significance, can we conclude that cars equipped with radial
tires give better fuel economy than those equipped with belted tires? Assume the
populations to be normally distributed.

9.4 TESTING A HYPOTHESIS ON PROPORTIONS

Consider the problem of testing the hypothesis that the proportion of successes in a
binomial experiment equals some specified value.
 If the unknown proportion is not expected to be too close to 0 or 1 and n is large, a large
sample approximation is given by:

Ho Test Statistic Ha Critical region

x npo p < po z < z
p= po Z p > po z > z
npo po
p po
z> z / 2

Example:

A commonly prescribed drug on the market for relieving nervous tension is believed to
be only 60% effective. Experimental results with a new drug administered to a random
sample of 100 adults who were suffering from nervous tension showed that 70 receive relief.
Is this sufficient evidence to conclude that the new drug is superior to the one commonly
prescribed? Use a 0.05 level of significance.

CHAPTER 9. TESTS OF HYPOTHESIS

9.5 TESTING THE DIFFERENCE BETWEEN TWO PROPORTIONS

Consider a situation in which a researcher wishes to compare the proportions of an

attribute between two populations. For example he is interested in assessing whether the
proportions of female household heads is greater in urban areas than in rural localities; or
a marketing manager would consider packaging a product towards working mothers if based
on a planned research, the proportion of potential purchasers is higher in this group
compared to the group of non-working mothers. Thus, the researcher is, in general interested
in testing the null hypothesis Ho: p1 = p2 where p1 and p2 are two population proportions of
interest.

The testing procedure involves selection of independent samples of size n1 and n2 from
two binomial populations. The sample proportion p]1 and p]2 are computed and the
x x
common (population) proportion p is given as the pooled estimate p] 1 2
n1 n2
where x1 and x2 are the observed number of units processing the attribute of interest in the
two sample. The test is as follows:

Ho Test Statistic Ha Critical region

p]1 - p]2 p < p2 z < z
p1 = p2 Z p > p2
1 1 z > z
p]q] p p2
n1 n2 z> z / 2

Example:
 In a survey of 200 students, 78 of the 120 females in the sample passed Math 17 on
their first take while this figure is 60 among the 80 males. Will you agree that the
proportion of males who passed Math 17 on their first take is higher than the proportion
of males who passed the same course on their take? Test at = 0.05.

CHAPTER 9
Test of Hypothesis

9.1 BASIC CONCEPTS OF STATISTICAL HYPOTHESIS TESTING

Definition of Terms

4. A statistical hypothesis is an assertion or conjecture concerning one or more

populations.

5. The null hypothesis (Ho) is the hypothesis that is being tested; it represents what
the experimenter doubts to be true.

6. The alternative hypothesis (Ha) is the operational statement of the theory that the
experimenter believes to be true and wishes to prove. It is contradiction of the null
hypothesis.

7. A one-tailed test of hypothesis is a test where the alternative hypothesis specifies a

one-directional difference for the parameter of interest.

Examples:

a. Ho: = 14 vs. Ha: > 14

b. Ho: = 14 vs. Ha: < 14
c. Ho: 1 - 2 = o vs. Ha: 1 - 2 > o
d. Ho: 1 - 2 = o vs. Ha: 1 - 2 < o

A two-tailed test of hypothesis is a test where the alternative hypothesis does not specify
a directional difference for the parameter of interest.
Examples:

a. Ho: = 14 vs. Ha: 14

b. Ho: 1 - 2 = o vs. Ha: 1 - 2 o

8. A test statistic is a statistic whose value is calculated from sample measurements

and on which the statistical decision will be based.

ELEMENTARY STATISTICS

9.6. TEST FOR INDEPENDENCE

The test for independence is used to determine whether two variables are related or not.
For example we might test whether a person `s music preference is related to his intelligence
as measured by IQ. We their take a random sample and for each subject determine his music
preference and classify his IQ into different categories (high, medium, low). The observed
frequencies are presented in what is known as a contingency table shown below:

Music IQ
Preference High Medium Low Total
Classical 40 26 17 83
Pop 47 59 25 131
Rock 83 104 79 266
Total 170 189 121 480

A contingency table containing r rows and c columns is referred to as an rxc table.

The row and column totals are called marginal frequencies. Note that in a test for
independence, these marginal frequencies are not fixed in advance but depend instead on
the way the sample distributed itself across the various cells in the table.

