Introduction to Statistics and probability

CHAPTER 1
1. INTRODUCTION
Definition and classifications of statistics
Definition:
We can define statistics in two ways.
1. Plural sense.
It is an aggregate or collection of numerical facts.
2. Singular sense (formal definition)
Statistics is defined as the science of collecting, organizing, presenting, analyzing
and interpreting numerical data for the purpose of assisting in making a more
effective decision.
Classifications:
Depending on how data can be used statistics is sometimes divided in to two main
areas or branches.
1. Descriptive Statistics: is concerned with summary calculations, graphs, charts
and tables.
2. Inferential Statistics: is a method used to generalize from a sample to a
population. For example, the average income of all families (the population) in
Ethiopia can be estimated from figures obtained from a few hundred (the sample)
families.
 It is important because statistical data usually arises from sample.
 Statistical techniques based on probability theory are required.

Stages in Statistical Investigation

There are five stages or steps in any statistical investigation.

1. Collection of data: the process of measuring, gathering, assembling the raw
data up on which the statistical investigation is to be based.
 Data can be collected in a variety of ways; one of the most common
methods is through the use of survey. Survey can also be done in different
methods, three of the most common methods are:
 Telephone survey
 Mailed questionnaire
 Personal interview.
Exercise: discuss the advantage and disadvantage of the above three methods
with respect to each other.
2. Organization of data: Summarization of data in some meaningful way, e.g.
table form

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3. Presentation of the data: The process of re-organization, classification,
compilation, and summarization of data to present it in a meaningful form.
4. Analysis of data: The process of extracting relevant information from the
summarized data, mainly through the use of elementary mathematical operation.
5. Inference of data: The interpretation and further observation of the various
statistical measures through the analysis of the data by implementing those
methods by which conclusions are formed and inferences made.
 Statistical techniques based on probability theory are required.
Definitions of some terms
a. Statistical Population: It is the collection of all possible observations of a
specified characteristic of interest (possessing certain common property) and
being under study.
b. Sample: It is a subset of the population, selected using some sampling technique
in such a way that they represent the population.
c. Sampling: The process or method of sample selection from the population.
d. Sample size: The number of elements or observation to be included in the
sample.
e. Census: Complete enumeration or observation of the elements of the
population. Or it is the collection of data from every element in a population
f. Parameter: Characteristic or measure obtained from a population.
g. Statistic: Characteristic or measure obtained from a sample.
h. Variable: It is an item of interest that can take on many different numerical
values.
Types of Variables or Data:
1. Qualitative Variables are nonnumeric variables and can't be measured.
Examples include gender, religious affiliation, and state of birth.
2. Quantitative Variables are numerical variables and can be measured. Examples
include balance in checking account, number of children in family. Note that
quantitative variables are either discrete (which can assume only certain values, and
there are usually "gaps" between the values, such as the number of bedrooms in your
house) or continuous (which can assume any value within a specific range, such as the
air pressure in a tire.)
Applications, Uses and Limitations of statistics
Applications of statistics:
 In almost all fields of human endeavor.
 Almost all human beings in their daily life are subjected to obtaining
numerical facts e.g. abut price.
 Applicable in some process e.g. invention of certain drugs, extent of
environmental pollution.
 In industries especially in quality control area.

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Uses of statistics:
The main function of statistics is to enlarge our knowledge of complex phenomena.
The following are some uses of statistics:
1. It presents facts in a definite and precise form.
2. Data reduction.
3. Measuring the magnitude of variations in data.
4. Furnishes a technique of comparison
5. Estimating unknown population characteristics.
6. Testing and formulating of hypothesis.
7. Studying the relationship between two or more variable.
8. Forecasting future events.
Limitations of statistics
As a science statistics has its own limitations. The following are some of the
limitations:
 Deals with only quantitative information.
 Deals with only aggregate of facts and not with individual data items.
 Statistical data are only approximately and not mathematical correct.
 Statistics can be easily misused and therefore should be used be experts.
Scales of measurement
Proper knowledge about the nature and type of data to be dealt with is essential in
order to specify and apply the proper statistical method for their analysis and
inferences. Measurement scale refers to the property of value assigned to the data
based on the properties of order, distance and fixed zero.
In mathematical terms measurement is a functional mapping from the set of objects
{Oi} to the set of real numbers {M(Oi)}.

The goal of measurement systems is to structure the rule for assigning numbers to
objects in such a way that the relationship between the objects is preserved in the
numbers assigned to the objects. The different kinds of relationships preserved are
called properties of the measurement system.
Order
The property of order exists when an object that has more of the attribute than
another object, is given a bigger number by the rule system. This relationship must
hold for all objects in the "real world".

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The property of ORDER exists
When for all i, j if Oi > Oj, then M(Oi) > M(Oj).
Distance
The property of distance is concerned with the relationship of differences between
objects. If a measurement system possesses the property of distance it means that the
unit of measurement means the same thing throughout the scale of numbers. That is,
an inch is an inch, no matters were it falls - immediately ahead or a mile downs the
road.
More precisely, an equal difference between two numbers reflects an equal
difference in the "real world" between the objects that were assigned the numbers.
In order to define the property of distance in the mathematical notation, four objects
are required: Oi, Oj, Ok, and Ol . The difference between objects is represented by
the "-" sign; Oi - Oj refers to the actual "real world" difference between object i and
object j, while M(Oi) - M(Oj) refers to differences between numbers.
The property of DISTANCE exists, for all i, j, k, l
If Oi-Oj ≥ Ok- Ol then M(Oi)-M(Oj) ≥ M(Ok)-M( Ol ).
Fixed Zero
A measurement system possesses a rational zero (fixed zero) if an object that has
none of the attribute in question is assigned the number zero by the system of rules.
The object does not need to really exist in the "real world", as it is somewhat
difficult to visualize a "man with no height". The requirement for a rational zero is
this: if objects with none of the attribute did exist would they be given the value
zero. Defining O0 as the object with none of the attribute in question, the definition
of a rational zero becomes:
The property of Fixed Zero exists if M(O0) = 0.
The property of fixed zero is necessary for ratios between numbers to be meaningful.
Scale Types
Measurement is the assignment of numbers to objects or events in a systematic
fashion. Four levels of measurement scales are commonly distinguished: nominal,
ordinal, interval, and ratio and each possessed different properties of measurement
systems.
Nominal Scales
Nominal scales are measurement systems that possess none of the three properties
stated above.
 Level of measurement which classifies data into mutually exclusive, all
inclusive categories in which no order or ranking can be imposed on the data.
 No arithmetic and relational operation can be applied.
Examples:
o Political party preference (Republican, Democrat, or Other,)
o Sex (Male or Female.)
o Marital status(married, single, widow, divorce)

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o Country code
o Regional differentiation of Ethiopia.
Ordinal Scales
Ordinal Scales are measurement systems that possess the property of order, but not
the property of distance. The property of fixed zero is not important if the property
of distance is not satisfied.
 Level of measurement which classifies data into categories that can be ranked.
Differences between the ranks do not exist.
 Arithmetic operations are not applicable but relational operations are
applicable.
 Ordering is the sole property of ordinal scale.
Examples:
o Letter grades (A, B, C, D, F).
o Rating scales (Excellent, Very good, Good, Fair, poor).
o Military status.
Interval Scales
Interval scales are measurement systems that possess the properties of Order and
distance, but not the property of fixed zero.
 Level of measurement which classifies data that can be ranked and differences
are meaningful. However, there is no meaningful zero, so ratios are
meaningless.
 All arithmetic operations except division are applicable.
 Relational operations are also possible.
E.g. IQ, Temperature in oF.
Ratio Scales
Ratio scales are measurement systems that possess all three properties: order,
distance, and fixed zero. The added power of a fixed zero allows ratios of numbers to
be meaningfully interpreted; i.e. the ratio of Bekele's height to Martha's height is
1.32, whereas this is not possible with interval scales.
 Level of measurement which classifies data that can be ranked, differences are
meaningful, and there is a true zero. True ratios exist between the different
units of measure.
 All arithmetic and relational operations are applicable.
E.g. Weight, Height, Number of students, Age

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The following present a list of different attributes and rules for assigning numbers to
objects. Try to classify the different measurement systems into one of the four types
of scales. (Exercise)
1. Your checking account number as a name for your account.
2. Your checking account balance as a measure of the amount of money you have
in that account.
3. The order in which you were eliminated in a spelling bee as a measure of your
spelling ability.
4. Your score on the first statistics test as a measure of your knowledge of
statistics.
5. Your score on an individual intelligence test as a measure of your intelligence.
6. The distance around your forehead measured with a tape measure as a
measure of your intelligence.
7. A response to the statement "Abortion is a woman's right" where "Strongly
Disagree" = 1, "Disagree" = 2, "No Opinion" = 3, "Agree" = 4, and
"Strongly Agree" = 5, as a measure of attitude toward abortion.
8. Times for swimmers to complete a 50-meter race
9. Months of the year Meskerm, Tikimit…
10. Socioeconomic status of a family when classified as low, middle and upper
classes.
11. Blood type of individuals, A, B, AB and O.
12. Pollen counts provided as numbers between 1 and 10 where 1 implies there is
almost no pollen and 10 that it is rampant, but for which the values do not
represent an actual counts of grains of pollen.
13. Regions numbers of Ethiopia (1, 2, 3 etc.)
14. The number of students in a college;
15. the net wages of a group of workers;
16. the height of the men in the same town;

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Introduction to Statistics and probability

CHAPTER 2
2. METHODS OF DATA PRESNTATION
INTRODUCTION TO METHODS OF DATA COLLECTION
There are two sources of data:
1. Primary Data
 Data measured or collect by the investigator or the user directly from
the source.
 Two activities involved: planning and measuring.
a) Planning:
 Identify source and elements of the data.
 Decide whether to consider sample or census.
 If sampling is preferred, decide on sample size, selection
method,… etc
 Decide measurement procedure.
 Set up the necessary organizational structure.
b) Measuring: there are different options.
 Focus Group
 Telephone Interview
 Mail Questionnaires
 Door-to-Door Survey
 Mall Intercept
 New Product Registration
 Personal Interview and
 Experiments are some of the sources for collecting the
primary data.
2. Secondary Data
 Data gathered or compiled from published and unpublished sources or
files.
 When our source is secondary data check that:
 The type and objective of the situations.
 The purpose for which the data are collected and
compatible with the present problem.
 The nature and classification of data is appropriate to our
problem.
 There are no biases and misreporting in the published
data.
Note: Data which are primary for one may be secondary for the other.

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Having collected and edited the data, the next important step is to organize it. That is
to present it in a readily comprehensible condensed form that aids in order to draw
inferences from it. It is also necessary that the like be separated from the unlike ones.
The presentation of data is broadly classified in to the following two categories:
 Tabular presentation
 Diagrammatic and Graphic presentation.
The process of arranging data in to classes or categories according to similarities
technically is called classification.
Classification is a preliminary and it prepares the ground for proper presentation of data.
Definitions:
 Raw data: recorded information in its original collected form, whether it be
counts or measurements, is referred to as raw data.
 Frequency: is the number of values in a specific class of the distribution.
 Frequency distribution: is the organization of raw data in table form using
classes and frequencies.
There are three basic types of frequency distributions
 Categorical frequency distribution
 Ungrouped frequency distribution
 Grouped frequency distribution
There are specific procedures for constructing each type.
1) Categorical frequency Distribution:
Used for data that can be place in specific categories such as nominal, or ordinal. e.g.
marital status.
Example: a social worker collected the following data on marital status for 25
persons. (M=married, S=single, W=widowed, D=divorced)
M S D W D
S S M M M
W D S M M
W D D S S
S W W D D
Solution:
Since the data are categorical, discrete classes can be used. There are four types of
marital status M, S, D, and W. These types will be used as class for the distribution. We
follow procedure to construct the frequency distribution.
Step 1: Make a table as shown.
Class Tally Frequency Percent
(1) (2) (3) (4)
M
S
D
W

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Step 2: Tally the data and place the result in column (2).
Step 3: Count the tally and place the result in column (3).
Step 4: Find the percentages of values in each class by using;
f
% * 100 Where f= frequency of the class, n=total number of value.
n
Percentages are not normally a part of frequency distribution but they can be added since
they are used in certain types diagrammatic such as pie charts.
Step 5: Find the total for column (3) and (4).
Combing all the steps one can construct the following frequency distribution.
Class Tally Frequency Percent 2)
(1) (2) (3) (4) 3)
M //// 5 20 4)
S //// // 7 28 5)
D //// // 7 28 6)
W //// / 6 24 7)

2) Ungrouped frequency Distribution

-Is a table of all the potential raw score values that could possible occur in the data along
with the number of times each actually occurred.
-Is often constructed for small set or data on discrete variable.
Constructing ungrouped frequency distribution:
 First find the smallest and largest raw score in the collected data.
 Arrange the data in order of magnitude and count the frequency.
 To facilitate counting one may include a column of tallies.
Example:
The following data represent the mark of 20 students.

80 76 90 85 80
70 60 62 70 85
65 60 63 74 75
76 70 70 80 85

Construct a frequency distribution, which is ungrouped.

Solution:
Step 1: Find the range, Range=Max-Min=90-60=30.
Step 2: Make a table as shown
Step 3: Tally the data.
Step 4: Compute the frequency.

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Mark Tally Frequency
60 // 2
62 / 1
63 / 1
65 / 1
70 //// 4
74 / 1
75 // 2
76 / 1
80 /// 3
85 /// 3
90 / 1

Each individual value is presented separately, that is why it is named ungrouped

frequency distribution.
8) Grouped frequency Distribution:
-When the range of the data is large, the data must be grouped in to classes that are more
than one unit in width.
Definitions:
 Grouped Frequency Distribution: a frequency distribution when several
numbers are grouped in one class.
 Class limits: Separates one class in a grouped frequency distribution from
another. The limits could actually appear in the data and have gaps between the
upper limits of one class and lower limit of the next.
 Units of measurement (U): the distance between two possible consecutive
measures. It is usually taken as 1, 0.1, 0.01, 0.001, -----.
 Class boundaries: Separates one class in a grouped frequency distribution from
another. The boundaries have one more decimal places than the row data and
therefore do not appear in the data. There is no gap between the upper boundary
of one class and lower boundary of the next class. The lower class boundary is
found by subtracting U/2 from the corresponding lower class limit and the upper
class boundary is found by adding U/2 to the corresponding upper class limit.
 Class width: the difference between the upper and lower class boundaries of
any class. It is also the difference between the lower limits of any two consecutive
classes or the difference between any two consecutive class marks.
 Class mark (Mid points): it is the average of the lower and upper class limits
or the average of upper and lower class boundary.
 Cumulative frequency: is the number of observations less than/more than or
equal to a specific value.

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 Cumulative frequency above: it is the total frequency of all values greater
than or equal to the lower class boundary of a given class.
 Cumulative frequency blow: it is the total frequency of all values less than or
equal to the upper class boundary of a given class.
 Cumulative Frequency Distribution (CFD): it is the tabular arrangement of
class interval together with their corresponding cumulative frequencies. It can be
more than or less than type, depending on the type of cumulative frequency used.
 Relative frequency (rf): it is the frequency divided by the total frequency.
 Relative cumulative frequency (rcf): it is the cumulative frequency divided
by the total frequency.
Guidelines for classes
1. There should be between 5 and 20 classes.
2. The classes must be mutually exclusive. This means that no data value can fall
into two different classes
3. The classes must be all inclusive or exhaustive. This means that all data values
must be included.
4. The classes must be continuous. There are no gaps in a frequency distribution.
5. The classes must be equal in width. The exception here is the first or last
class. It is possible to have an "below ..." or "... and above" class. This is
often used with ages.
Steps for constructing Grouped frequency Distribution
1. Find the largest and smallest values
2. Compute the Range(R) = Maximum - Minimum
3. Select the number of classes desired, usually between 5 and 20 or use Sturges
rule k  1  3.32 log n where k is number of classes desired and n is total number of
observation.
4. Find the class width by dividing the range by the number of classes and
rounding up, not off. w  R K .
5. Pick a suitable starting point less than or equal to the minimum value. The
starting point is called the lower limit of the first class. Continue to add the
class width to this lower limit to get the rest of the lower limits.
6. To find the upper limit of the first class, subtract U from the lower limit of
the second class. Then continue to add the class width to this upper limit to
find the rest of the upper limits.
7. Find the boundaries by subtracting U/2 units from the lower limits and
adding U/2 units from the upper limits. The boundaries are also half-way
between the upper limit of one class and the lower limit of the next class.
!may not be necessary to find the boundaries.
8. Tally the data.
9. Find the frequencies.

