statistics 1

Chapter 1 1-1

Statistics for Business and Economics, 6/e © 2007 Pearson Education, Inc.

Chapter 1

Why Study Statistics?

Statistics for

Business and Economics

Program For The First Semester

Chap 1-2Qafqaz University F. N. Aliyev 2012

№ Dərslərin mövzuları

Saatların

miqdarı

Qeyd

Mühazirə

Məşğələ

Labora

tor

iya

1 Introduction 1

2 Introduction 1

3 Problem solving 1

4 Tables and Charts, Inferential statistics 1

5 Tables and Charts, Inferential statistics 1

6 Problem solving 1

7 Measures of Central Tendency 1

8 Measures of Central Tendency 1

9 Problem solving 1

10 Probability Distributions 1

11 Probability Distributions 1

12 Problem solving 1

13 Binomial Distribution 1

14 Binomial Distribution 1


16 Normal Distribution 1






22 Central Limit Theorem 1


№ Dərslərin mövzuları

Saatların

miqdarı

Qeyd

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Məşğələ

Labora

tori

ya





28 Sampling Distributions 1






34 Confidence Interval Estimation 1






40 Hypothesis Testing 1






Qafqaz University F. N. Aliyev 2012 Chap 1-3

İmtahanlardan Keçmə Qaydası

1. Məcburi semestr daxili fəaliyyət 100 bal 20%

2. Semestr daxili imtahan 100 bal 30 %

3. İstəyə bağlı semestr daxili fəaliyyət 100 bal 10%

4. Semestr sonu imtahan 100 bal 50 %

5. Kəsrlərin ləğvi imtahanı 100 bal 50 %

6. Əlavə imtahan 100 bal 100 %



Chapter Goals

After completing this chapter, you should be able to:

How statistics is used in business ?

The sources of data used in business

The types of data used in business

Explain key definitions:

Population vs. Sample

Parameter vs. Statistic

Descriptive vs. Inferential Statistics

Describe random sampling

Explain the difference between Descriptive and Inferential

statistics

What is Statistics?

“Statistics is a way to get information from data”

Data

Statistics

Information

Definitions: Oxford English Dictionary

Statistics is a tool for creating new understanding from a set

of numbers.

Chap 1-6Qafqaz University F. N. Aliyev 2012

Chapter 1 1-2



Every day you use news and information sources to gather

the facts that you need to lead your life. You might listen to

a weather forecast to decide what clothes to wear, and if

you live in a large city, you might listen to a commuter report

to learn about the best route for traveling to your job or

school.

Your personal likes and dislikes shape some of your

decisions, too. In spite of hearing bad reviews of a motion

picture that suggest you skip seeing it, you might decide to

go anyhow just because you happen to like a particular

actor who appears in that film.

Likewise, every day business managers have to make

decisions. Although managers sometimes resort to "gut

instincts" to make some decisions (this is more formally

known as unstructured decision making), they more typically

make decisions that are directly influenced by hard facts.


As a business student, you cannot really learn how

to make decisions, as such decisions require

instincts and insights that require years of

experience to form. You can learn, though, the

procedures and methods that will help you make

better decisions that are based on hard facts. When

you begin focusing on the procedures and methods

involved in the collecting, presenting, and

summarizing of a set of data, or forming conclusions

about that data, you have discovered statistics.


In the Good Tunes scenario, you should proceed

with the reasonable assumption that the bankers

seek to make a decision based on the hard facts you

help present, and not on other factors, such as

whims or personal likes or dislikes. Presenting the

wrong information or the correct information in the

wrong fashion could lead the bankers to make a bad

business decision, which could jeopardize the future

of Good Tunes. You need to know something about

statistics to provide the hard facts that are

necessary, and to know something about statistics,

you first need to know the basic concepts of

statistics.


1.1 BASIC CONCEPTS OF STATISTICS

Statistics is the branch of mathematics that

examines ways to process and analyze data.

Statistics provides procedures to collect and

transform data in ways that are useful to business

decision-makers. To understand anything about

statistics, you need to first understand the definition

of a variable.

Examples of variables are your gender, your major

field of study, the amount of money you have in your

wallet, and the amount of time it takes you to get

ready to go to school in the morning. The key aspect

of the word variable is the idea that items differ and

people differ.


The person next to you may be male rather than

female, may be majoring in a different field of

study than you, almost certainly has a different

amount of money in his or her wallet, and

undoubtedly takes a different amount of time to get

ready in the morning than you do. You should

distinguish between a variable, such as gender,

and its value for an individual observation (e.g.,

"male").

Now that variables have been defined, you need to

understand the meaning of population, sample,

parameter, and statistic.