Procedure:

1. State the null and alternative hypothesis.

Ho: The two variables are independent

Ha: The two variables are not independent

2. Choose the level of significance.

3. Compute the test statistic, given by

 r c (Oij Eij ) 2
x
2

i 1 j 1 Eij

where Oij= observed number of cases in the ith row of the jth column
Eij= expected number of cases under Ho
(column to tal) x(row total)

Grand total

4. Decision Rule: Rejected Ho if x2 > x2a ,(r-1)(c-1)

CHAPTER 9. TESTS OF HYPOTHESIS

Remarks:

1. The test is valid if at least 80% of the cell has expected frequencies of at least 5 and no
cell has an expected frequency 1.

2. If many expected frequencies are very small, researchers commonly combine categories
of variables to obtain a table having larger cell frequencies. Generally, one should not
pool categories unless there is a natural way to combine them.

3. For a 2x2 contingency table, a correction called Yates` correction for continuity is
applied. The formula then becomes

r c ( Oij Eij - 0.5) 2

x
2

i 1 j 1 Eij

Example:

Using the table above:

Ho: Music preference and intelligence are independent

Ha: Music preference and intelligence are not independent

Music IQ
Preference High Medium Low Total

Classical 40 (29.4) 26 (32.7) 17 (20.9) 83

Pop 47 (46.4) 59 (51.6) 25 (33.0) 131
Rock 83 (94.2) 104 (104.7 79 (67.1) 266

Total 170 189 121 480

r c (Oij Eij ) 2
x 2
i 1 j 1 Eij
 = 12.38

at = 0.05, x 24 = 9.488

Decision: Since 12.38 > 9.488, rejected Ho. There is sufficient evidence at 0.05 level
of significance that music preference and intelligence are not independent.

CHAPTER 10

Regression and Correlation

0.1 Correlation Coefficient

Definition: The linear correlation coefficient, denoted by (rho), is a measure of the

strength of the linear relationship existing between two variables, X and Y,
that is independent of their respective scales of measurement.

Remarks:

-1 1
A positive means that the lines slopes upward to the right; negative means
that is slopes downward to the right.
When is 1 or -1, there is perfect linear relationship between X and Y and all
the points (x,y) fall on the straight line. A close to 1 or -1 indicates a strong
linear relationship but it does not necessarily imply that X and Y or Y causes X.
It is possible that a third variable may have caused the change in both x and y,
producing the observed relationship.
If - 0 then there is no linear correlation between X and Y. A value of = 0,
however, does not mean a lack of association, hence, if a strong quadratic
relationship exists between X and Y, we will obtain a zero correlation to indicate
a nonlinear relationship.

Definition: The Pearson product moment coefficient or correlation, denoted by r, is

n
n n
n X iYi X i Yi
r i 1 i 1 i 1
2
2

n X 2 X n Y 2 Y
n n

i 1 i i 1 i i 1 i i 1 i

Remarks:
 R is used to estimate based on a random sample of n pairs of measurements (Xi,
Yi), i-1,,n.
-1 r 1
Just like , when r = 1 or -1, all the points (xi,yi), i-1,n, fall on a straight line; when
r=0, they are scattered and give no evidence of a linear relationship. Any other value
of r suggests the degree to which the points tend to be linearly related.

CHAPTER 10. REGRESSION AND CORRELATION

________________________________________________________________________

Some typical Scatterplots with Approximate Values of r:

(a) Strong positive linear correlation; r is near 1

y *
**
* *
*
**
*

x
(b) Strong negative linear correlation; r is near -1

y *
**
* *
*
**
*
x

(c) No apparent linear correlation; r is near 0

y
* * * *
* * * * *
* * *
* *
*
x
(d) Quadratic relation, r is near 0

y
*
* *
* *
* *
* *
 ELEMENTARY STATISTICS

Example: Consider the data given below. Let X represent the lot size Y represent the
man hours required.

Man Hours Observation Lot Size

(Y) No. (X)
1 0 73
2 20 50
3 60 128
4 80 170
5 40 87
6 50 108
7 60 135
8 30 69
9 70 148
10 60 132

Construct the scatterplot and computer r.

 Scatter Plot Lot Size versus Man Hours

180
160
140
MAN HOURS

120
100
80
60
40
20
0
0 10 20 30 40 50 60 70 80 90
LOT SIZE

CHAPTER 10. REGRESSION AND CORRELATION

10.2 Testing the Correlation Coefficient

Ho Test Statistic Ha Critical Region

r n2 t < t
t <0
=0 1 r2 >0
t > t
0 t> t / 2
v=n-2

10.3 Simple Linear Regression

X = 500
Y = 1100
Equation of a Straight Line XY = 61800
X2 = 28400
y = 0 + 1 x where = 0 = Y2
y-interpret; the value of y
= 134660
when x=0 r = 0.99780
1 = slope of the line; change in y
for a 1-unit increase in x
Deterministic Model vs. Probabilistic Model

The linear model y = 0 + 1x is said to be deterministic mathematical model

because, when a value of x is redistributed into a equation, the value of y is
determined and no allowance is made for error.