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10. Find the cumulative frequencies. Depending on what you're trying to
accomplish, it may not be necessary to find the cumulative frequencies.
11. If necessary, find the relative frequencies and/or relative cumulative
frequencies
Example*:
Construct a frequency distribution for the following data.
11 29 6 33 14 31 22 27 19 20
18 17 22 38 23 21 26 34 39 27
Solutions:
Step 1: Find the highest and the lowest value H=39, L=6
Step 2: Find the range; R=H-L=39-6=33
Step 3: Select the number of classes desired using Sturges formula;
k  1  3.32 log n =1+3.32log (20) =5.32=6(rounding up)
Step 4: Find the class width; w=R/k=33/6=5.5=6 (rounding up)
Step 5: Select the starting point, let it be the minimum observation
 6, 12, 18, 24, 30, 36 are the lower class limits.
Step 6: Find the upper class limit; e.g. the first upper class=12-U=12-1=11
 11, 17, 23, 29, 35, 41 are the upper class limits.
So combining step 5 and step 6, one can construct the following classes.
Class limits
6 – 11
12 – 17
18 – 23
24 – 29
30 – 35
36 – 41
Step 7: Find the class boundaries;
E.g. for class 1 Lower class boundary=6-U/2=5.5
Upper class boundary =11+U/2=11.5
 Then continue adding w on both boundaries to obtain the rest boundaries. By
doing so one can obtain the following classes.
Class boundary
5.5 – 11.5
11.5 – 17.5
17.5 – 23.5
23.5 – 29.5
29.5 – 35.5
35.5 – 41.5
Step 8: tally the data.
Step 9: Write the numeric values for the tallies in the frequency column.
Step 10: Find cumulative frequency.

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Step 11: Find relative frequency or/and relative cumulative frequency.
The complete frequency distribution follows:

Class Class boundary Class Tally Freq Cf (less than Cf (more rf. rcf (less than
limit Mark . type) than type) type
6 – 11 5.5 – 11.5 8.5 // 2 2 20 0.10 0.10
12 – 17 11.5 – 17.5 14.5 // 2 4 18 0.10 0.20
18 – 23 17.5 – 23.5 20.5 ////// 7 11 16 0.35 0.55

24 – 29 23.5 – 29.5 26.5 //// 4 15 9 0.20 0.75

30 – 35 29.5 – 35.5 32.5 /// 3 18 5 0.15 0.90
36 – 41 35.5 – 41.5 38.5 // 2 20 2 0.10 1.00
Diagrammatic and Graphic presentation of data.
These are techniques for presenting data in visual displays using geometric and pictures.
Importance:
 They have greater attraction.
 They facilitate comparison.
 They are easily understandable.
-Diagrams are appropriate for presenting discrete data.
-The three most commonly used diagrammatic presentation for discrete as well as
qualitative data are:
 Pie charts
 Pictogram
 Bar charts
Pie chart
- A pie chart is a circle that is divided in to sections or wedges according to the percentage
of frequencies in each category of the distribution. The angle of the sector is obtained
using:
Valueofthepart
Angleof sec tor  * 360
thewholequantity
Example: Draw a suitable diagram to represent the following population in a town.
Men Women Girls Boys
2500 2000 4000 1500
Solutions:
Step 1: Find the percentage.
Step 2: Find the number of degrees for each class.
Step 3: Using a protractor and compass, graph each section and write its name corresponding
percentage.

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 Introduction to Statistics and probability

Class Frequency Percent Degree

Men 2500 25 90
Women 2000 20 72
Girls 4000 40 144
Boys 1500 15 54

Pictogram
-In these diagram, we represent data by means of some picture symbols. We
decide about a suitable picture to represent a definite number of units in which
the variable is measured.
Example:

Ex. Draw a pictogram to represent the following population of a town.

Year 1989 1990 1991 1992
Population 2000 3000 5000 7000

Bar Charts:
- A set of bars (thick lines or narrow rectangles) representing some magnitude over time
space.
- They are useful for comparing aggregate over time space.
- Bars can be drawn either vertically or horizontally.
- There are different types of bar charts. The most common being :
 Simple bar chart
 Component or sub divided bar chart.
 Multiple bar charts.
Simple Bar Chart

-Are used to display data on one variable.

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-They are thick lines (narrow rectangles) having the same breadth. The magnitude of a
quantity is represented by the height /length of the bar.
Example: The following data represent sale by product, 1957- 1959 of a given company for
three products A, B, C. Solutions:

Product Sales($) Sales($) Sales($) Sales by product in 1957

In 1957 In 1958 In 1959 30

25

A 12 14 18

Sales in $
20
15

B 24 21 18 10
5

C 24 35 54 0
A B C
product

Component Bar chart

-When there is a desire to show how a total (or aggregate) is divided in to its component parts,
we use component bar chart.

-The bars represent total value of a variable with each total broken in to its component parts and
different colours or designs are used for identifications
Example:
Draw a component bar chart to represent the sales by product from 1957 to 1959.
Solutions:
SALES BY PRODUCT 1957-1959

100

80
Sales in $

Product C
60
Product B
40
Product A
20

0
1957 1958 1959
Year of production

Multiple Bar charts

- These are used to display data on more than one variable.
- They are used for comparing different variables at the same time.
Example:
Draw a component bar chart to represent the sales by product from 1957 to 1959.

Solutions:

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 Introduction to Statistics and probability

Sales by product 1957-1959

60
50
Sales in $

40 Product A
30 Product B
20 Product C

10
0
1957 1958 1959
Year of production

Graphical Presentation of data

- The histogram, frequency polygon and cumulative frequency graph or ogive are most
commonly applied graphical representation for continuous data.
Procedures for constructing statistical graphs:
 Draw and label the X and Y axes.
 Choose a suitable scale for the frequencies or cumulative frequencies and label it on the
Y axes.
 Represent the class boundaries for the histogram or ogive or the mid points for the
frequency polygon on the X axes.
 Plot the points.
 Draw the bars or lines to connect the points.
Histogram
A graph which displays the data by using vertical bars of various heights to represent
frequencies. Class boundaries are placed along the horizontal axes. Class marks and class limits
are sometimes used as quantity on the X axes.
Example: Construct a histogram to represent the previous data (example *).
Frequency Polygon:
- A line graph. The frequency is placed along the vertical axis and classes mid points are
placed along the horizontal axis. It is customer to the next higher and lower class interval
with corresponding frequency of zero, this is to make it a complete polygon.
Example: Draw a frequency polygon for the above data (example *).
Solutions:

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 Introduction to Statistics and probability
8

Value Frequency
2

0
2.5 8.5 14.5 20.5 26.5 32.5 38.5 44.5

Clas s Mid points

Ogive (cumulative frequency polygon)

- A graph showing the cumulative frequency (less than or more than type) plotted against
upper or lower class boundaries respectively. That is class boundaries are plotted along the
horizontal axis and the corresponding cumulative frequencies are plotted along the vertical
axis. The points are joined by a free hand curve.
Example: Draw an ogive curve(less than type and more than type) for the above data.

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 Introduction to Statistics and probability
CHAPTER 3
3. MEASURES OF CENTERAL TENDENCY
Introduction
 When we want to make comparison between groups of numbers it is good to have a
single value that is considered to be a good representative of each group. This single
value is called the average of the group. Averages are also called measures of central
tendency.
 An average which is representative is called typical average and an average which is not
representative and has only a theoretical value is called a descriptive average
Importance:
 To comprehend the data easily.
 To facilitate comparison.
 To make further statistical analysis.
The Summation Notation:
 Let X1, X2, X3 …XN be a number of measurements where N is the total number of
observation and Xi is ith observation.
 Very often in statistics an algebraic expression of the form X1+X2+X3+...+XN
is used in a formula to compute a statistic. It is tedious to write an expression
like this very often, so mathematicians have developed a shorthand notation to
represent a sum of scores, called the summation notation.
N
 The symbol X
i 1
i is a mathematical shorthand for
The expression is read, "the sum of X sub i from i equals 1 to N." It means "add up
all the numbers."
Example: Suppose the following were scores made on the first homework
assignment for five students in the class: 5, 7, 7, 6, and 8. In this example set of five
numbers, where N=5, the summation could be written:

The "i=1" in the bottom of the summation notation tells where to begin the
sequence of summation. If the expression were written with "i=3", the summation
would start with the third number in the set. For example:

In the example set of numbers, this would give the following result:

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The "N" in the upper part of the summation notation tells where to end the sequence
of summation. If there were only three scores then the summation and example
would be:

Sometimes if the summation notation is used in an expression and the expression

must be written a number of times, as in a proof, then a shorthand notation for the
shorthand notation is employed. When the summation sign "∑" is used without
additional notation, then "i=1" and "N" are assumed.
For example:

Properties of Summation
n
1.  k  nk
i 1
where k is any constant
n n
2.  kX
i 1
i  k  X i where k is any constant
i 1
n n
3.  (a  bX i )  na  b X i where a and b are any constant
i 1 i 1
n n n

4. (X
i 1
i  Yi )   X i   Yi
i 1 i 1

5.
Example: considering the following data determine
X Y
5 6
7 7
7 8
6 7
8 8
5
a) X
i 1
i

5
b) Y
i 1
i

5
c)  10
i 1

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 Introduction to Statistics and probability
5
d) (X
i 1
i  Yi )
5
e) (X
i 1
i  Yi )
5
f) X Y
i 1
i i

5
g) X
2
i
i 1
5 5
h) ( X i )(  Yi )
i 1 i 1

Solutions:
5
a) X
i 1
i  5  7  7  6  8  33
5

b) Y
i 1
i  6  7  8  7  8  36
5

c) 10  5 *10  50
i 1
5
d) (X
i 1
i  Yi )  (5  6)  (7  7)  (7  8)  (6  7)  (8  8)  69  33  36
5
e) (X
i 1
i  Yi )  (5  6)  (7  7)  (7  8)  (6  7)  (8  8)  3  33  36
5

f) X Y
i 1
i i  5 * 6  7 * 7  7 * 8  6 * 7  8 * 8  241
5
g) X  5 2  7 2  7 2  6 2  8 2  223
2
i
i 1
5 5
h) ( X i )(  Yi )  33 * 36  1188
i 1 i 1

 Properties of measures of central tendency (a typical average should

posses the following)
 It should be rigidly defined.
 It should be based on all observation under investigation.
 It should be as little as affected by extreme observations.
 It should be capable of further algebraic treatment.
 It should be as little as affected by fluctuations of sampling.
 It should be ease to calculate and simple to understand.
Types of measures of central tendency

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There are several different measures of central tendency; each has its advantage and
disadvantage.
 The Mean (Arithmetic, Geometric and Harmonic)
 The Mode
 The Median
 Quintiles (Quartiles, Deciles and Percentiles)
The choice of these averages depends up on which best fit the property under
discussion.
The Arithmetic Mean
 Is defined as the sum of the magnitude of the items divided by the number of
items.
 The mean of X1, X2 ,X3 …Xn is denoted by A.M ,m or X and is given by:
X 1  X 2  ...  X n
X 
n
n

X i
X  i 1

n
 If X1 occurs f1 times
 If X2occurs f2 times
 If Xn occurs fn times
k

Then the mean will be f X i i , where k is the number of classes and

X  i 1
k

f
i 1
i

f
i 1
i n

Example: Obtain the mean of the following number

2, 7, 8, 2, 7, 3, 7
Solution:
Xi fi Xifi
2 2 4
3 1 3
7 3 21
8 1 8
Total 7 36

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4

f X i i
36
X  i 1
4
  5.15
f
7
i
i 1

Arithmetic Mean for Grouped Data

If data are given in the shape of a continuous frequency distribution, then the mean is
obtained as follows:
k

f i Xi
X  i 1
k
, Where Xi =the class mark of the ith class and fi = the frequency
f
i 1
i

of the ith class

Example: calculate the mean for the following age distribution.
Class frequency
6- 10 35
11- 15 23
16- 20 15
21- 25 12
26- 30 9
31- 35 6

Solutions:
 First find the class marks
 Find the product of frequency and class marks
 Find mean using the formula.
Class fi Xi Xifi
6- 10 35 8 280
11- 15 23 13 299
16- 20 15 18 270
21- 25 12 23 276
26- 30 9 28 252
31- 35 6 33 198
Total 100 1575

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6

f X i i
1575
X  i 1
6
  15.75
f
100
i
i 1

If the values in a series or mid values of a class are large enough, coding of values is a
good device to simplify the calculations.
Special properties of Arithmetic mean
1. The sum of the deviations of a set of items from their mean is always zero. i.e.
n

 ( X  X )  0.
i 1
i

2. The sum of the squared deviations of a set of items from their mean is the
n n
minimum. i.e.  ( Xi  X ) 2   ( X i  A) 2 , A  X
i 1 i 1

3. If X 1 is the mean of n1 observations

If X 2 is the mean of n2 observations
.
.
If X k is the mean of n k observations
Then the mean of all the observation in all groups often called the combined
mean is given by:
k

X1n1  X 2 n 2  .... X k n k 
Xini
Xc   i1k
n1  n 2  ...n k
n
i 1
i

Example: In a class there are 30 females and 70 males. If females averaged 60 in an

examination and boys averaged 72, find the mean for the entire class.
Solutions:
Females Males
X 1  60 X 2  72
n1  30 n2  70
2

X 1 n1  X 2 n 2 X n i i
Xc   i 1

n1  n 2
2

n
i 1
i

30(60)  70(72) 6840

 Xc    68.40
30  70 100

4. If a wrong figure has been used when calculating the mean the correct mean can
be obtained without repeating the whole process using:
(CorrectValue  WrongValue)
CorrectMean  WrongMean 
n

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Where n is total number of observations.
Example: An average weight of 10 students was calculated to be 65.Latter it
was discovered that one weight was misread as 40 instead of 80 k.g. Calculate
the correct average weight.
Solutions:
(CorrectValue  WrongValue)
CorrectMean  WrongMean 
n
(80  40 )
CorrectMean  65   65  4  69 k.g.
10

5. The effect of transforming original series on the mean.

a) If a constant k is added/ subtracted to/from every observation then the
new mean will be the old mean± k respectively.
b) If every observations are multiplied by a constant k then the new mean
will be k*old mean
Example:
1. The mean of n Tetracycline Capsules X1, X2, …,Xn are known to be 12 gm.
New set of capsules of another drug are obtained by the linear
transformation Yi = 2Xi – 0.5 ( i = 1, 2, …, n ) then what will be the
mean of the new set of capsules
Solutions:
NewMean  2 * OldMean  0.5  2 * 12  0.5  23.5

2. The mean of a set of numbers is 500.

a) If 10 is added to each of the numbers in the set, then what will be the
mean of the new set?
b) If each of the numbers in the set are multiplied by -5, then what will be
the mean of the new set?
Solutions:
a).NewMean  OldMean  10  500  10  510
b).NewMean  5 * OldMean  5 * 500  2500

Weighted Mean
 When a proper importance is desired to be given to different data a weighted
mean is appropriate.
 Weights are assigned to each item in proportion to its relative importance.
 Let X1, X2, …Xn be the value of items of a series and W1, W2, …Wn their
corresponding weights , then the weighted mean denoted X w is defined as:

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n

X W i i
Xw  i 1
n

W
i 1
i

Example:
A student obtained the following percentage in an examination:
English 60, Biology 75, Mathematics 63, Physics 59, and chemistry 55.Find
the students weighted arithmetic mean if weights 1, 2, 1, 3, 3 respectively are
allotted to the subjects.
Solutions:
5

X W i i
60 * 1  75 * 2  63 * 1  59 * 3  55 * 3 615
Xw  i 1
   61.5
1 2  1 3  3
5
10
W
i 1
i

Merits and Demerits of Arithmetic Mean

Merits:
 It is rigidly defined.
 It is based on all observation.
 It is suitable for further mathematical treatment.
 It is stable average, i.e. it is not affected by fluctuations of sampling to some
extent.
 It is easy to calculate and simple to understand.
Demerits:
 It is affected by extreme observations.
 It cannot be used in the case of open end classes.
 It cannot be determined by the method of inspection.
 It cannot be used when dealing with qualitative characteristics, such as
intelligence, honesty, beauty.
 It can be a number which does not exist in a serious.
 Sometimes it leads to wrong conclusion if the details of the data from which it is
obtained are not available.
 It gives high weight to high extreme values and less weight to low extreme
values.

The Geometric Mean

 The geometric mean of a set of n observation is the nth root of their product.
 The geometric mean of X1, X2 ,X3 …Xn is denoted by G.M and given by:

G.M  n X 1 * X 2 * ... * X n

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 Taking the logarithms of both sides
1
log(G.M)  log(n X 1 * X 2 * ... * X n )  log( X 1 * X 2 * ... * X n ) n
1 1
 log(G.M)  log(X 1 * X 2 * .... * X n )  (log X 1  log X 2  ...  log X n )
n n
1 n
 log(G.M)   log X i
n i1
 The logarithm of the G.M of a set of observation is the arithmetic mean
of their logarithm.
1 n
 G.M  Anti log(  log X i )
n i 1
Example:
Find the G.M of the numbers 2, 4, 8.
Solutions:
G.M  n X 1 * X 2 * ... * X n  3 2 * 4 * 8  3 64  4
Remark: The Geometric Mean is useful and appropriate for finding averages of ratios.

The Harmonic Mean

The harmonic mean of X1, X2, X3 …Xn is denoted by H.M and given by:
n
H.M  n , This is called simple harmonic mean.
1

i 1 X i

In a case of frequency distribution:

k

H.M  k
n , n   fi
fi i 1
i 1 X i

If observations X1, X2… Xn have weights W1, W2 …Wn respectively, then their
harmonic mean is given by
n

W i
, This is called Weighted Harmonic Mean.
H.M  n
i 1

W
i 1
i Xi

Remark: The Harmonic Mean is useful and appropriate in finding average speeds
and average rates.
Example: A cyclist pedals from his house to his college at speed of 10 km/hr and
back from the college to his house at 15 km/hr. Find the average speed.
Solution: Here the distance is constant

The simple H.M is appropriate for this problem.