Chapter 1 1-3


POPULATION

A population consists of all of the members of a

group about which you want to draw a conclusion.

SAMPLE

A sample is the portion of the population selected

for analysis.

PARAMETER

A parameter is a numerical measure that describes

a characteristic of population.

STATISTIC

A statistic is a numerical measure that describes a

characteristics of a sample.


Examples of populations are all the full-time

students at a college, all the voters in New York,

and all the people who went shopping at the local

mall this weekend. Samples could be selected

from each of the three populations mentioned

above. Examples include 10 full-time students

selected for a focus group, 500 voters in New

York, and 30 mall shoppers who were asked to

complete a customer satisfaction survey. In each

case, the people in the sample represent a

portion or subset of the people comprising the

population.


The average amount spent by all the people who

went shopping at the local mall this weekend is a

parameter. Information from all the shoppers in the

entire population is needed to compute this

parameter. The average amount spent by the 30

shoppers completing the customer satisfaction

survey is a statistic. Information from only 30

people who went to the local mall this weekend is

used in calculating the statistic.

Qafqaz University F. N. Aliyev 2012 Chap 1-15 Qafqaz University F. N. Aliyev 2012 Chap 1-16

Key Definitions

A population is the collection of all items of interest or

under investigation

N represents the population size

A sample is an observed subset of the population

n represents the sample size

A parameter is a specific characteristic of a population

A statistic is a specific characteristic of a sample



a b c d

ef gh i jk l m n

o p q rs t u v w

x y z

Population Sample

b c

g i n

o r u

y

Values calculated using

population data are called

parameters

Values computed from

sample data are called

statistics


Examples of Populations

Names of all registered voters in the United

States

Incomes of all families living in Daytona Beach

Annual returns of all stocks traded on the New

York Stock Exchange

Grade point averages of all the students in your

university

Chapter 1 1-4


THE PARTS OF STATİSTİCS

Statistics, itself, is divided into two branches,

both of which are applicable to managing

businesses. Descriptive statistics focuses on

collecting, summarizing, and presenting a set of

data. Inferential statistics uses sample data to

draw conclusions about a population.

Qafqaz University F. N. Aliyev 2012 Chap 1-19 Qafqaz University F. N. Aliyev 2012 Chap 1-20

Descriptive and Inferential Statistics

Two branches of statistics:

Descriptive statistics

Collecting, summarizing, and processing data to

transform data into information

Inferential statistics

provide the bases for predictions, forecasts, and

estimates that are used to transform information into

knowledge


Descriptive Statistics

Collect data

e.g., Survey

Present data

e.g., Tables and graphs

Summarize data

e.g., Sample mean =iX

n


Inferential Statistics

Estimation

e.g., Estimate the population

mean weight using the sample

mean weight

Hypothesis testing

e.g., Test the claim that the

population mean weight is 120

pounds

Inference is the process of drawing conclusions or making decisions about a population based on

sample results

Descriptive statistics has its roots in the recordkeeping

needs of large political and social organizations. For

example, every decade since 1790, the United States

has conducted a census that collects and summarizes

data about its citizens. Through the years, the U.S.

Census Bureau has been one of the many groups that

have refined the methods of descriptive statistics.

The foundation of inferential statistics is based on the

mathematics of probability theory. Inferential methods

use sample data to calculate statistics that provide

estimates of the characteristics of the entire

population.Qafqaz University F. N. Aliyev 2012 Chap 1-23

Where Start Statistics ? Today, applications of statistical methods can be

found in different areas of business. Accounting

uses statistical methods to select samples for

auditing purposes and to understand the cost drivers

in cost accounting. Finance uses statistical methods

to track trends in financial measures over time.

Management uses statistical methods to improve the

quality of the products manufactured or the services

delivered by an organization. Marketing uses

statistical methods to estimate the proportion of

customers who prefer one product over another and

why they do, and to draw conclusions about what

advertising strategy might be most useful in

increasing sales of a product.


Chapter 1 1-5


THE GROWTH OF STATISTICS AND

INFORMATION TECHNOLOGY

During the past century, statistics has played an

important role in spurring the use of information

technology and, in turn, such technology has

spurred the wider use of statistics. Statisticians

such as Pearson, Fisher, Gosset, Neyman, Wald,

and Tukey established the techniques of modern

inferential statistics in response to the need to

analyze large sets of population data that had

become increasingly costly, time-consuming, and

cumbersome to collect.


For many years businesses have had access to

statistical packages, such as Minitab and SPSS,

that are standardized sets of programs that help

managers use a wide range of statistical techniques.

Whereas such packages were once available only in

corporate computing centers, the increasing power

and connectivity of personal computers have

brought the statistical power of these packages to

the desktop, where they have joined such familiar

tools as word processing, worksheet, and Web

browser programs.