In contrast, the linear model y = 0 + 1x + (where is a random error. The

difference between an observed value of y and mean of y for a given value of x) is
said to be probabilistic mathematical model because this model assumes that for
any given value of x the observed value of y varies in a random manner and
possesses a probability distribution with mean E(YX-x) = 0 + 1x.

Definition: The simple linear regression model is given by:

Y = 0 + 1x +

where Y = responsive variable

X = explanatory or predictor variable
= random error
0 = t-interpret
1 = slope of the line

Linear regression models that involve two or more explanatory variables are called
multiple regression models.

ELEMENTARY STATISTIC

Assumptions of the Model

For any given value x, the response variable Y possesses a normal distribution, with
a mean value given by the equation E(YX-x) = 0 + 1x and with a variance of 2.
Furthermore, any one value of Y is independent of every other value.

Estimating 0 and 1

The formulas for b0 (estimate of 0) and b1 (estimate of 1) are derived using the
method of least squares where the best-fitting line is selected as the once that
minimizes the sum of squares of the deviations of the observed value of y from those
predicted by the model. The formulas are
 n
n n
n X iYi X 1 Y1
b1 i 1 n i 1 n i 1

n X 12 X 1
i 1 i 1

b0 y b1 x

Predicting the Value of Y Given X=x

The predicted value of Y, denoted by , is computed x in the prediction equation.

= b0 + b1x

Remarks:

The calculated prediction equation is appropriate only for relevant range of X that
includes all values of X used in developing the regression model. Hence, when
predicting y for a given value of X, one may interpolate only within this relevant
range of the X values. Extrapolation in predicting Y for values of X outside the
relevant range would result in a serious prediction error.

If X = 0 is not included in the range of the sample data, the b0 will not have a
significant interpretation.

CHAPTER 10. REGRESSION AND CORRELATION

Coefficient of Determination

The coefficient of determination is defined as the proportion of the variability in the

observed values of Y that can be explained by X. Denoted by R2, this coefficient is nothing
but the square of the correlation coefficient between X and Y.

Inferences Concerning the Slope of the Line, 1

An estimator for 2 is

SSE ( y y )
i
2

S2 i 1
n2 n2
 where SSE stands for sum of squares of errors.

A (1-) 100% Confidence Interval for 1 is

(b1 t /2(v=n 2)Sb1, b1 + t /2(v=n 2) Sb1)

s2
where s b1 2
n
X1
X 12 i 1
n

i 1 n

Test of Hypothesis Concerning 1

Ho Test Statistic Ha Critical Region

b t < t
t 1 1 < 0
S b1 t > t
1 = 0 1 > 0
1 0 t> t / 2
v=n-2

ELEMENTARY STATISTICS

Example:

Suppose a researcher wishes to investigate the relationship between the achieved grade-
point index (GPI) and the starting salary of recent graduates majoring in business. A random
sample of 30 recent graduates majoring in business is drawn, and the data pertaining to the
GPI and Starting salary (in thousands of dollars) are recorded for each individual in the
following table:

Individual GPI Starting Salary

No. (X) (Y)
1 2.7 17.0
2 3.1 17.0
3 3.0 18.6
4 3.3 20.5
 5 3.1 19.1
6 2.4 16.4
7 2.9 19.3
8 2.1 14.5
9 2.6 15.7
10 3.2 18.6
11 3.0 19.5
12 2.2 15.0
13 2.8 18.0
14 3.2 20.0
15 2.9 19.0
16 3.0 17.4
17 2.6 17.3
18 3.3 18.1
19 2.9 18.0
20 2.4 16.2
21 2.8 17.5
22 3.7 21.3
23 3.1 17.2
24 2.8 17.0
25 3.5 19.6
26 2.7 16.6
27 2.6 15.0
28 3.2 18.4
29 2.9 17.3
30 3.0 18.5

CHAPTER 10. REGRESSION AND CORRELATION

a. Find the equation of the regression line.

b. Find an estimate for the starting salary if the GPI is 2.5
c. Test for the significance of 1 at = 0.05.
d. Compute and interpret the correlation coefficient and the coefficient of
determination.
e. Test for the significance of at the 0.01 level of significance

Scatter Diagram of Grade-Point Index versus Starting Salary

 25.0

20.0

STARTING SALARY
15.0

10.0

5.0

0.0
0.0 1.0 2.0 3.0 4.0
GRADE-POINT INDEX

b0 = 6.418245
b1 = 3.928191

r = 0.865088
R = 0.748377

X = 87.0
Y = 534.3
XY = 1564.24
X2 = 256.06
Y2 = 9593.41