X1= 10km/hr X2=15km/hr

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 Introduction to Statistics and probability
2
H.M   12 km /hr
1 1

10 15
The Mode
- Mode is a value which occurs most frequently in a set of values
- The mode may not exist and even if it does exist, it may not be unique.
- In case of discrete distribution the value having the maximum frequency is the
model value.
Examples:
1. Find the mode of 5, 3, 5, 8, 9
Mode =5
2. Find the mode of 8, 9, 9, 7, 8, 2, and 5.
It is a bimodal Data: 8 and 9
3. Find the mode of 4, 12, 3, 6, and 7.
No mode for this data.
- The mode of a set of numbers X1, X2, …, Xn is usually denoted by X̂ .
Mode for Grouped data
If data are given in the shape of continuous frequency distribution, the mode is
defined as:
 1 
X̂  L mo  w 
 1   2 

Where:
Xˆ  the mod e of the distributi on
w  the size of the mod al class
1  f mo  f1
 2  f mo  f 2
f mo  frequency of the mod al class
f1  frequency of the class preceeding the mod al class
f 2  frequency of the class following the mod al class
Note: The modal class is a class with the highest frequency.
Example: Following is the distribution of the size of certain farms selected at random
from a district. Calculate the mode of the distribution.
Size of farms No. of farms
5-15 8
15-25 12
25-35 17
35-45 29
45-55 31

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 Introduction to Statistics and probability
55-65 5
65-75 3
Solutions:

45  55 is the mod al class, sin ce it is a class with the highest frequency

45  10
.
ˆ  2 
X 
Lmo  45  2  26 
w  10  45.71

 1  f mo  f1  2
 2  f mo  f 2  26
f mo  31
f1  29
f2  5

Merits and Demerits of Mode

Merits:
 It is not affected by extreme observations.
 Easy to calculate and simple to understand.
 It can be calculated for distribution with open end class
Demerits:
 It is not rigidly defined.
 It is not based on all observations
 It is not suitable for further mathematical treatment.
 It is not stable average, i.e. it is affected by fluctuations of sampling to
some extent.
 Often its value is not unique.
Note: being the point of maximum density, mode is especially useful in finding the
most popular size in studies relating to marketing, trade, business, and industry. It is
the appropriate average to be used to find the ideal size.
The Median
- In a distribution, median is the value of the variable which divides it in to two
equal halves.
- In an ordered series of data median is an observation lying exactly in the middle of the
series. It is the middle most value in the sense that the number of values less than the
median is equal to the number of values greater than it.
-If X1, X2 …Xn be the observations, then the numbers arranged in ascending
order will be X [1], X [2] …X[n], where X[i] is ith smallest value.
 X[1]< X[2]< …<X[n]

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Introduction to Statistics and probability
~
-Median is denoted by X .
Median for ungrouped data

 X ( n1) 2  ,If n is odd.

~ 1
X   (X  X ), If n is even
 2  n 2  ( n 2 )  1



Example: Find the median of the following numbers.

a) 6, 5, 2, 8, 9, 4.
b) 2, 1, 3, 5, 8.
Solutions:
a) First order the data: 2, 4, 5, 6, 8, 9
Here n=6
~ 1
X  (X n  X n )
2 [2] [  1]
2

1
 (X [3]  X [ 4 ] )
2
1
 ( 5  6)  5.5
2
b) Order the data :1, 2, 3, 5, 8
Here n=5
~ X
X n 1
[ ]
2

 X[3]
3
Median for grouped data If data are given in the shape of continuous frequency
distribution, the median is defined as:
~ w n
X  L med  (  c)
f med 2
Where :
L med  lower class boundary of the median class.
w  the size of the median class
n  total number of observations.
c  the cumulative frequency( less than type) preceedingthe median class.
f med  thefrequency of the median class.

Remark:
The median class is the class with the smallest cumulative frequency (less than type)
greater than or equal to n .
2

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 Introduction to Statistics and probability
Example: Find the median of the following distribution.

Class Frequency
40-44 7
45-49 10
50-54 22
55-59 15
60-64 12
65-69 6
70-74 3
Solutions:
 First find the less than cumulative frequency.
 Identify the median class.
 Find median using formula.

Class Frequency Cumu.Freq(less than type)

40-44 7 7
45-49 10 17
50-54 22 39
55-59 15 54
60-64 12 66
65-69 6 72
70-74 3 75
Do statistics to be best statistician!
n 75
  37.5
2 2
39 is the first cumulative frequencyto be greaterthan or equal to 37.5
 50  54 is the median class.

L  49.5, w  5
med
n  75, c  17, f  22
med
~
 X L w ( n  c)
med f 2
med
 49.5  5 (37.5  17)
22
 54.16
Merits and Demerits of Median
Merits:
 Median is a positional average and hence not influenced by extreme observations.
 Can be calculated in the case of open end intervals.

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 Introduction to Statistics and probability
 Median can be located even if the data are incomplete.
Demerits:
 It is not a good representative of data if the number of items is small.
 It is not amenable to further algebraic treatment.
 It is susceptible to sampling fluctuations.

Quantiles

When a distribution is arranged in order of magnitude of items, the median is the value of
the middle term. Their measures that depend up on their positions in distribution
quartiles, deciles, and percentiles are collectively called quantiles.

Quartiles:
- Quartiles are measures that divide the frequency distribution in to four equal
parts.
- The value of the variables corresponding to these divisions are denoted Q 1, Q2,
and Q3 often called the first, the second and the third quartile respectively.
- Q1 is a value which has 25% items which are less than or equal to it. Similarly Q2
has 50%items with value less than or equal to it and Q3 has 75% items whose
values are less than or equal to it.
Calculating quartiles for raw data
 To calculate the three quartiles from the raw data, we must arranged the
data from least to highest 1st if the data are arranged in increasing order
,then
Qi  i 4 (n  1) th value, i  1,2,3, then
Q1  1 (n  1) th vlaue
4
Q2  2 ( n  1) th vlaue
4
Q3  3 (n  1)th vlaue , where n is number of
4
observations.
E.g. the following data shows the age of 30 sampled patients in JUSH

6,9,11,14,16,17,18,21,22,22,22,22,23,25,25,26,27,28,28,32,33,34,34,36,39,39,
41,45,46,49 find the lower middle and upper quartiles for the above data.
Solution:
1st order the data (if it hasn’t been ordered)
6,9,11,14,16,17,18,21,22,22,22,22,23,25,25,26,27,28,28,32,33,34,34,36,39,39,
41,45,46,49

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Introduction to Statistics and probability
n =30, Q1= 1 4 (n  1)th value = 1 4 (30  1)th value = 7.75th value =7th value +0.75(8th
value -7th value)
18+0.75(21-18) = 18+2.25 =20.25
This implies one fourth of the patients (25%) age are below 20.5 years.
Q2  2
4 (n  1) th value 
2
4 (30  1) th value  2(7.75) th value  15.5th value
 15th value  0.5(16 th value  15th value)  25  0.5(26  25)  25.5 This implies

that half (50%) of the patients age is below 25.5 years.

Calculating quartiles for grouped data: To find Qi (i=1, 2, 3) from grouped
in
frequency distribution, we count of the classes beginning from the lowest class.
4
So to calculate the deciles We have the following formula,

w ( in  c) , i  1,2,3
Q
i  LQ i  f 4
Qi
Where :
L  lower class boundary of the quartile class.
Qi
w  the size of the quartile class
n  total number of observations.
c  the cumulative frequency (less than type) preceeding the quartile class.
f  thefrequency of the quartile class.
Qi

Remark:
The quartile class (class containing Qi) is the class with the smallest cumulative frequency
in
(less than type) greater than or equal to .
4
Deciles:
- Deciles are measures that divide the frequency distribution in to ten equal parts.
- The values of the variables corresponding to these divisions are denoted D 1, D2,..
, D9 often called the first, the second,…, the ninth deciles respectively.

Calculating Deciles for raw data

 To calculate the nine deciles from the raw data, we must arranged the data from
least to highest 1st if the data are not arranged in increasing order ,then

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Introduction to Statistics and probability
Di  i
10 (n  1)th value, i  1,2,3,....9then
D1  1 (n  1)th vlaue
10
D2  2 (n  1) th vlaue
10
D3  3 (n  1) th vlaue
10
.
.
D9  9 (n  1) th vlaue , where n is number of observations.
10

Calculating Deciles For grouped data:

in
- To find Di (i=1, 2,..,9) We count of the classes beginning from the lowest
10
class. we have the following formula

w iN
Di  LD i  (  c) , i  1,2,...,9
f Di 10
Where :
LDi  lower class boundary of the decile class .
w  the size of the decileclas s
n  total number of observations.
c  the cumulative frequency (less than type) preceeding the decile class .
f Di  thefrequency of the decile class .

Remark:
The decile class (class containing Di) is the class with the smallest cumulative frequency
in
(less than type) greater than or equal to .
10
Percentiles:
- Percentiles are measures that divide the frequency distribution in to hundred
equal parts.
- The values of the variables corresponding to these divisions are denoted P1, P2,..
P99 often called the first, the second,…, the ninety-ninth percentile respectively.
- To calculate the nine deciles from the raw data, we must arranged the data from
least to highest 1st if the data are not arranged in increasing order ,then

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Introduction to Statistics and probability
pi  i
100 (n  1)th value, i  1,2,3,....9then
p1  1 (n  1)th vlaue
100
p2  2 (n  1) th vlaue
100
p3  3 ( n  1) th vlaue
100
.
.
p99  99 ( n  1) th vlaue , where n is number of
100
observations.
in
Calculating For grouped data: To find Pi (i=1, 2... 99) we count of the
100
classes beginning from the lowest class. We have the following formula
w in
Pi  LPi  (  c) , i  1,2,...,99
f Pi 100
Where :
LPi  lower class boundary of the percentile class .
w  the size of the percentile class
N  total number of observations.
c  the cumulative frequency (less than type) preceeding the percentile class .
f Pi  thefrequency of the percentile class .

Remark: The percentile class (class containing Pi) is the class with the
in
smallest cumulative frequency (less than type) greater than or equal to .
100
Example: Considering the following distribution
Calculate:
a) All quartiles.
b) The 7th decile.
c) The 90th percentile.

Values Frequency
140- 150 17
150- 160 29
160- 170 42
170- 180 72
180- 190 84
190- 200 107

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200- 210 49
210- 220 34
220- 230 31
230- 240 16
240- 250 12
Solutions:
 First find the less than cumulative frequency.
 Use the formula to calculate the required quantile.

Values Frequency Cum.Freq(less

than type)
140- 150 17 17
150- 160 29 46
160- 170 42 88
170- 180 72 160
180- 190 84 244
190- 200 107 351
200- 210 49 400
210- 220 34 434
220- 230 31 465
230- 240 16 481
240- 250 12 493
a. Quartiles:
i. Q1
- determine the class containing the first quartile.
n
 123.25
4
 170  180 is the class containing the first quartile.
w n
 Q1  LQ 1  (  c)
f Q1 4
LQ1  170 , w 10
10
n  493 , c  88 , f Q1  72  170  (123.25  88)
72
 174.90

ii. Q2
- determine the class containing the second quartile.
2*n
 246.5
4
 190  200 is the class containing the sec ond quartile.

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LQ2  190 , w 10

n  493 , c  244 , f Q2 107

w 2*n
 Q2  LQ2  (  c)
f Q2 4
10
 170  (246.5  244)
72
 190.23

iii. Q3
- determine the class containing the third quartile.
3* n
 369.75
4
 200  210 is the class containing the third quartile.

LQ3  200 , w 10

n  493 , c  351 , f Q3  49

w 3* n
 Q3  LQ 3  (  c)
f Q3 4
10
 200  (369.75  351)
49
 203.83

b. D7
- determine the class containing the 7th decile.
7*n
 345.1
10
190  200 is the class containing the seventh decile.
LD7  190 , w 10
n  493 , c  244 , f D7 107

w 7*n
 D7  LD7  (  c)
f D7 10
10
 190  (345.1  244)
107
 199.45

c. P90, determine the class containing the 90th percentile.

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90 * n
 443.7
100
 220  230 is the class containing the 90 th percentile.
LP90  220 , w 10
n  493 , c  434 , f P90  31

w 90 * n
 P90  LP9 0  (  c)
f P9 0 100
10
 220  ( 443.7  434)
31
 223.13

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CHAPTER 4
4. Measures of Dispersion (Variation)

4.1 Introduction and objectives of measuring Variation

-The scatter or spread of items of a distribution is known as dispersion or variation.

In other words the degree to which numerical data tend to spread about an average
value is called dispersion or variation of the data.
-Measures of dispersions are statistical measures which provide ways of measuring
the extent in which data are dispersed or spread out.
Objectives of measuring Variation:

 To judge the reliability of measures of central tendency

 To control variability itself.
 To compare two or more groups of numbers in terms of their variability.
 To make further statistical analysis.
Absolute and Relative Measures of Dispersion

The measures of dispersion which are expressed in terms of the original unit of a
series are termed as absolute measures. Such measures are not suitable for comparing
the variability of two distributions which are expressed in different units of
measurement and different average size. Relative measures of dispersions are a ratio or
percentage of a measure of absolute dispersion to an appropriate measure of central
tendency and are thus pure numbers independent of the units of measurement. For
comparing the variability of two distributions (even if they are measured in the same
unit), we compute the relative measure of dispersion instead of absolute measures of
dispersion.

4.2 Types of Measures of Dispersion

Various measures of dispersions are in use. The most commonly used measures of
dispersions are:
1) Range and relative range
2) Mean deviation
3) Standard deviation ,coefficient of variation and standard scores

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The Range (R)

The range is the largest score minus the smallest score. It is a quick and dirty measure
of variability, although when a test is given back to students they very often wish to
know the range of scores. Because the range is greatly affected by extreme scores, it
may give a distorted picture of the scores. The following two distributions have the
same range, 13, yet appear to differ greatly in the amount of variability.
Distribution 1: 32 35 36 36 37 38 40 42 42 43 43 45
Distribution 2: 32 32 33 33 33 34 34 34 34 34 35 45
For this reason, among others, the range is not the most important measure of
variability.
R  LS , L  l arg est observation
S  smallest observation
Range for grouped data:
If data are given in the shape of continuous frequency distribution, the range is
computed as:

R  UCLk  LCL1 , UCLk is upperclass lim it of the last class.

UCL1 is lower class lim it of the first class.

This is some times expressed as:

R  X k  X1 , X k is class mark of the last class.
X1 is classmark of the first class.

Merits and Demerits of range

Merits:
 It is rigidly defined.
 It is easy to calculate and simple to understand.
Demerits:
 It is not based on all observation.
 It is highly affected by extreme observations.
 It is affected by fluctuation in sampling.
 It is not liable to further algebraic treatment.
 It cannot be computed in the case of open end distribution.
 It is very sensitive to the size of the sample.
Relative Range (RR)
-it is also sometimes called coefficient of range and given by:

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LS R
RR  
LS LS
Example:
1. Find the relative range of the above two distribution.(exercise!)
2. If the range and relative range of a series are 4 and 0.25 respectively. Then what is
the value of:
a) Smallest observation
b) Largest observation

Solutions :( 2)
R  4  L  S  4 _________________(1)
RR  0.25  L  S  16 _____________(2)
Solving (1) and (2) at the same time , one can obtain the following value
L  10 and S  6

The Mean Deviation (M.D):

The mean deviation of a set of items is defined as the arithmetic mean of the values of
the absolute deviations from a given average. Depending up on the type of averages
used we have different mean deviations.
a) Mean Deviation about the mean
 Denoted by M.D( X ) and given by

n
 Xi  X
M .D ( X )  i 1
n
 For the case of frequency distribution it is given as:

k
 fi X i  X
M .D ( X )  i 1
n

Steps to calculate M.D ( X ):

1. Find the arithmetic mean, X
2. Find the deviations of each reading from X .
3. Find the arithmetic mean of the deviations, ignoring sign.
b) Mean Deviation about the median.
~
 Denoted by M.D( X ) and given by

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n ~
~
 Xi  X
M .D ( X )  i 1
n
 For the case of frequency distribution it is given as:

k ~
~
 fi X i  X
M .D ( X )  i 1
n

~
Steps to calculate M.D ( X ):
~
1. Find the median, X
~
2. Find the deviations of each reading from X .
3. Find the arithmetic mean of the deviations, ignoring sign.

c) Mean Deviation about the mode.

 Denoted by M.D( X̂ ) and given by
n

X i
ˆ
X
ˆ)
M.D( X i 1
n

 For the case of frequency distribution it is given as:

k
 f i X i  Xˆ
ˆ) 
M .D ( X i 1
n

Steps to calculate M.D ( X̂ ):

1. Find the mode, X̂
2. Find the deviations of each reading from X̂ .
3. Find the arithmetic mean of the deviations, ignoring sign.

Examples:
1. The following are the number of visit made by ten mothers to the local doctor’s
surgery. 8, 6, 5, 5, 7, 4, 5, 9, 7, 4
Find mean deviation about mean, median and mode.
Solutions:
First calculate the three averages
~
X  6, X  5.5, Xˆ  5

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Then take the deviations of each observation from these averages.