The leasing and training costs associated with statistical

packages have led many to consider using some of the

graphical and statistical functions of Microsoft Excel.

However, you need to be aware of concerns that many

statisticians have about the accuracy and completeness of

the statistical results that Excel produces. Unfortunately,

some investigators have determined that certain Microsoft

Excel statistical capabilities contain flaws that can lead to

invalid results especially when the data sets used are very

large or have unusual statistical properties (see reference

3). Clearly, when you use Microsoft Excel, you must be

careful about the data and the analysis you are

undertaking. Whether this complication outweighs the

benefits of Excel' attractive features is still an unanswered

question in business today.


Because learning in context enhances

comprehension, each chapter begins with a "Using

Statistics" scenario, such as the "Good Tunes—

Part I" that identifies a business problem in which

statistics can be applied to change data into the

useful information required for a rational decision.

Questions raised in the scenarios lead to answers

in the form of statistical methods presented in

subsequent sections of the text. By thinking about

these questions, you will gain an appreciation of

how business managers are using statistics today

to solve problems and improve the quality of their

products and services.


For the "Good Tunes—Part I" scenario, selecting

what to present is just as important as selecting the

proper method for presentation and summarization.

In this case, presumably the bankers themselves

would demand some of the data, the "financials" of

the business. But what other data could you collect

and present that would help win the approval of the

loans? (See "Good Tunes—Part II" below.) Of

course, having presented your data, you would

hope that the bankers would make the right

inferences. That is, you would hope that the bankers

were knowledgeable about the appropriate

statistical methods that assist in the loan-making

decision!


USİNG OF STATİSTİCS

Good Tunes—Part II

The owners of Good Tunes have decided to

supplement the financial data in their loan

application with data concerning customer

perceptions about Good Tunes. To help assess

these perceptions, Good Tunes has been

asking its customers to complete and promptly

return a customer satisfaction survey that is

included in every order. The survey includes the

following questions:


Chapter 1 1-6


Survey Provided by Good-Tunes


You have been asked to review the survey. What

type of data does the survey seek to collect?

What type of information can be generated from

the data of the completed survey? How can Good

Tunes use that information to improve the

perceived quality of the service and

merchandise? How can Good Tunes use that

information to increase its chance of getting a

loan approval? What other questions would you

suggest to include in the survey?


COLLECTING DATA

Managing a business effectively requires collecting

the appropriate data. In most instances, the data are

measurements acquired from items in a sample. The

samples are chosen from populations in such a

manner that the sample is as representative of the

population as possible. The most common technique

to ensure proper representation is to use a random

sample. (Chapter 7 for a detailed discussion of

sampling techniques.)

Many different types of circumstances require the

collection of data:


A marketing research analyst needs to assess the

effectiveness of a new television advertisement.

A pharmaceutical manufacturer needs to determine

whether a new drug is more effective than those

currently in use.

An operations manager wants to monitor a

manufacturing process to find out whether the quality

of a product is conforming to company standards.

An auditor wants to review the financial transactions of

a company in order to determine whether or not the

company is in compliance with generally accepted

accounting principles.

A potential investor wants to determine which firms

within which industries are likely to have accelerated

growth in a period of economic recovery.Qafqaz University F. N. Aliyev 2012 Chap 1-35

Identifying Sources of Data

Identifying the most appropriate source of data is a

critical aspect of statistical analysis. If biases,

ambiguities, or other types of errors flaw the data

being collected, even the most sophisticated

statistical methods will not produce accurate

information.

Four important sources of data are:

Data distributed by an organization or an individual

A designed experiment

A survey

An observational studyQafqaz University F. N. Aliyev 2012 Chap 1-36

Market research firms and trade associations also

distribute data pertaining to specific industries or

markets. Investment services such as Mergent's

provide financial data on a company-by-company

basis. Syndicated services such as A. C. Nielsen

provide clients with data enabling the comparison

of client products with those of their competitors.

Daily newspapers are filled with numerical

information regarding stock prices, weather

conditions, and sports statistics.


Chapter 1 1-7


As listed above, conducting an experiment is another

important data collection source. For example, to test

the effectiveness of laundry detergent, an experimenter

determines which brands in the study are more effective

in cleaning soiled clothes by actually washing dirty

laundry instead of asking customers which brand they

believe to be more effective. Proper experimental

designs are usually the subject matter of more advanced

texts, because they often involve sophisticated statistical

procedures. However, some fundamental experimental

design concepts will be considered in Chapter 10.

Conducting a survey is a third important data source.