Xi 4 4 5 5 5 6 7 7 8 9 total
X 6
i
2 2 1 1 1 0 1 1 2 3 14

X i  5.5 1.5 1.5 0.5 0.5 0.5 0.5 1.5 1.5 2.5 3.5 14

Xi  5 1 1 0 0 0 1 2 2 3 4 14

10
 X i  6) 14
 M .D ( X )  i 1
  1.4
10 10

10

~
 X i  5.5 14
M .D ( X )  i 1
  1.4
10 10

10
 X i  5) 14
ˆ)
M .D ( X i 1
  1.4
10 10
2. Find mean deviation about mean, median and mode for the following
distributions.(exercise)

Class Frequency
40-44 7
45-49 10
50-54 22
55-59 15
60-64 12
65-69 6
70-74 3

Remark: Mean deviation is always minimum about the median.

The Variance
Population Variance
If we divide the variation by the number of values in the population, we get
something called the population variance. This variance is the "average squared
deviation from the mean".
1
Population Varince   2   ( X i   ) 2 , i  1,2,..... N
N
For the case of frequency distribution it is expressed as:

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1
Population Varince   2   f i ( X i   ) 2 , i  1,2,..... k
N
Sample Variance
One would expect the sample variance to simply be the population variance with
the population mean replaced by the sample mean. However, one of the major uses
of statistics is to estimate the corresponding parameter. This formula has the problem
that the estimated value isn't the same as the parameter. To counteract this, the sum
of the squares of the deviations is divided by one less than the sample size.
1
Sample Varince  S 2   ( X i  X ) 2 , i  1,2,....., n
n 1
For the case of frequency distribution it is expressed as:
1
Sample Varince  S 2   f i ( X i  X ) 2 , i  1,2,..... k
n 1
We usually use the following short cut formula.
n

X  nX
2 2
i
S 2
 i 1
, for raw data.
n 1
k

f X i  nX 2
2
i
S 2
 i 1
, for frequency distributi on.
n 1
Standard Deviation
There is a problem with variances. Recall that the deviations were squared. That
means that the units were also squared. To get the units back the same as the original
data values, the square root must be taken.

Population standard deviation  σ  σ 2

Sample standard deviation  s  S 2

The following steps are used to calculate the sample standard deviation
1. Find the arithmetic mean.
2. Find the difference between each observation and the mean.
3. Square these differences.
4. Sum the squared differences.
5. Since the data is a sample, divide the number (from step 4 above) by the number
of observations minus one, i.e., n-1 (where n is equal to the number of observations
in the data set).
6. Square root the result obtained from step 5

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Examples: Find the variance and standard deviation of the following sample data
1. 5, 17, 12, 10.
2. The data is given in the form of frequency distribution.
Class Frequency
40-44 7
45-49 10
50-54 22
55-59 15
60-64 12
65-69 6
70-74 3

Solutions:
1. X  11

Xi 5 10 12 17 Total
(Xi- X )2 36 1 1 36 74
n
 ( X i  X )2 74
 S2  i 1
  24.67.
n 1 3
S S2  24.67  4.97.

2. X  55
Xi(C.M) 42 47 52 57 62 67 72 Total
fi(Xi- X )2 1183 640 198 60 588 864 867 4400

n
 fi ( X i  X )2 4400
 S2  i 1
  59.46.
n 1 74
S S2  59.46  7.71.

Special properties of Standard deviations

1.  ( X i  X )2   ( X i  A) 2 ,A X
n 1 n 1
2. For normal (symmetric distribution the following holds.
 Approximately 68.27% of the data values fall within one standard deviation of the
mean. i.e. with in ( X  S , X  S )

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 Approximately 95.45% of the data values fall within two standard deviations of
the mean. i.e. with in ( X  2S , X  2S )
 Approximately 99.73% of the data values fall within three standard deviations of
the mean. i.e. with in ( X  3S , X  3S )
3. Chebyshev's Theorem For any data set, no matter what the pattern of variation,
The proportion of the values that fall with in k standard deviations of the mean or
1
( X  kS , X  kS ) will be at least 1  2 , where k is a number greater than 1.
k
i.e. the proportion of items falling beyond k standard deviations of the mean is at
most 1
k2
Example: Suppose a distribution has mean 50 and standard deviation
6.What percent of the numbers are:
a) Between 38 and 62
b) Between 32 and 68
c) Less than 38 or more than 62.
d) Less than 32 or more than 68.

Solutions:
a) 38 and 62 are at equal distance from the mean,50 and this distance is 12
 ks  12
12 12
 k    2
S 6

1 of the numbers lie between 38 and 62 and

(1  ) *100%  75%
k2
1
*100%  25% of the numbers lie less than 32 or more than 62.
k2

b) Similarly done.
c) It is just the complement of a) i.e. at most 12 *100%  25% of the numbers
k
lie less than 32 or more than 62.
d) Similarly done.

Example 2:
The average score of a special test of knowledge of wood refinishing has a mean of
53 and standard deviation of 6. Find the range of values in which at least 75% the
scores will lie. (Exercise)

4. If the standard deviation of X 1 , X 2 , ..... X n is S , then the standard deviation of

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a) X 1  k , X 2  k , ..... X n  k will also be S
b) kX1 , kX 2 , ..... kX n would be k S
c) a  kX1 , a  kX 2 , ..... a  kX n would be k S
Exercise: Verify each of the above relationship, considering k and a as constants.

Examples:
1. The mean and standard deviation of n Tetracycline Capsules X 1 , X 2 , ..... X n
are known to be 12 gm and 3 gm respectively. New set of capsules of another
drug are obtained by the linear transformation Yi = 2Xi – 0.5 ( i = 1, 2, …, n )
then what will be the standard deviation of the new set of capsules
2. The mean and the standard deviation of a set of numbers are respectively 500 and
10.
a. If 10 is added to each of the numbers in the set, then what will be
the variance and standard deviation of the new set?
b. If each of the numbers in the set are multiplied by -5, then what
will be the variance and standard deviation of the new set?

Solutions:
1. Using c) above the new standard deviation = k S  2 * 3  6
2. a. They will remain the same.
b. New standard deviation  k S  5 *10  50
Coefficient of Variation (C.V)
 Is defined as the ratio of standard deviation to the mean usually expressed as
percents.
S
C.V  *100
X
 The distribution having less C.V is said to be less variable or more consistent.
Examples:
1. An analysis of the monthly wages paid (in Birr) to workers in two firms A and B
belonging to the same industry gives the following results

Value Firm A Firm B

Mean wage 52.5 47.5
Median wage 50.5 45.5
Variance 100 121

In which firm A or B is there greater variability in individual wages?

Solutions:
Calculate coefficient of variation for both firms.

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SA 10
C.VA  *100  *100  19.05%
XA 52.5
S 11
C.VB  B *100  *100  23.16%
XB 47.5
Since C.VA < C.VB, in firm B there is greater variability in individual wages.
2. A meteorologist interested in the consistency of temperatures in three cities during a
given week collected the following data. The temperatures for the five days of the week
in the three cities were

City 1 25 24 23 26 17
City2 22 21 24 22 20
City3 32 27 35 24 28

Which city have the most consistent temperature, based on these data?
(Exercise)

Standard Scores (Z-scores)

 If X is a measurement from a distribution with mean X and standard

deviation S, then its value in standard units is

X 
Z  , for population.


X X
Z  , for sample
S
 Z gives the deviations from the mean in units of standard deviation
 Z gives the number of standard deviation a particular observation lie above
or below the mean.
 It is used to compare two observations coming from different groups.
Examples:
1. Two sections were given introduction to statistics examinations. The following
information was given.

Value Section 1 Section 2

Mean 78 90
Stan.deviation 6 5

Student A from section 1 scored 90 and student B from section 2 scored

95.Relatively speaking who performed better?

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Solutions:
Calculate the standard score of both students.
X A  X 1 90  78
ZA   2
S1 6
X B  X 2 95  90
ZB   1
S2 5
 Student A performed better relative to his section because the score of student A
is two standard deviation above the mean score of his section while, the score of
student B is only one standard deviation above the mean score of his section.
2. Two groups of people were trained to perform a certain task and tested to find
out which group is faster to learn the task. For the two groups the following
information was given:

Value Group one Group two

Mean 10.4 min 11.9 min
Stan.dev. 1.2 min 1.3 min

Relatively speaking:
a) Which group is more consistent in its performance
b) Suppose a person A from group one take 9.2 minutes while
person B from Group two take 9.3 minutes, who was faster
in performing the task? Why?
Solutions:
a) Use coefficient of variation.
S1 1.2
C.V1  *100  *100  11.54%
X1 10.4
S 1.3
C.V2  2 *100  *100  10.92%
X2 11.9
Since C.V2 < C.V1, group 2 is more consistent.
b) Calculate the standard score of A and B

X A  X1 9.2  10.4
ZA    1
S1 1.2
XB  X2 9.3  11.9
ZB    2
S2 1.3

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Child B is faster because the time taken by child B is two standard deviation
shorter than the average time taken by group 2 while, the time taken by child A is
only one standard deviation shorter than the average time taken by group 1.

4.3 Moments
- If X is a variable that assume the values X1, X2,…..,Xn then
1. The rth moment is defined as:
X 1  X 2  ...  X n
r r r
Xr 
n
n
 Xi
r

i 1

n
- For the case of frequency distribution this is expressed as:
k
 fi X i
r

Xr  i 1
n
- If r  1,it is the simple arithmetic mean, this is called the first moment.

2. The rth moment about the mean ( the rth central moment)
Denoted by Mr and defined as:
n n
 ( X i  X )r
( n  1) i
( X i  X )r
Mr  i 1
 1
n n n 1
- For the case of frequency distribution this is expressed as:
k
 fi ( X i  X )r
Mr  i 1
n
- If r  2 , it is population variance, this is called the second central moment. If we
assume n 1  n ,it is also the sample variance.

3. The rth moment about any number A is defined as:

'
Denoted by M r and
n n
 ( X i  A) r 
(n  1) i 1
( X i  A) r
Mr  i 1

'

n n n 1
- For the case of frequency distribution this is expressed as:
k
 f i ( X i  A) r
Mr  i 1
'

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Example:
1. Find the first two moments for the following set of numbers 2, 3, 7
2. Find the first three central moments of the numbers in problem 1
3. Find the third moment about the number 3 of the numbers in problem 1.
Solutions:
1. Use the rth moment formula.
n
 Xi
r

Xr  i 1
n
23 7
 X1  4 X
3
2 2  32  7 2
X2   20.67
3

2. Use the rth central moment formula.

n
 ( X i  X )r
Mr  i 1
n
( 2  4)  (3  4)  (7  4)
 M1  0
3
( 2  4) 2  (3  4) 2  (7  4) 2
M2   4.67
3
( 2  4) 3  (3  4) 3  (7  4) 3
M3  6
3

3. Use the rth moment about A.

n
 ( X i  A) r
i 1
Mr 
n
(2  3) 3  (3  3) 3  (7  3) 3
 M3   21
'

4.4 Skewness

- Skewness is the degree of asymmetry or departure from symmetry of a

distribution.
- A skewed frequency distribution is one that is not symmetrical.
- Skewness is concerned with the shape of the curve not size.

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- If the frequency curve (smoothed frequency polygon) of a distribution has a longer
tail to the right of the central maximum than to the left, the distribution is said to
be skewed to the right or said to have positive skewness. If it has a longer tail to the
left of the central maximum than to the right, it is said to be skewed to the left or
said to have negative skewness.
- For moderately skewed distribution, the following relation holds among the three
commonly used measures of central tendency.
Mean  Mode  3 * (Mean  Median)

Measures of Skewness
- Denoted by  3
- There are various measures of skewness.
1. The Pearsonian coefficient of skewness
Mean  Mode X  Xˆ
3  
S tan dard deviation S

2. The Bowley’s coefficient of skewness ( coefficient of skewness

based on quartiles)
(Q3  Q2 )  (Q2  Q1 ) Q  Q1  2Q2
3   3
Q3  Q1 Q3  Q1
3. The moment coefficient of skewness

M3 M3 M
3    33 , Where  is the population s tan dard deviation.
M2
3 2
( )
2 3 2

The shape of the curve is determined by the value of  3
 If  3  0 then the distribution is positively skewed .
 If  3  0 then the distribution is symmetric .
 If  3  0 then the distribution is negatively skewed .
Remark:
o In a positively skewed distribution, smaller observations are more
frequent than larger observations. i.e. the majority of the
observations have a value below an average.
o In a negatively skewed distribution, smaller observations are less
frequent than larger observations. i.e. the majority of the
observations have a value above an average
Examples:

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1. Suppose the mean, the mode, and the standard deviation of a certain
distribution are 32, 30.5 and 10 respectively. What is the shape of the curve
representing the distribution?
Solutions:
Use the Pearsonian coefficient of skewness
Mean  Mode 32  30.5
3    0.15
S tan dard deviation 10
 3  0  The distribution is positively skewed .
2. In a frequency distribution, the coefficient of skewness based on the quartiles
is given to be 0.5. If the sum of the upper and lower quartile is 28 and the
median is 11, find the values of the upper and lower quartiles.
Solutions:
Given:   0.5, ~
X  Q2  11 Required: Q1 , Q3
3

Q1  Q3  28.......... .......... .......(*)

(Q3  Q2 )  (Q2  Q1 ) Q  Q1  2Q2

3   3  0.5
Q3  Q1 Q3  Q1
Substituting the given values , one can obtain the following
Q3  Q1  12.......... .......... .......... .....(**)
Solving (*) and (**) at the same time we obtain the following values
Q1  8 and Q3  20

3. Some characteristics of annually family income distribution (in Birr) in two

regions is as follows:
Region Mean Median Standard Deviation
A 6250 5100 960
B 6980 5500 940
a) Calculate coefficient of skewness for each region
b) For which region is, the income distribution more skewed. Give your
interpretation for this Region
c) For which region is the income more consistent?

4.5 Kurtosis

Kurtosis is the degree of peakdness of a distribution, usually taken relative to a

normal distribution. A distribution having relatively high peak is called leptokurtic.
If a curve representing a distribution is flat topped, it is called platykurtic. The
normal distribution which is not very high peaked or flat topped is called
mesokurtic.

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Measures of kurtosis
The moment coefficient of kurtosis:
 Denoted by  4 and given by
M4 M
4   44
M2
2

Where : M 4 is the fourth moment about the mean.
M 2 is the sec ond moment about the mean.
 is the population s tan dard deviation.
The peakdness depends on the value of  4 .
If  4  3 then the curve is leptokurtic.
If  4  3 then the curve is mesokurtic.
If  4  3 then the curve is platykurtic.
Examples:
1. If the first four central moments of a distribution are:

M 1  0, M 2  16, M 3  60, M 4  162

a) Compute a measure of skewness
b) Compute a measure of kurtosis and your interpretation.

Solutions:
M3  60
a) 3  3 2
  0.94  0
M2 163 2
 The distribution is negatively skewed .

M4 162
b) 4  2
  0.6  3
M2 162
 The curve is platykurtic.

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CHAPTER 5
5. ELEMENTARY PROBABILITY
5.1 Introduction
 Probability theory is the foundation upon which the logic of inference is built.
 It helps us to cope up with uncertainty.
 In general, probability is the chance of an outcome of an experiment. It is the
measure of how likely an outcome is to occur.
5.2 Definitions of some probability terms
1. Experiment: Any process of observation or measurement or any process which
generates well defined outcome.
2. Probability Experiment: It is an experiment that can be repeated any number of
times under similar conditions and it is possible to enumerate the total number of outcomes
without predicting an individual out come. It is also called random experiment.
Example: If a fair die is rolled once it is possible to list all the possible outcomes
i.e.1, 2, 3, 4, 5, 6 but it is not possible to predict which outcome will
occur.
3. Outcome :The result of a single trial of a random experiment
4. Sample Space: Set of all possible outcomes of a probability experiment
5. Event: It is a subset of sample space. It is a statement about one or more outcomes of a
random experiment .They are denoted by capital letters.
Example: Considering the above experiment let A be the event of odd numbers,
B be the event of even numbers, and C be the event of number 8.
 A  1,3,5
B  2,4,6
C   or empty space or impossible event
Remark:
If S (sample space) has n members then there are exactly 2n subsets or
events.
6. Equally Likely Events: Events which have the same chance of occurring.
7. Complement of an Event: the complement of an event A means non- occurrence of
' c
A and is denoted by A , or A , or A contains those points of the sample space which
don’t belong to A.
8. Elementary Event: an event having only a single element or sample point.
9. Mutually Exclusive Events: Two events which cannot happen at the same time.
10. Independent Events: Two events are independent if the occurrence of one does
not affect the probability of the other occurring.

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11. Dependent Events: Two events are dependent if the first event affects the
outcome or occurrence of the second event in a way the probability is changed.
Example: .What is the sample space for the following experiment

a) Toss a die one time.

b) Toss a coin two times.
c) A light bulb is manufactured. It is tested for its life length by time.
Solution
a) S={1,2,3,4,5,6}
b) S={(HH),(HT),(TH),(TT)}
c) S={t /t≥0}
 Sample space can be

 Countable ( finite or infinite)

 Uncountable.
5.3 Counting Rules
In order to calculate probabilities, we have to know
 The number of elements of an event
 The number of elements of the sample space.
That is in order to judge what is probable, we have to know what is possible.
 In order to determine the number of outcomes, one can use several rules of
counting.
- The addition rule
- The multiplication rule
- Permutation rule
- Combination rule

 To list the outcomes of the sequence of events, a useful device called tree
diagram is used.
The addition rule
Suppose that the 1st procedure designed by 1 can be performed in n1 ways. Assume that
2nd procedure designed by 2 can be performed in n2 ways. (n1 * n2 * ........ * nk ) ways.
suppose further more that, it is not possible that both procedures 1 and 2 are performed
together then the number of ways in which we can perform 1or 2 procedure is n1+n2
ways, and also if we have another procedure that is designed by k with possible way of n k
we can conclude that there is n1+n2+…+nk possible ways.

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Example: suppose we planning a trip and are deciding by bus and train transportation. If
there are 3 bus routes and 2 train routes to go from A to B. find the available routes for
the trip.
Solution:
There are 3+2 =5 routes for someone to go from A to B.

The Multiplication Rule:

If a choice consists of k steps of which the first can be made in n1 ways, the second can be
made in n2 ways…, the kth can be made in nk ways, then the whole choice can be made in
(n1 * n2 * ........ * nk ) ways.
Example 1
An air line has 6 flights from A to B, and 7 flights from B to C per day. If the flights
are to be made on separate days, in how many different ways can the airline offer
from A to C?
Solution: In operation 1 there are 6 flights from A to B, 7 flights are available to
make flight from B to C. Altogether there are 6*7 = 42 possible flights from A to C.
Example2
suppose that in a medical study patients are classified according to their blood type
as A, B , AB, and O; according to their RH factors as + or - and according to their
blood pressure as high, normal or low ,then in how many different ways can a
patient be classified ?
Solution
The 1st classification done in 4 ways, the 2nd in 2 ways, and the 3rd in 3 ways. Thus
patient can be classified in 4*2*3 = 24 different ways.

Example 3
The digits 0, 1, 2, 3, and 4 are to be used in 4 digit identification card. How many
different cards are possible if
a) Repetitions are permitted.
b) Repetitions are not permitted.

Solutions
a)
1st digit 2nd digit 3rd digit 4th digit
5 5 5 5
There are four steps
1. Selecting the 1st digit, this can be made in 5 ways.

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2. Selecting the 2nd digit, this can be made in 5 ways.
3. Selecting the 3rd digit, this can be made in 5 ways.
4. Selecting the 4th digit, this can be made in 5 ways.

 5 * 5 * 5 * 5  625 different cards are possible.

b)

1st digit 2nd digit 3rd digit 4th digit

5 4 3 2

There are four steps

5. Selecting the 1st digit, this can be made in 5 ways.
6. Selecting the 2nd digit, this can be made in 4 ways.
7. Selecting the 3rd digit, this can be made in 3 ways.
8. Selecting the 4th digit, this can be made in 2 ways.

 5 * 4 * 3 * 2  120 different cards are possible.

Permutation

An arrangement of n objects in a specified order is called permutation of the

objects.
Permutation Rules:
1. The number of permutations of n distinct objects taken all together is n!
Where n! n * (n  1) * (n  2) * .....* 3 * 2 *1
n! n!
P =  =n!. In definition 0! = 1! = 1
n n
n  n! 0!
2. The arrangement of n objects in a specified order using r objects at a time is
called the permutation of n objects taken r objects at a time. It is written as
n Pr and the formula is

n!
n Pr 
( n  r )!

3. The number of permutations of n objects in which k1 are unlike k2 are unlike -

--- etc is

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Pr  n!
n
k1!*k 2 * ... * k n
Example:
1. Suppose we have a letters A,B, C, D
a) How many permutations are there taking all the four?
b) How many permutations are there two letters at a time?
2. How many different permutations can be made from the letters in the word
“CORRECTION”?
Solutions:
1.
a)
Here n  4, there are four disnict object
 There are 4! 24 permutations.

b)
Here n  4, r2
4! 24
 There are 4 P2    12 permutations.
(4  2)! 2
2.

Here n  10
Of which 2 are C , 2 are O, 2 are R ,1E ,1T ,1I ,1N
 K1  2, k 2  2, k3  2, k 4  k5  k6  k7  1
U sin g the 3rd rule of permutation , there are
10!
 453600 permutations.
2!*2!*2!*1!*1!*1!*1!

Exercises:
1. Six different statistics books, seven different physics books, and 3 different
Economics books are arranged on a shelf. How many different arrangements
are possible if;
i. The books in each particular subject must all stand together
ii. Only the statistics books must stand together

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2. If the permutation of the word WHITE is selected at random, how many of
the permutations
i. Begins with a consonant?
ii. Ends with a vowel?
iii. Has a consonant and vowels alternating?

Combination

A selection of objects without regard to order is called combination.

Example: Given the letters A, B, C, and D list the permutation and combination for
selecting two letters.

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Solutions:
Permutation Combination

AB BA CA DA AB BC
AC BC CB DB AC BD
AD BD CD DC AD DC

Note that in permutation AB is different from BA. But in combination AB is the same as
BA.

Combination Rule

The number of combinations of r objects selected from n objects is denoted by

 n  and is given by the formula:
n Cr or  
r

n n!
  
 r  ( n  r )!*r!
Examples:
1. In how many ways a committee of 5 people be chosen out of 9 people?
Solutions:

n9 , r 5
n n! 9!
     126 ways
 r  ( n  r )!*r! 4!*5!
2. Among 15 clocks there are two defectives .In how many ways can an inspector
chose three of the clocks for inspection so that:
a) There is no restriction.
b) None of the defective clock is included.
c) Only one of the defective clocks is included.
d) Two of the defective clock is included.

Solutions:

n  15 of which 2 are defective and 13 are non  defective.

r 3

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a) If there is no restriction select three clocks from 15 clocks and this can be
done in :
n  15 , r  3
n n! 15!
     455 ways
 r  ( n  r )!*r! 12!*3!

b) None of the defective clocks is included.

This is equivalent to zero defective and three non defective, which can be
done in:

 2  13 

0 *
    286 ways.
  3
c) Only one of the defective clocks is included.
This is equivalent to one defective and two non defective, which can be
done in:

 2  13 
  *    156 ways.
1  2 
d) Two of the defective clock is included.
This is equivalent to two defective and one non defective, which can be
done in:

 2  13 
  *    13 ways.
 2  3 

Exercises:
1. Out of 5 Mathematician and 7 Statistician a committee consisting of 2
Mathematician and 3 Statistician is to be formed. In how many ways this
can be done if

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a) There is no restriction
b) One particular Statistician should be included
c) Two particular Mathematicians can not be included on the
committee.
2. If 3 books are picked at random from a shelf containing 5 novels, 3 books
of poems, and a dictionary, in how many ways this can be don if
a) There is no restriction.
b) The dictionary is selected?
c) 2 novels and 1 book of poems are selected?

5.4 Approaches to measuring Probability

There are four different conceptual approaches to the study of probability theory.
These are:

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 The classical approach.
 The relative frequency approach.
 The axiomatic approach.
 The subjective approach.
The classical approach
This approach is used when:
- All outcomes are equally likely.
- Total number of outcome is finite, say N.
Definition: If a random experiment with N equally likely outcomes is conducted
and out of these NA outcomes are favorable to the event A, then the probability that
event A occur denoted P(A) is defined as:
NA No. of outcomes favourable to A n( A)
P( A)   
N Total number of outcomes n( S )
Examples:
1. A fair die is tossed once. What is the probability of getting
a) Number 4?
b) An odd number?
c) An even number?
d) Number 8?
Solutions:
First identify the sample space, say S
S  1, 2, 3, 4, 5, 6
 N  n( S )  6
a) Let A be the event of number 4
A  4
 N A  n( A)  1
n( A)
P ( A)  1 6
n( S )

b) Let A be the event of odd numbers

A  1,3,5
 N A  n( A)  3
n( A)
P( A)   3 6  0.5
n( S )

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c) Let A be the event of even numbers

A  2,4,6
 N A  n( A)  3
n( A)
P( A)   3 6  0.5
n( S )
d) Let A be the event of number 8
A Ø

 N A  n( A)  0
n( A)
P( A)  0 60
n( S )
2. A box of 80 candles consists of 30 defective and 50 non defective candles. If
10 of this candles are selected at random, what is the probability
a) All will be defective.
b) 6 will be non defective
c) All will be non defective

Solutions:
 80 
Total selection     N  n( S )
 10 

a) Let A be the event that all will be defective.

 30   50 
Total way in which A occur    *    N A  n( A)
 10   0 
 30   50 
 * 
n( A)  10   0 
 P( A)    0.00001825
n( S )  80 
 
 10 

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b) Let A be the event that 6 will be non defective.
 30   50 
Total way in which A occur    *    N A  n( A)
4 6
 30   50 
 * 
n( A)  4   6 
 P ( A)    0.265
n( S )  80 
 
 10 
c) Let A be the event that all will be non defective.

 30   50 
Total way in which A occur    *    N A  n( A)
 0   10 
 30   50 
 * 
n( A)  0   10 
 P ( A)    0.00624
n( S )  80 
 
 10 

Exercises:
1. What is the probability that a waitress will refuse to serve alcoholic beverages
to only three minors if she randomly checks the I.D’s of five students from
among ten students of which four are not of legal age?
2. If 3 books are picked at random from a shelf containing 5 novels, 3 books of
poems, and a dictionary, what is the probability that
a) The dictionary is selected?
b) 2 novels and 1 book of poems are selected?

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Short coming of the classical approach:

This approach is not applicable when:
- The total number of outcomes is infinite.
- Outcomes are not equally likely.
The Frequentist Approach
This is based on the relative frequencies of outcomes belonging to an event.
Definition: The probability of an event A is the proportion of outcomes favorable to A
in the long run when the experiment is repeated under same condition.

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NA
P ( A)  lim
N  N
Example: If records show that 60 out of 100,000 bulbs produced are defective. What is
the probability of a newly produced bulb to be defective?
Solution:
Let A be the event that the newly produced bulb is defective.
NA 60
P( A)  lim   0.0006
N  N 100,000
Axiomatic Approach:
Let E be a random experiment and S be a sample space associated with E. With each
event A a real number called the probability of A satisfies the following properties called
axioms of probability or postulates of probability.
1. P( A)  0
2. P(S )  1, S is the sure event.
3. If A and B are mutually exclusive events, the probability that one or the other
occur equals the sum of the two probabilities. i. e.
P( A  B)  P( A)  P( B)
4. P( A' )  1  P( A)
5. 0  P( A)  1
6. P (ø) =0, ø is the impossible event.
Remark: Venn-diagrams can be used to solve probability problems.

AUB AnB A

In general p( A  B)  p( A)  p( B)  p( A  B)

Conditional probability and Independency

Conditional Events: If the occurrence of one event has an effect on the next
occurrence of the other event then the two events are conditional or dependant
events.

Example: Suppose we have two red and three white balls in a bag

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1. Draw a ball with replacement
2
Let A= the event that the first draw is red p( A) 
5
2
B= the event that the second draw is red  p( B ) 
5
A and B are independent.
2. Draw a ball without replacement
2
Let A= the event that the first draw is red p( A) 
5
B= the event that the second draw is red  p( B)  ?
This is conditional.
Let B= the event that the second draw is red given that the first draw is red 
p( B)  1 4
Conditional probability of an event

The conditional probability of an event A given that B has already occurred, denoted
p( A B) is
p( A  B)
p ( A B) = , p( B)  0
p( B)
Remark: (1) p( A' B)  1  p( A B)
(2) p( B ' A)  1  p( B A)
Examples
1. For a student enrolling at freshman at certain university the probability is 0.25
that he/she will get scholarship and 0.75 that he/she will graduate. If the
probability is 0.2 that he/she will get scholarship and will also graduate. What is
the probability that a student who get a scholarship graduate?

Solution: Let A= the event that a student will get a scholarship

B= the event that a student will graduate

given p ( A)  0.25, p ( B)  0.75, p  A  B   0.20

Re quired pB A
p  A  B  0.20
p B A    0.80
p  A 0.25
2. If the probability that a research project will be well planned is 0.60 and the
probability that it will be well planned and well executed is 0.54, what is the
probability that it will be well executed given that it is well planned?

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Solution; Let A= the event that a research project will be well
Planned
B= the event that a research project will be well
Executed
given p ( A)  0.60, p  A  B   0.54
Re quired pB A
p  A  B  0.54
p B A    0.90
p  A 0.60

Note; for any two events A and B the following relation holds.
pB   pB A. p A  pB A' . pA' 

Probability of Independent Events

Two events A and B are independent if and only if p A  B  p A. pB

Here p A B  p A, PB A  pB
Example; A box contains four black and six white balls. What is the probability of
getting two black balls in drawing one after the other under the following conditions?
a. The first ball drawn is not replaced
b. The first ball drawn is replaced

Solution; Let A= first drawn ball is black

B= second drawn is black
Required p A  B
a. p A  B  pB A. p A  4 103 9  2 15
b. p A  B  p A. pB  4 104 10  4 25

3. A lot consists of 20 defective and 80 non-defective items from which two

items are chosen without replacement. Events A & B are defined as A = the first
item chosen is defective, B = the second item chosen is defective
a. What is the probability that both items are defective?

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b. What is the probability that the second item is defective?
Solution; Exercise

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CHAPTER 6
6. PROBABILITY DISTRIBUTIONS
Random variables
One of the fundamental concepts of probability theory is that of a random variable.
Definition
A random variable is a variable that assumes numerical values associated with events of an
experiment. Usually denoted by capital letters.

Example 6.1 Observe 100 babies to be born in a clinic. The number of boys, which
have been born, is a random variable. It may take values from 0 to 100.
Example 6.2 Number of patients of a clinic daily is a random variable.
Example 6.3 Select one student from a university and measure his/her height and
record this height by x. Then x is a random variable, assuming values from, say from
100 cm to 250 cm in dependence upon each specific student.
Example 6.4 the weight of babies at birth also is a random variable. It can assume
values in the interval, for example, from 800 grams to 6000 grams.
Classification of random variables: Random variables may be divided into two types:
discrete random variables and continuous random variables.
Definition
1. A discrete random variable is one that can assume only a countable number of values
continuous random variable can assume any value in one or more intervals on a
line. Among the random variables described above the number of boys in
Example 6.1 and the number of patients in Example 6.2 are discrete random
variables, the height of students and the weight of babies are continuous random
variables. Discrete random variable: are variables which can assume only a
specific number of values. They have values that can be counted
Examples:
 Toss coin n times and count the number of heads.
 Number of children in a family.

 Number of car accidents per week.

 Number of defective items in a given company.
 Number of bacteria per two cubic centimeter of water.
2. Continuous random variable: are variables that can assume all values between any
two given values.
Examples:
 Height of students at certain college.
 Mark of a student.

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 Life time of light bulbs.
 Length of time required to complete a given training.
Definition: a probability distribution consists of a value a random variable can assume
and the corresponding probabilities of the values.
Example 6.5 Suppose you randomly select a student attending your university.
Classify each of the following random variables as discrete or continuous:
a) Number of credit hours taken by the student this semester
b) Current grade point average of the student.
Solution
a) The number of credit hours taken by the student this semester is a discrete random
variable because it can assume only a countable number of values (for example 10,
11, 12, and so on). It is not continuous since the number of credit hours cannot
assume values as 11.5678, 15.3456 and 12.9876 hours.
b) The grade point average for the student is a continuous random variable because it
could theoretically assume any value (for example, 5.455, 8.986) corresponding to
the points on the interval from 0 to 10 of a line.

Example: If X is a random variable, then it is a function from the elements of the sample
space to the set of real numbers. i.e.

X is a function X: S R
A random variable takes a possible outcome and assigns a number to it.
Example: Flip a coin three times, let X be the number of heads in three tosses.
 S  HHH , HHT , HTH , HTT , THH , THT , TTH , TTT 
 X HHH   3, X HHT   X HTH   X THH   2,
X HTT   X THT   X TTH   1
X TTT   0
X = {0, 1, 2, 3, 4, 5}
X assumes a specific number of values with some probabilities.
Example: Consider the experiment of tossing a coin three times. Let X is the number of
heads. Construct the probability distribution of X.
Solution:
 First identify the possible value that X can assume.
 Calculate the probability of each possible distinct value of X and express X in
the form of frequency distribution.
X x 0 1 2 3
P X  x  18 38 38 18

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Probability distribution is denoted by P for discrete and by f for continuous random
variable.
Properties of Probability Distribution:
1.
P( x)  0, if X is discrete.
f ( x)  0, if X is continuous.

 P X  x 
x
 1 , if X is discrete.
2.
 f ( x)dx
x
 1 , if is continuous.

Note:
1. If X is a continuous random variable then
b
P(a  X  b)   f ( x)dx
a
2. Probability of a fixed value of a continuous random variable is zero.
 P(a  X  b)  P(a  X  b)  P(a  X  b)  P(a  X  b)
3. If X is discrete random variable the
b 1
P ( a  X  b)   P ( x )
x  a 1
b 1
P ( a  X  b)   p ( x )
xa
b
P ( a  X  b)   P ( x )
x  a 1
b
P ( a  X  b)   P ( x )
xa
4. Probability means area for continuous random variable.
Introduction to expectation
Definition:
1. Let a discrete random variable X assume the values X1, X2, ….,Xn with the
probabilities P(X1), P(X2), ….,P(Xn) respectively. Then the expected value of X
,denoted as E(X) is defined as:

E ( X )  X 1 P( X 1 )  X 2 P ( X 2 )  ....  X n P ( X n )
n
  X i P( X i )
i 1

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2. Let X be a continuous random variable assuming the values in the interval (a, b)
b
such that  f ( x)dx  1 ,then
a
b
E ( X )   x f ( x)dx
a

Examples:
1. What is the expected value of a random variable X obtained by tossing a coin
three times where is the number of heads
Solution:
First construct the probability distribution of X
X x 0 1 2 3
P X  x  18 38 38 18

 E ( X )  X 1 P( X 1 )  X 2 P( X 2 )  ....  X n P( X n )
 0 *1 8  1* 3 8  .....  2 *1 8
2. Suppose a charity organization is
 1.5
mailing printed return-address stickers
to over one million homes in the Ethiopia. Each recipient is asked to
donate$1, $2, $5, $10, $15, or $20. Based on past experience, the amount a
person donates is believed to follow the following probability distribution:

X x $1 $2 $5 $10 $15 $20

P X  x  0.1 0.2 0.3 0.2 0.15 0.05

What is expected that an average donor to contribute?

Solution:
X x $1 $2 $5 $10 $15 $20 Total
P X  x  0.1 0.2 0.3 0.2 0.15 0.05 1
xP( X  x) 0.1 0.4 1.5 2 2.25 1 7.25
6
 E ( X )   xi P( X  xi )  $7.25
i 1

Mean and Variance of a random variable

Let X is given random variable.
1. The expected value of X is its mean  Mean of X  E ( X )
2. The variance of X is given by:
Variance of X  var( X )  E ( X 2 )  [ E ( X )]2
Where:

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n
E ( X 2 )   xi P( X  xi ) , if X is discrete
2

i 1

  x 2 f ( x)dx , if X is continuous.
x

Examples:
1. Find the mean and the variance of a random variable X in example 2 above.
Solutions:
X x $1 $2 $5 $10 $15 $20 Total
P X  x  0.1 0.2 0.3 0.2 0.15 0.05 1
xP( X  x) 0.1 0.4 1.5 2 2.25 1 7.25
x 2 P( X  x ) 0.1 0.8 7.5 20 33.75 20 82.15
 E ( X )  7.25
Var ( X )  E ( X 2 )  [ E ( X )] 2  82.15  7.25 2  29.59
2. Two dice are rolled. Let X
be a random variable denoting the sum of the numbers on the two dice.
i) Give the probability distribution of X
ii) Compute the expected value of X and its variance
There are some general rules for mathematical expectation.
Let X and Y are random variables and k is a constant.
RULE 1 E (k )  k ,
RULE 2 Var (k )  0 ,
RULE 3 E (kX )  kE( X )
RULE 4 Var(kX )  k 2Var( X )
RULE 5 E ( X  Y )  E ( X )  E (Y )
COMMON PROBABILITY DISTRIBUTIONS
COMMON DISCRETE PROBABILITY DISTRIBUTIONS

1. Binomial Distribution

A binomial experiment is a probability experiment that satisfies the following

four requirements called assumptions of a binomial distribution.
1. The experiment consists of n identical trials.
2. Each trial has only one of the two possible mutually exclusive outcomes, success
or a failure.
3. The probability of each outcome does not change from trial to trial, and
4. The trials are independent, thus we must sample with replacement.

Examples of binomial experiments

 Tossing a coin 20 times to see how many tails occur.
 Asking 200 people if they watch BBC news.

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Registering a newly produced product as defective or non defective.
 Asking 100 people if they favor the ruling party.
 Rolling a die to see if a 5 appears.
Definition: The outcomes of the binomial experiment and the corresponding
probabilities of these outcomes are called Binomial Distribution.
Let P  the probabilit y of success
q  1  p  the probabilit y of failure on any given trial

Then the probability of getting x successes in n trials becomes:

n
P( X  x)    p x q n  x , x  0,1,2,...., n
 x
And this is sometimes written as:
X ~ Bin (n, p )
When using the binomial formula to solve problems, we have to identify three things:
 The number of trials ( n )
 The probability of a success on any one trial ( p ) and
 The number of successes desired ( X ).
Examples:
1. What is the probability of getting three heads by tossing a fair con four times?
Solution:
Let X be the number of heads in tossing a fair coin four times
X ~ Bin (n  4, p  0.50)
n
 P( X  x)    p x q n x , x  0,1,2,3,4.
 x
 4
 P( X  3)   0.5 4  0.25
 3
2. Suppose that an examination consists of six true and false questions, and
assume that a student has no knowledge of the subject matter. The probability
that the student will guess the correct answer to the first question is 30%.
Likewise, the probability of guessing each of the remaining questions correctly
is also 30%.

a) What is the probability of getting more than three correct answers?

b) What is the probability of getting at least two correct answers?
c) What is the probability of getting at most three correct answers?
d) What is the probability of getting less than five correct answers?

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Solution
Let X = the number of
n correct answers that the
 P( X  x)    p x q n  x , x  0,1,2,..6 student gets.
 x
X ~ Bin (n  6, p  0.30)
6 a) P( X  3)  ?
  0.3 x 0.7 6 x
 x
 P( X  3)  P( X  4)  P( X  5)  P( X  6)
 0.060  0.010  0.001
 0.071
Thus, we may conclude that if 30% of the exam questions are answered by
guessing, the probability is 0.071 (or 7.1%) that more than three of the questions
are answered correctly by the student.

b) P( X  2)  ?
P ( X  2)  P ( X  2)  P ( X  3)  P ( X  4)  P ( X  5)  P ( X  6)
 0.324  0.185  0.060  0.010  0.001
 0.58
c) P( X  3)  ?
P( X  3)  P( X  0)  P( X  1)  P( X  2)  P( X  3)
 0.118  0.303  0.324  0.185
 0.93
d) P( X  5)  ?
P( X  5)  1  P( X  5)
 1  {P( X  5)  P( X  6)}
 1  (0.010  0.001)
 0.989
Remark: If X is a binomial random variable with parameters n and p then
E ( X )  np , Var ( X )  npq

2. Poisson Distribution
- A random variable X is said to have a Poisson distribution if its probability
distribution is given by:
x e  
P( X  x)  , x  0,1,2,......
x!
Where   the average number.

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- The Poisson distribution depends only on the average number of
occurrences per unit time of space.
- The Poisson distribution is used as a distribution of rare events, such as:
 Number of misprints.
 Natural disasters like earth quake.
 Accidents.
 Hereditary.
 Arrivals
- The process that gives rise to such events are called Poisson process.
Examples:
1. If 1.6 accidents can be expected an intersection on any given day, what is
the probability that there will be 3 accidents on any given day?
Solution; Let X =the number of accidents,   1.6
1.6 x e 1.6
X  poisson 1.6  p X  x  
x!
1.63 e 1.6
p X  3   0.1380
3!
If X is a Poisson random variable with parameters  then
E( X )   , Var ( X )  

Note:
The Poisson probability distribution provides a close approximation to the binomial
probability distribution when n is large and p is quite small or quite large with   np .
(np) x e  ( np)
P( X  x)  , x  0,1,2,......
x!
Where   np  the average number.
Usually we use this approximation if np  5 . In other words, if n  20 and np  5 [or
n(1  p )  5 ], then we may use Poisson distribution as an approximation to binomial
distribution.
Example:
1. Find the binomial probability P(X=3) by using the Poisson distribution if
p  0.01 and n  200
Solution:

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u sin g Poisson ,   np  0.01* 200  2
2 3 e 2
 P( X  3)   0.1804
3!
U sin g Binomial , n  200, p  0.01
 200 
 P( X  3)   (0.01) 3 (0.99) 99  0.1814
 3 

Exercises:
1. Suppose that 4% of all TVs made by A&B Company in 2000 are defective.
If eight of these TVs are randomly selected from across the country and
tested, what is the probability that exactly three of them are defective?
Assume that each TV is made independently of the others.
2. An allergist claims that 45% of the patients she tests are allergic to some
type of weed. What is the probability that
a) Exactly 3 of her next 4 patients are allergic to weeds?
b) None of her next 4 patients are allergic to weeds?
3. Explain why the following experiments are not Binomial
 Rolling a die until a 6 appears.
 Drawing 5 cards from a deck for a poker hand.
 On the average, five smokers pass a certain street corners every 10 minutes,
what is the probability that during a given 10 minutes the number of smokers
passing will be
o 6 or fewer
o 7 or more
o Exactly 8

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COMMON CONTINUOUS PROBABILITY DISTRIBUTIONS

1. Normal Distribution
A random variable X is said to have a normal distribution if its probability density function
is given by
1  x  2
1   
f ( x)  e 2  
,    x  ,      ,   0
 2
Where   E ( X ),  2  Variance ( X )
 and  2 are the Parameters of the Normal Distributi on.

Properties of Normal Distribution:

1. It is bell shaped and is symmetrical about its mean and it is mesokurtic. The maximum
ordinate is at x   and is given by
1
f ( x) 
 2
2. It is asymptotic to the axis, i.e., it extends indefinitely in either direction from the
mean.
3. It is a continuous distribution.
4. It is a family of curves, i.e., every unique pair of mean and standard deviation defines a
different normal distribution. Thus, the normal distribution is completely described by
two parameters: mean and standard deviation.

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5. Total area under the curve sums to 1, i.e., the area of the distribution on each side of

the mean is 0.5.   f ( x)dx  1

6. It is unimodal, i.e., values mound up only in the center of the curve.
7. Mean  Median  mod e  
8. The probability that a random variable will have a value between any two points is
equal to the area under the curve between those points.
Note: To facilitate the use of normal distribution, the following distribution known as the
standard normal distribution was derived by using the transformation
X 
Z


1
1  z2
 f ( z)  e 2

2

Properties of the Standard Normal Distribution:

Same as a normal distribution, but also...
 Mean is zero
 Variance is one
 Standard Deviation is one
- Areas under the standard normal distribution curve have been tabulated in various
ways. The most common ones are the areas between
Z  0 and a positive value of Z .
- Given a normal distributed random variable X with
Mean  and s tan dard deviation 
a X  b
P ( a  X  b)  P (   )
  
a b
 P ( a  X  b)  P ( Z )
 
Note P ( a  X  b)  P ( a  X  b)
 P ( a  X  b)
 P ( a  X  b)
Examples:
1. Find the area under the standard normal distribution which lies
a) Between Z  0 and Z  0.96
Solution:

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Area  P(0  Z  0.96)  0.3315

b) Between Z  1.45 and Z  0

Solution:
Area  P(1.45  Z  0)
 P(0  Z  1.45)
 0.4265
c) To the right of Z  0.35
Solution:
Area  P( Z  0.35)
 P(0.35  Z  0)  P( Z  0)
 P(0  Z  0.35)  P( Z  0)
 0.1368  0.50  0.6368
d) To the left of Z  0.35
Solution:
Area  P ( Z  0.35)
 1  P ( Z  0.35)
 1  0.6368  0.3632
e) Between Z  0.67 and Z  0.75
Solution:
Area  P(0.67  Z  0.75)
 P(0.67  Z  0)  P(0  Z  0.75)
 P(0  Z  0.67)  P(0  Z  0.75)
 0.2486  0.2734  0.5220

f) Between Z  0.25 and Z  1.25

Solution:
Area  P(0.25  Z  1.25)
 P(0  Z  1.25)  P(0  Z  0.25)
 0.3934  0.0987  0.2957

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2. Find the value of Z if
a) The normal curve area between 0 and z(positive) is 0.4726
Solution
P (0  Z  z )  0.4726 and from table
P (0  Z  1.92)  0.4726
 z  1.92.....uniqueness of Area.
b) The area to the left of z is 0.9868
Solution

P ( Z  z )  0.9868
 P ( Z  0)  P (0  Z  z )
 0.50  P (0  Z  z )
 P (0  Z  z )  0.9868  0.50  0.4868
and from table
P (0  Z  2.2)  0.4868
 z  2.2

3. A random variable X has a normal distribution with mean 80 and standard

deviation 4.8. What is the probability that it will take a value
a) Less than 87.2
b) Greater than 76.4
c) Between 81.2 and 86.0

Solution
X is normal with mean,   80, s tan dard deviation,   4.8
a)
X  87.2  
P ( X  87.2)  P (  )
 
87.2  80
 P( Z  )
4.8
 P ( Z  1.5)
 P ( Z  0)  P (0  Z  1.5)
 0.50  0.4332  0.9332
b)

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X  76.4  
P ( X  76.4)  P (  )
 
76.4  80
 P( Z  )
4.8
 P ( Z  0.75)
 P ( Z  0)  P (0  Z  0.75)
 0.50  0.2734  0.7734
c)
81.2   X  86.0  
P (81.2  X  86.0)  P (   )
  
81.2  80 86.0  80
 P( Z )
4.8 4.8
 P (0.25  Z  1.25)
 P (0  Z  1.25)  P (0  Z  1.25)
 0.3934  0.0987  0.2957
4. A normal distribution has mean 62.4.Find its standard deviation if 20.05% of the
area under the normal curve lies to the right of 72.9

Solution
X  72.9  
P ( X  72.9)  0.2005  P (  )  0.2005
 
72.9  62.4
 P( Z  )  0.2005

10.5
 P( Z  )  0.2005

10.5
 P (0  Z  )  0.50  0.2005  0.2995

And from table P (0  Z  0.84)  0.2995
10.5
  0.84

   12.5
5. A random variable has a normal distribution with   5 .Find its mean if the
probability that the random variable will assume a value less than 52.5 is 0.6915.
Solution

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52.5  
P( Z  z )  P( Z  )  0.6915
5
 P (0  Z  z )  0.6915  0.50  0.1915.
But from the table
 P (0  Z  0.5)  0.1915
52.5  
z  0.5
5
   50
6. Of a large group of men, 5% are less than 60 inches in height and 40% are
between 60 & 65 inches. Assuming a normal distribution, find the mean and
standard deviation of heights. Solution (Exercise)

2. Chi-square distribution

• Not applicable to cases where the observations assume negative values

• Its curve is not symmetrical

• As in the case for t-distribution, n-1 is the parameter of the distribution
• Is used in statistical tests of hypothesis concerning variances, independence
of two characteristics and goodness-of-fit.
3. The Student’s t-Distribution
• Similar to the normal distribution except that:
 The population variance is not known so that is estimated from
samples
 Sample size, n, is less than 30
 Table values are read using n-1 degrees of freedom

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CHAPTER 7
7. Sampling and Sampling Distribution

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Introduction
Given a variable X, if we arrange its values in ascending order and assign
probability to each of the values or if we present Xi in a form of relative frequency
distribution the result is called Sampling Distribution of X.
Definitions:
1. Parameter: Characteristic or measure obtained from a population.
2. Statistic: Characteristic or measure obtained from a sample.
3. Sampling: The process or method of sample selection from the population.
4. Sampling unit: the ultimate unit to be sampled or elements of the population to
be sampled.
Examples:
- If somebody studies Scio-economic status of the households, households
are the sampling unit.
- If one studies performance of freshman students in some college, the
student is the sampling unit.
5. Sampling frame: is the list of all elements in a population.
Examples:
- List of households.
- List of students in the registrar office.
6. Errors in sample survey:
There are two types of errors
a) Sampling error:
- It is the discrepancy between the population value and sample value.
- May arise due to inappropriate sampling techniques applied
b) Non sampling errors: are errors due to procedure bias such as:
- Due to incorrect responses
- Measurement
- Errors at different stages in processing the data.
The Need for Sampling
- Reduced cost
- Greater speed
- Greater accuracy
- Greater scope
- More detailed information can be obtained.

There are two types of sampling.

1. Random Sampling or probability sampling.

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It is a method of sampling in which all elements in the population have a pre-
assigned non-zero probability to be included in to the sample.
Examples:
 Simple random sampling
 Stratified random sampling
 Cluster sampling
 Systematic sampling
1. Simple Random Sampling:
- It is a method of selecting items from a population such that every possible
sample of specific size has an equal chance of being selected. In this case,
sampling may be with or without replacement. Or
- All elements in the population have the same pre-assigned non-zero
probability to be included in to the sample.
- Simple random sampling can be done either using the lottery method or
table of random numbers.
2. Stratified Random Sampling:
- The population will be divided in to non-overlapping but exhaustive groups
called strata.
- Simple random samples will be chosen from each stratum.
- Elements in the same strata should be more or less homogeneous while
different in different strata.
- It is applied if the population is heterogeneous.
- Some of the criteria for dividing a population into strata are: Sex (male,
female); Age (under 18, 18 to 28, and 29 to 39); Occupation (blue-collar,
professional, and others).
3. Cluster Sampling:
- The population is divided in to non-overlapping groups called clusters.
- A simple random sample of groups or cluster of elements is chosen and all
the sampling units in the selected clusters will be surveyed.
- Clusters are formed in a way that elements with in a cluster are
heterogeneous, i.e. observations in each cluster should be more or less
dissimilar.

- Cluster sampling is useful when it is difficult or costly to generate a simple

random sample. For example, to estimate the average annual household
income in a large city we use cluster sampling, because to use simple

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random sampling we need a complete list of households in the city from
which to sample. To use stratified random sampling, we would again need
the list of households. A less expensive way is to let each block within the
city represent a cluster. A sample of clusters could then be randomly
selected, and every household within these clusters could be interviewed to
find the average annual household income.
4. Systematic Sampling:
- A complete list of all elements with in the population (sampling frame) is
required.
- The procedure starts in determining the first element to be included in the
sample.
- Then the technique is to take the kth item from the sampling frame.
N
Let N  population size , n  sample size , k 
 sampling int erval.
n
- Chose any number between 1 and k . Suppose it is j (1  j  k ) .
th
- The j unit is selected at first and then ( j  k ) th , ( j  2k ) th ,....etc until the
required sample size is reached.
2. Non Random Sampling or non-probability sampling.
- It is a sampling technique in which the choice of individuals for a sample depends
on the basis of convenience, personal choice or interest.
Examples:
 Judgment sampling.
 Convenience sampling
 Quota Sampling.
1. Judgment Sampling
- In this case, the person taking the sample has direct or indirect control over
which items are selected for the sample.
2. Convenience Sampling
- In this method, the decision maker selects a sample from the population in a
manner that is relatively easy and convenient.
3. Quota Sampling
- In this method, the decision maker requires the sample to contain a certain
number of items with a given characteristic. Many political polls are, in
part, quota sampling.

Note:
let N  population size , n  sample size.
1. Suppose simple random sampling is used Nn

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 We have N n possible samples if sampling is with replacement.
N
 We have   possible samples if sampling is without
n
replacement.
2. After this on wards we consider that samples are drawn from a given
population using simple random sampling.

Sampling Distribution of the sample mean

- Sampling distribution of the sample mean is a theoretical probability distribution

that shows the functional relationship between the possible values of a given sample
mean based on samples of size n and the probability associated with each value, for
all possible samples of size n drawn from that particular population.
- There are commonly three properties of interest of a given sampling distribution.
 Its Mean
 Its Variance
 Its Functional form.

Steps for the construction of Sampling Distribution of the mean

1. From a finite population of size N , randomly draw all possible samples of size
n.
2. Calculate the mean for each sample.
3. Summarize the mean obtained in step 2 in terms of frequency distribution or
relative frequency distribution.
Example:
Suppose we have a population of size N  5 , consisting of the age of five children:
6, 8, 10, 12, and 14
 Population mean    10
population Variance   2  8
Take samples of size 2 with replacement and construct sampling distribution of the
sample mean.

Solution:
N  5, n2
 We have N n  52  25 possible samples since sampling is with replacement.
Step 1: Draw all possible samples:

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6 8 10 12 14
6 (6, 6) (6, 8) (6, 10) (6, 12) (6, 14)
8 (8,6) (8,8) (8,10) (8,12) (8,14)
10 (10,6) (10,8) (10,10) (10,12) (10,14)
12 (12,6) (12,8) (12,10) (12,12) (12,14)
14 (12,6) (14,8) (12,10) (12,12) (12,14)
Step 2: Calculate the mean for each sample:

6 8 10 12 14
6 6 7 8 9 10
8 7 8 9 10 11
10 8 9 10 11 12
12 9 10 11 12 13
14 10 11 12 13 14

Step 3: Summarize the mean obtained in step 2 in terms of frequency

distribution.

X Frequency
6 1
7 2
8 3
9 4
10 5
11 4
12 3
13 2
14 1

a) Find the mean of X , say  X

X   i i 
X f 250
 10  
 fi 25
b) Find the variance of X , say  X
2

 ( X i   X ) 2 f i 100
X 2
  4 2
 fi 25
Remark:
1. In general if sampling is with replacement

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2
X2 
n
2. If sampling is without replacement
2  N n
X 2
 
n  N 1 
3. In any case the sample mean is unbiased estimator of the population mean. i.e.
 X    E ( X )   (Show!)

- Sampling may be from a normally distributed population or from a non -normally

distributed population.
- When sampling is from a normally distributed population, the distribution of X
will possess the following property.

1. The distribution of X will be normal

2. The mean of X is equal to the population mean , i.e.  X  
3. The variance of X is equal to the population variance divided by the sample
2
size, i.e.  X 2

n

2
 X ~ N ( , )
n
X 
Z  ~ N (0,1)
 n
Central Limit Theorem
Given a population of any functional form with mean  and finite variance  2 , the
sampling distribution of X , computed from samples of size n from the population will be
2
approximately normally distributed with mean  and variance , when the sample size
n
is large.

Standard error
 if all samples of size n are taken from the same population, the mean of the
sample means, denoted by X , equals the population mean  and the
standard deviation of the sample means, denoted by X , equals  n

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 The standard deviation of the sample means is called the stand error of the
mean.

Sample Size Determination

 “What is the size of the sample which one should study?” is the question which
comes to the mind of every researcher.
 Here is the formula for the sample size which is obtained by solving the
maximum error of the estimate formula for the population mean for n.
n= ( Z 2  ) 2 /E2
Where
Z  2 = desired level of confidence
 = population standard deviation
E= maximum error to be tolerated
Comment Since  is often unknown, a small-scale pilot study may be required to
estimate  using S.

Example:-How large a sample should be taken to estimate the mean waiting time of
patients at a clinic with an error of ± 1.5 minutes and 95% confidence? s = 8.37
minutes.
Solution: n= ( Z  2 S SSS ) 2 /E2 =(Z0.025*8.37)2/(1.5)2 =120
Therefore, we can take 120 number of elements included in the sample.

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CHAPTER 8
8. ESTIMATION AND HYPOTHESIS TESTING

 Inference is the process of making interpretations or conclusions from sample

data for the totality of the population.
 It is only the sample data that is ready for inference.
 In statistics there are two ways though which inference can be made.
 Statistical estimation
 Statistical hypothesis testing.

Inference Analyzed
Population
Data

Numerical
Sample
data

Data analysis is the process of extracting relevant information from the summarized
data.

Statistical Estimation
This is one way of making inference about the population parameter where the
investigator does not have any prior notion about values or characteristics of the
population parameter.
There are two ways estimation.
1) Point Estimation
It is a procedure that results in a single value as an estimate for a parameter.
2) Interval estimation
It is the procedure that results in the interval of values as an estimate for a
parameter, which is interval that contains the likely values of a parameter.

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It deals with identifying the upper and lower limits of a parameter. The limits by
themselves are random variable.
Definitions
Confidence Interval: An interval estimate with a specific level of confidence
Confidence Level: The percent of the time the true value will lie in the interval
estimate given.
Consistent Estimator: An estimator which gets closer to the value of the
parameter as the sample size increases.
Degrees of Freedom: The number of data values which are allowed to vary
once a statistic has been determined.
Estimator: A sample statistic which is used to estimate a population parameter.
It must be unbiased, consistent, and relatively efficient.
Estimate: Is the different possible values which an estimator can assumes.
Interval Estimate: A range of values used to estimate a parameter.
Point Estimate: A single value used to estimate a parameter.
Relatively Efficient Estimator: The estimator for a parameter with the
smallest variance.
Unbiased Estimator: An estimator whose expected value is the value of the
parameter being estimated.

Point and Interval estimation of the population mean: µ

 Point Estimation
Another term for statistic is point estimate, since we are estimating the parameter
value. A point estimator is the mathematical way we compute the point estimate.
For instance, sum of xi over n is the point estimator used to compute the estimate of
 xi
the population means,  .That is X  is a point estimator of the population
n
mean.

 Confidence interval estimation of the population mean

Although X possesses nearly all the qualities of a good estimator, because of sampling
error, we know that it's not likely that our sample statistic will be equal to the
population parameter, but instead will fall into an interval of values. We will have to
be satisfied knowing that the statistic is "close to" the parameter. That leads to the
obvious question, what is "close"?

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We can phrase the latter question differently: How confident can we be that the
value of the statistic falls within a certain "distance" of the parameter? Or, what is the
probability that the parameter's value is within a certain range of the statistic's value?
This range is the confidence interval.
The confidence level is the probability that the value of the parameter falls within
the range specified by the confidence interval surrounding the statistic.
There are different cases to be considered to construct confidence intervals.
Case 1: If sample size is large or if the population is normal with known
variance
Recall the Central Limit Theorem, which applies to the sampling distribution of the
mean of a sample. Consider samples of size n drawn from a population, whose mean
is  and standard deviation is  with replacement and order important. The
population can have any frequency distribution. The sampling distribution of X will

have a mean  x   and a standard deviation  x  , and approaches a normal
n
distribution as n gets large. This allows us to use the normal distribution curve for
computing confidence..intervals.
X 
Z  has a normal distribution with mean  0 and var iance  1
 n
   X  Z n
 X , where  is a measure of error .
  Z n
- For the interval estimator to be good the error should be small. How it be small?
 By making n large
 Small variability
 Taking Z small

- To obtain the value of Z, we have to attach this to a theory of chance. That is, there is an
area of size1   such

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P( Z  2  Z  Z  2 )  1  
Where   is the probabilit y that the parameter lies outside the int erval
Z  2  s tan ds for the s tan dard normal var iable to the right of which
 2 probabilit y lies , i.e P( Z  Z  2 )   2
X 
 P( Z 2   Z 2 )  1  
 n
 P( X  Z 2  n    X  Z 2  n)  1 
 ( X  Z 2  n, X  Z 2  n ) is a 1001    % conifidence int erval for 

Case 2: If the sample size is large and the variance is unknown

But usually  2 is not known, in that case we estimate by its point estimator S2
 ( X  Z  2 S n , X  Z  2 S n ) is a 1001   % conifidence int erval for 

Here 100(1   ) %
are the z values corresponding
  2 Z 2
to the most commonly used
90 0.10 0.05 1.645 confidence levels.
95 0.05 0.025 1.96
99 0.01 0.005 2.58

Case 3: If sample size is small and the population variance,  2 is not known.
X 
t has t distributi on with n  1 deg rees of freedom.
S n
 ( X  t 2 S n, X  t 2 S n ) is a 1001   % conifidence int erval for 
The unit of

measurement of the confidence interval is the standard error. This is just the standard
deviation of the sampling distribution of the statistic.

Examples:
1. From a normal sample of size 25 a mean of 32 was found .Given that the
population standard deviation is 4.2. Find
a) A 95% confidence interval for the population mean.
b) A 99% confidence interval for the population mean.
Solution:

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a)
X  32,   4.2, 1    0.95    0.05,  2  0.025
 Z 2  1.96 from table.
 The required int erval will be X  Z 2  n
 32  1.96 * 4.2 25
 32  1.65
 (30.35, 33.65)

b)
X  32,   4.2, 1    0.99    0.01,  2  0.005
 Z 2  2.58 from table.
 The required int erval will be X  Z 2  n
 32  2.58 * 4.2 25
 32  2.17
 ( 29.83, 34.17)

2. A drug company is testing a new drug which is supposed to reduce blood

pressure. From the six people who are used as subjects, it is found that the
average drop in blood pressure is 2.28 points, with a standard deviation of .95
points. What is the 95% confidence interval for the mean change in pressure?

Solution:
X  2.28, S  0.95, 1    0.95    0.05,  2  0.025
 t 2  2.571 with df  5 fromtable.
 The required int erval will be X  t 2 S n
 2.28  2.571 * 0.95 6
 2.28  1.008
 (1.28, 3.28)
That is, we can be 95% confident that the mean decrease in blood pressure is between 1.28
and 3.28 points.
Hypothesis Testing
- This is also one way of making inference about population parameter, where the
investigator has prior notion about the value of the parameter.

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Definitions:
- Statistical hypothesis: is an assertion or statement about the population whose
plausibility is to be evaluated on the basis of the sample data.
- Test statistic: is a statistics whose value serves to determine whether to reject
or accept the hypothesis to be tested. It is a random variable.
- Statistic test: is a test or procedure used to evaluate a statistical hypothesis and
its value depends on sample data.
There are two types of hypothesis:
Null hypothesis:
- It is the hypothesis to be tested.
- It is the hypothesis of equality or the hypothesis of no difference.
- Usually denoted by H0.
Alternative hypothesis:
- It is the hypothesis available when the null hypothesis has to be rejected.
- It is the hypothesis of difference.
- Usually denoted by H1 or Ha.

Types and size of errors:

- Testing hypothesis is based on sample data which may involve sampling and non
sampling errors.
- The following table gives a summary of possible results of any hypothesis test:

Decision
Reject H0 Don't reject H0
H0 Type I Error Right Decision
Truth
H1 Right Decision Type II Error

- Type I error: Rejecting the null hypothesis when it is true.

- Type II error: Failing to reject the null hypothesis when it is false.
NOTE:
1. There are errors that are prevalent in any two choice decision making problems.
2. There is always a possibility of committing one or the other errors.
3. Type I error (  ) and type II error (  ) have inverse relationship and therefore,
can not be minimized at the same time.

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 In practice we set  at some value and design a test that minimize  . This is because a
type I error is often considered to be more serious, and therefore more important to
avoid, than a type II error.

General steps in hypothesis testing:

1. The first step in hypothesis testing is to specify the null hypothesis (H0) and the
alternative hypothesis (H1).
2. The next step is to select a significance level, 
3. Identify the sampling distribution of the estimator.
4. The fourth step is to calculate a statistic analogous to the parameter specified by
the null hypothesis.
5. Identify the critical region.
6. Making decision.
7. Summarization of the result.
Hypothesis testing about the population mean,  :Suppose the assumed or
hypothesized value of  is denoted by  0 , then one can formulate two sided (1) and
one sided (2 and 3) hypothesis as follows:
1. H 0 :    0 vs H1 :    0
2. H 0 :    0 vs H1 :    0
3. H 0 :    0 vs H1 :    0

CASES:
Case 1: When sampling is from a normal distribution with  2 known
- The relevant test statistic is
X 
Z
 n
- After specifying  we have the following regions (critical and acceptance) on the
standard normal distribution corresponding to the above three hypothesis.
Summary table for decision rule.

H0 Reject H0 if Accept H0 if Inconclusive if

  0 Zcal  Z 2 Zcal  Z 2 Z cal  Z 2 or Z cal   Z 2
  0 Z cal   Z Z cal   Z Z cal   Z
  0 Z cal  Z Z cal  Z Z cal  Z

X  0
Where: Z cal 
 n

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Case 2: When sampling is from a normal distribution with  2 unknown and small
sample size
- The relevant test statistic is
X 
t ~ t with n  1 deg rees of freedom.
S n
- After specifying  we have the following regions on the student t-distribution
corresponding to the above three hypothesis.
H0 Reject H0 if Accept H0 if Inconclusive if
  0 tcal  t 2 tcal  t 2 tcal  t 2 or tcal  t 2
  0 tcal  t tcal  t tcal  t
  0 tcal  t tcal  t tcal  t

X  0
Where: tcal 
S n

Case3: When sampling is from a non- normally distributed population or

a population whose functional form is unknown.
- If a sample size is large one can perform a test hypothesis about the mean by using:

X  0
Z cal  , if  2 is known.
 n
X  0
 , if  2 is unknown.
S n

- The decision rule is the same as case I.

Examples:
1. Test the hypotheses that the average height content of containers of certain lubricant is
10 liters if the contents of a random sample of 10 containers are 10.2, 9.7, 10.1, 10.3,
10.1, 9.8, 9.9, 10.4, 10.3, and 9.8 liters. Use the 0.01 level of significance and assume
that the distribution of contents is normal.

Solution:
Let   Population mean. ,  0  10
Step 1: Identify the appropriate hypothesis
H 0 :   10 vs H1 :   10
Step 2: select the level of significance,   0.01( given)

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Step 3: Select an appropriate test statistics
t- Statistic is appropriate because population variance is not known and
the sample size is also small.
Step 4: identify the critical region.
Here we have two critical regions since we have two tailed hypothesis
The critical region is t cal  t 0.005 (9)  3.2498
 (3.2498, 3.2498) is accep tan ce region.
Step 5: Computations:
X  10.06, S  0.25
X   0 10.06  10
 t cal    0.76
S n 0.25 10

Step 6: Decision
Accept H0 , since tcal is in the acceptance region.

Step 7: Conclusion
At 1% level of significance, we have no evidence to say that the average height content of
containers of the given lubricant is different from 10 litters, based on the given sample data.
2. The mean life time of a sample of 16 fluorescent light bulbs produced by a company is
computed to be 1570 hours. The population standard deviation is 120 hours. Suppose the
hypothesized value for the population mean is 1600 hours. Can we conclude that the life
time of light bulbs is decreasing?
(Use   0.05 and assume the normality of the population)

Solution:
Let   Population mean. ,  0  1600
Step 1: Identify the appropriate hypothesis
H 0 :   1600 vs H1 :   1600
Step 2: select the level of significance,   0.05 ( given)
Step 3: Select an appropriate test statistics
Z- Statistic is appropriate because population variance is known.

Step 4: identify the critical region.

The critical region is Z cal   Z 0.05  1.645
 ( 1.645, ) is accep tan ce region.
Step 5: Computations:

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X   0 1570  1600
Z cal    1.0
 n 120 16
Step 6: Decision
Accept H0 , since Zcal is in the acceptance region.
Step 7: Conclusion
At 5% level of significance, we have no evidence to say that that the life time of light
bulbs is decreasing, based on the given sample data.

3. It is known in a pharmacological experiment that rats fed with a particular diet over a
certain period gain an average of 40 gms in weight. A new diet was tried on a sample of
20 rats yielding a weight gain of 43 gms with variance 7 gms2 . Test the hypothesis that
the new diet is an improvement assuming normality.
a) State the appropriate hypothesis
b) What is the appropriate test statistic? Why?
c) Identify the critical region(s)
d) On the basis of the given information test the hypothesis and make
conclusion.
Solution (exercise).

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Test of Association

- Suppose we have a population consisting of observations having two attributes or

qualitative characteristics say A and B.
- If the attributes are independent then the probability of possessing both A and B is
PA*PB
Where PA is the probability that a number has attribute A.
PB is the probability that a number has attribute B.

- Suppose A has r mutually exclusive and exhaustive classes.

B has c mutually exclusive and exhaustive classes

- The entire set of data can be represented using r * c contingency table.

B
A B1 B2 . . Bj . Bc Total
A1 O11 O12 O1j O1c R1
A2 O21 O22 O2j O2c R2
.
.
Ai Oi1 Oi2 Oij Oic Ri
.
.
Ar Or1 Or2 Orj Orc

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Total C1 C2 Cj n
- The chi-square procedure test is used to test the hypothesis of independency of two
attributes .For instance we may be interested
 Whether the presence or absence of hypertension is independent
of smoking habit or not.
 Whether the size of the family is independent of the level of
education attained by the mothers.
 Whether there is association between father and son regarding
boldness.
 Whether there is association between stability of marriage and
period of acquaintance ship prior to marriage.

- The  2 statistic is given by:

 (Oij  eij ) 2  ~  2
r c
 cal    
2
 ( r 1)( c 1)
i 1 j 1 
 eij 
Where Oij  the number of units that belong to category i of A and j of B.
eij  Expected frequency that belong to category i of A and j of B.

- The eij is given by :

Ri * C j
eij 
n
Where Ri  the i th row total.
C j  the j th column total.
n  total number of oservations

Remark:
r c r c
n    Oij    eij
i 1 j 1 i 1 j 1
- The null and alternative hypothesis may be stated as:
H 0 : There is no association between A and B.
H1 : not H 0 ( There is association between A and B ).
Decision Rule:

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- Reject H0 for independency at  level of significance if the calculated value of 

2

exceeds the tabulated value with degree of freedom equal to (r  1)(c  1) .

 Reject H 0 if  2 cal     (Oij  eij )    2( r 1)( c 1) at 
2
r c

i 1 j 1  eij 


Examples:
1. A geneticist took a random sample of 300 men to study whether there is association
between father and son regarding boldness. He obtained the following results.

Son
Father Bold Not
Bold 85 59
Not 65 91

Using   5% test whether there is association between father and son regarding
boldness.
Solution:
H 0 : There is no association between Father and Son regarding boldness.
H1 : not H 0

- First calculate the row and column totals

R1  144, R2  156, C1  150, C2  150
- Then calculate the expected frequencies( eij’s)
Ri * C j
eij 
n
 e11  R1 * C1  144 *150  72
n 300
R * C2 144 *150
e12  1   72
n 300

R2 * C1 156 *150
e21    78
n 300

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R2 * C2 156 *150
e22    78
n 300
- Obtain the calculated value of the chi-square.
2 2  (O  e ) 
2
 cal    
2 ij ij

i 1 j 1
 eij 
(85  72) 2 (59  72) 2 (65  78) 2 (91  78) 2
     9.028
72 72 78 78

- Obtain the tabulated value of chi-square

  0.05
Degrees of freedom  (r  1)(c  1)  1 *1  1
 02.05 (1)  3.841 from table.
- The decision is to reject H0 since  cal   0.05 (1)
2 2

Conclusion: At 5% level of significance we have evidence to say there is

association between father and son regarding boldness, based on this sample data.
2. Random samples of 200 men, all retired were classified according to education and
number of children is as shown below
Education Number of children
level 0-1 2-3 Over 3
Elementary 14 37 32
Secondary and 31 59 27
above
Test the hypothesis that the size of the family is independent of the level of education
attained by fathers. (Use 5% level of significance)

Solution:

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H 0 : There is no association between the size of the family and the level of
education attained by fathers.
H 1 : not H 0 .

- First calculate the row and column totals

R1  83, R2  117, C1  45, C2  96, C3  59

- Then calculate the expected frequencies( eij’s)

Ri * C j
eij 
n
 e11  18.675, e12  39.84, e13  24.485
e21  26.325, e22  56.16, e23  34.515

- Obtain the calculated value of the chi-square.

2 3  (Oij  eij ) 2 
 2
cal    
i 1 j 1
 eij 
(14  18.675) 2 (37  39.84) 2 (27  34.515) 2
   ...   6.3
18.675 39.84 34.515

- Obtain the tabulated value of chi-square

  0.05
Degrees of freedom  ( r  1)(c  1)  1 * 2  2
 02.05 ( 2)  5.99 from table.
- The decision is to reject H0 since  2 cal   02.05 (2)
Conclusion: At 5% level of significance we have evidence to say there is
association between the size of the family and the level of education attained by
fathers, based on this sample data.

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CHAPTER 9

9. SIMPLE LINEAR REGRESSION AND CORRELATION

Linear regression and correlation is studying and measuring the linear relationship
among two or more variables. When only two variables are involved, the analysis is
referred to as simple correlation and simple linear regression analysis, and when
there are more than two variables the term multiple regression and partial
correlation is used.

Regression Analysis: is a statistical technique that can be used to develop a

mathematical equation showing how variables are related.

Correlation Analysis: deals with the measurement of the closeness of the relation
ship which are described in the regression equation.
We say there is correlation when the two series of items vary together directly or
inversely.
Simple Correlation

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Suppose we have two variables X  ( X 1 , X 2 ,... X n ) and
Y  (Y1 , Y2 ,...Yn )
 When higher values of X are associated with higher values of Y and lower
values of X are associated with lower values of Y, then the correlation is said
to be positive or direct.

Examples:
- Income and expenditure
- Number of hours spent in studying and the score obtained
- Height and weight
- Distance covered and fuel consumed by car.

 When higher values of X are associated with lower values of Y and lower
values of X are associated with higher values of Y, then the correlation is said
to be negative or inverse.

Examples:
- Demand and supply
- Income and the proportion of income spent on food.
The correlation between X and Y may be one of the following
1. Perfect positive (slope=1)
2. Positive (slope between 0 and 1)
3. No correlation (slope=0)
4. Negative (slope between -1 and 0)
5. Perfect negative (slope=-1)
The presence of correlation between two variables may be due to three reasons:

1. One variable being the cause of the other. The cause is called “subject”
or “independent” variable, while the effect is called “dependent” variable.
2. Both variables being the result of a common cause. That is, the
correlation that exists between two variables is due to their being related
to some third force.

Example:
Let X1= be ESLCE result
Y1=be rate of surviving in the University
Y2=be the rate of getting a scholar ship.

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Both X1&Y1 and X1&Y2 have high positive correlation, likewise
Y1 & Y2 have positive correlation but they are not directly related, but they
are related to each other via X1.

3. Chance:

The correlation that arises by chance is called spurious correlation.

Examples:
 Price of teff in Addis Ababa and grade of students in USA.
 Weight of individuals in Ethiopia and income of individuals in Kenya.

Therefore, while interpreting correlation coefficient, it is necessary to see if there is any

likelihood of any relationship existing between variables under study.
The correlation coefficient between X and Y denoted by r is given by

r
 ( X  X )(Y  Y )
i i
and the short cut formula is
 ( X  X )
i  (Y  Y ) 2
i
2

n XY  ( X )(  Y )
r
[ n X  ( X ) ] [ n  Y  ( Y ) ]
2 2 2 2

r
 XY  nXY
[ X  nX ] [ Y  nY ]
2 2 2 2

Remark:

Always this r lies between -1 and 1 inclusively and it is also symmetric.

Interpretation of r

1. Perfect positive linear relationship ( if r  1)

2. Some Positive linear relationship ( if r is between 0 and 1)
3. No linear relationship ( if r  0)
4. Some Negative linear relationship ( if r is between -1 and 0)
5. Perfect negative linear relationship ( if r  1)

Examples:

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1. Calculate the simple correlation between mid semester and final exam scores of
10 students (both out of 50)

Student Mid Sem.Exam Final Sem.Exam

(X) (Y)
1 31 31
2 23 29
3 41 34
4 32 35
5 29 25
6 33 35
7 28 33
8 31 42
9 31 31
10 33 34

Solution:
n  10, X  31.2, Y  32.9, X 2  973.4, Y 2  1082.4
 XY  10331,  X 2  9920,  Y 2  11003

r
 XY  nXY
[  X  n X 2 ] [  Y 2  nY 2 ]
2

10331  10(31.2)(32.9)

(9920  10(973.4)) (11003  10(1082.4))
66.2
  0.363
182.5
This means mid semester exam and final exam scores have a slightly positive
correlation.

2. The following data were collected from a certain household on the monthly
income (X) and consumption (Y) for the past 10 months. Compute the simple
correlation coefficient.( Exercise)

X: 650 654 720 456 536 853 735 650 536 666
Y: 450 523 235 398 500 632 500 635 450 360

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The above formula and procedure is only applicable on quantitative data, but when
we have qualitative data like efficiency, honesty, intelligence, etc
We calculate what is called Spearman’s rank correlation coefficient as follows:
Steps
i. Rank the different items in X and Y.
ii. Find the difference of the ranks in a pair , denote them by Di
iii. Use the following formula
6 Di
2
r  1
n( n 2  1)
s

Where rs  coefficien t of rank correlatio n

D  the difference between paired ranks
n  the number of pairs

Example:
Aster and Almaz were asked to rank 7 different types of lipsticks, see if there is
correlation between the tests of the ladies.

Lipsticks A B C D E F G
Aster 2 1 4 3 5 7 6
Almaz 1 3 2 4 5 6 7
Solution:
X (R1) Y (R2) R1-R2 (D) D2
2 1 1 1
1 3 -2 4
4 2 2 4
3 4 -1 1
5 5 0 0
7 6 1 1
6 7 -1 1
Total 12
6 Di
2
6(12)
 rs  1   1  0.786
n( n  1)
2
7( 48)

Yes, there is positive correlation.

Simple Linear Regression

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- Simple linear regression refers to the linear relation ship between two variables
- We usually denote the dependent variable by Y and the independent variable by
X.
- A simple regression line is the line fitted to the points plotted in the scatter
diagram, which would describe the average relationship between the two
variables. Therefore, to see the type of relationship, it is advisable to prepare
scatter plot before fitting the model.

- The linear model is:

Y    X  
Where :Y  Dependent var iable
X  independent var iable
  Re gression cons tan t
  regression slope
  random disturbance term
Y ~ N (   X ,  2 )
 ~ N (0,  2 )

- To estimate the parameters (  and  ) we have several methods:

 The free hand method
 The semi-average method
 The least square method
 The maximum likelihood method
 The method of moments
 Bayesian estimation technique.

- The above model is estimated by:

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Yˆ  a  bX

Where a is a constant which gives the value of Y when X=0 .It is called the Y-
intercept. b is a constant indicating the slope of the regression line, and it gives a
measure of the change in Y for a unit change in X. It is also regression coefficient of
Y on X.
- a and b are found by minimizing SSE    2   (Yi  Yˆi ) 2
Where : Yi  observed value
Yˆi  estimated value  a  bX i

And this method is known as OLS (ordinary least square)

- Minimizing SSE    2 gives

b
 ( X i  X )(Yi  Y )   XY  nXY
 ( X i  X )2  X 2  nX 2

a  Y  bX

Example 1: The following data shows the score of 12 students for Accounting and
Statistics Examinations.

a) Calculate a simple correlation coefficient

b) Fit a regression line of Statistics on Accounting using least square estimates.
c) Predict the score of Statistics if the score of accounting is 85.

Accounting Statistics
X Y
1 74.00 81.00
2 93.00 86.00
3 55.00 67.00
4 41.00 35.00
5 23.00 30.00
6 92.00 100.00

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7 64.00 55.00
8 40.00 52.00
9 71.00 76.00
10 33.00 24.00
11 30.00 48.00
12 71.00 87.00

Scatter Diagram of raw data.

Accounting Statistics
X2 Y2 XY
X Y
1 74.00 81.00 5476.00 6561.00 5994.00
2 93.00 86.00 8649.00 7396.00 7998.00
3 55.00 67.00 3025.00 4489.00 3685.00
4 41.00 35.00 1681.00 1225.00 1435.00
5 23.00 30.00 529.00 900.00 690.00
6 92.00 100.00 8464.00 10000.00 9200.00

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7 64.00 55.00 4096.00 3025.00 3520.00
8 40.00 52.00 1600.00 2704.00 2080.00
9 71.00 76.00 5041.00 5776.00 5396.00
10 33.00 24.00 1089.00 576.00 792.00
11 30.00 48.00 900.00 2304.00 1440.00
12 71.00 87.00 5041.00 7569.00 6177.00
Total 687.00 741.00 45591.00 52525.00 48407.00
Mean 57.25 61.75

a)

The Coefficient of Correlation (r) has a value of 0.92. This indicates that the two
variables are positively correlated (Y increases as X increases).
b)
Using OLS:

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 Yˆ  7.0194  0.9560 X is the estimated regression line.

Scatter Diagram and Regression Line

a) Insert X=85 in the estimated regression line.

Yˆ  7.0194  0.9560 X
 7.0194  0.9560(85)  88.28

Example 2:

A car rental agency is interested in studying the relationship between the distance
driven in kilometer (Y) and the maintenance cost for their cars (X in birr). The
following summarized information is given based on samples of size 5.

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(Exercise)

2
 i 1 X i  147,000,000  i 1 Yi  314
5 5 2

i 1 X i  23,000 , i 1Yi  36 , i 1 X i Yi  212, 000

5 5 5

a) Find the least squares regression equation of Y on X

b) Compute the correlation coefficient and interpret it.
c) Estimate the maintenance cost of a car which has been driven for 6 km

- To know how far the regression equation has been able to explain the variation in Y
2
we use a measure called coefficient of determination ( r )
 (Yˆ  Y ) 2
i.e r 2

 (Y  Y ) 2
Where r  the simple correlatio n coefficien t.

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2
- r gives the proportion of the variation in Y explained by the regression of Y on X.
- 1  r gives the unexplained proportion and is called coefficient of indetermination.
2

Example: For the above problem (example 1): r  0.9194

 r 2  0.8453  84.53% of the variation in Y is explained and only 15.47% remains
unexplained and it will be accounted by the random term.
o Covariance of X and Y measures the co-variability of X and Y together. It is
denoted by S XY and given by
SX Y 
 ( X i  X )(Yi  Y )   XY  nXY
n 1 n 1
o Next we will see the relationship between the coefficients.
2
S SXY
i. r  XY  r 2  2 2
S X SY S X SY

ii. bS X rS
r b Y
SY SX
o When we fit the regression of X on Y , we interchange X and Y in all formulas,
i.e. we fit
Xˆ  a1  b1Y

b1 
 XY  nXY
 Y  nY
2 2

b1SY
a1  X  b1Y , r
SX
Here X is dependent and Y is independent.

Choice of Dependent and Independent variable

- In correlation analysis there is no need of identifying the dependent and

independent variable, because r is symmetric. But in regression analysis
If bYX is the regression coefficient of Y on X
bXY is the regression coefficient of X on Y

Then r  bYX S X  bXY SY  r 2  bYX * bXY

SY SX

- Moreover, bYX and bX Y are completely different numerically as well as

conceptually.

- Let us consider three cases concerning these coefficients.

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1. If the correlation is perfect positive, i.e. r  1 then the b values reciprocals of

each other.
2. If S X  SY , then irrespective of the value of r the b values are equal, i.e.
r  bYX  bXY ( but this is unlikely case)
3. The most important case is when S X  SY and r  1, here the b values are
not equal or reciprocals to each other, but rather the two lines differ ,
intersecting at the common point ( X , Y )
 Thus to determine if a regression equation is X on Y or Y on X ,
we have to use the formula r  bYX * bXY
2

 If r [1,1] , then our assumption is correct

 If r [1,1] , then our assumption is wrong

Example: The regression line between height (X) in inches and weight (Y) in lbs
of male students are:

4Y  15 X  530  0 and
20 X  3Y  975  0

Determine which is regression of Y on X and X on Y

Solution
We will assume one of the equation as regression of X on Y and the other as Y on X
and calculate r

Assume 4Y  15 X  530  0 is regression of X on Y

20 X  3Y  975  0 is regression of Y on X

Then write these in the standard form.

530 4 4
4Y  15 X  530  0  X   Y  bXY 
15 15 15
 975 20 20
20 X  3Y  975  0  Y   X  bYX 
3 3 3
 4  20 
 r 2  bXY * bYX      1.78  1 ,
 
15 3 

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This is impossible (contradiction). Hence our assumption is not correct. Thus
4Y  15 X  530  0 is regression of Y on X
20 X  3Y  975  0 is regression of X on Y
To verify:
 530 15 15
4Y  15 X  530  0  Y   X  bYX 
4 4 4
975 3 3
20 X  3Y  975  0  X   Y  bXY 
20 20 20
 15  3 
 0,1
9
 r 2  bYX * bXY    
 4  20  16

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