Here the people being surveyed are asked questions

about their beliefs, attitudes, behaviors, and other

characteristics. Responses are then edited, coded, and

tabulated for analysis.Qafqaz University F. N. Aliyev 2012 Chap 1-38

Conducting an observational study is the fourth

important data source. In such a study, a researcher

observes the behavior directly, usually in its natural

setting. Observational studies take many forms in

business. One example is the focus group, a market

research tool that is used for eliciting unstructured

responses to open-ended questions. In a focus group, a

moderator leads the discussion, and all the participants

respond to the questions asked. Other, more structured

types of studies involve group dynamics and consensus

building and use various organizational behavior tools

such as brainstorming, the Delphi technique, and the

nominal-group method. Observational study techniques

are also used in situations in which enhancing

teamwork, or improving the quality of products and

service are management goals.Qafqaz University F. N. Aliyev 2012 Chap 1-39

Data sources are classified as being either primary

sources or secondary sources. When the data collector

is the one using the data for analysis, the source is

primary. When one organization or individual has compiled

the data that are used by another organization or

individual, the source is secondary.

Organizations and individuals that collect and publish data

typically use that data as a primary source and then let

others use it as a secondary source. For example, the

United States federal government collects and distributes

data in this way for both public and private purposes. The

Bureau of Labor Statistics collects data on employment as

well as distributing the monthly Consumer Price Index. The

Census Bureau oversees a variety of ongoing surveys

regarding population, housing, and manufacturing and

undertakes special studies on topics such as crime, travel,

and health care.Qafqaz University F. N. Aliyev 2012 Chap 1-40

Statistic İnformation About

Azerbaijan

Azərbaycan Respublikası Dövlət Statistika

Komitəsi,

Azərbaycanın statistik göstəriciləri .

http://www.azstat.org/

Azərbaycan Respublikası Dövlət Statistika

Komitəsi,

Azərbaycanın regionları .

http://www.azstat.org.shtml


TYPES OF DATA

Data are the observed values of variables, for

example, the responses to a survey. Statisticians

develop surveys to deal with a variety of different

variables. As illustrated in figure, there are two types of

variables—categorical and numerical.


Categorical variables yield categorical responses,

such as yes or no answers. An example is the

response to the question "Do you currently own any

stocks or bonds?" because it is limited to a simple

yes or no answer. Another example is the response

to the question on the Good Tunes survey, "Are you

likely to buy additional merchandise through Good

Tunes in the next 12 months?" Categorical variables

can also yield more than two possible responses.

For example, "Which day of the week are you most

likely to eat dinner in a restaurant?”


http://www.google.az/url?q=http://www.azstat.org/&sa=U&ei=T1dmTaPZJoPAhAf_xuyJDg&ved=0CA0QFjAA&usg=AFQjCNHM5gupfxGiD8nIQ7uyQ_N4Y3w5OQ




http://www.azstat.org.shtml/

Chapter 1 1-8


Numerical variables yield numerical responses

such as your height in inches. Other examples are

how much money you expect to spend on stereo

equipment in the next 12 months (from the Good

Tunes customer satisfaction survey) or the response

to the question "To how many magazines do you

currently subscribe?" There are two types of

numerical variables: discrete and continuous.

Discrete variables produce numerical responses

that arise from a counting process. "The number of

magazines subscribed to" is an example of a

discrete numerical variable, because the response is

one of a finite number of integers. You subscribe to

zero, one, two, and so on, magazines.


Continuous variables produce numerical responses that

arise from a measuring process. Your height is an example

of a continuous numerical variable, because the response

takes on any value within a continuum or interval,

depending on the precision of the measuring instrument.

For example, your height may be 67 inches, 67.5 inches, or

67.53 inches, depending on the precision of the available

instruments.

No two persons are exactly the same height and the more

precise the measuring device used, the greater the

likelihood of detecting differences between their heights.

However, most measuring devices are not sophisticated

enough to detect small differences. Hence, tied

observations are often found in experimental or survey data

even though the variable is truly continuous, and

theoretically all values of a continuous variable are different.Qafqaz University F. N. Aliyev 2012 Chap 1-45


Types of Data

Data

Categorical Numerical

Discrete Continuous

Examples:

Marital Status

Are you registered to

vote?

Eye Color

(Defined categories or

groups)

Examples:

Number of Children

Defects per hour

(Counted items)

Examples:

Weight

Voltage

(Measured characteristics)


Random Sampling

Simple random sampling is a procedure in which

each member of the population is chosen strictly by chance,

each member of the population is equally likely to be chosen,

and

every possible sample of n objects is equally likely to be chosen

The resulting sample is called a random sample


The Decision Making Process

Begin Here:

Identify the

Problem

Data

Information

Knowledge

Decision

Descriptive Statistics,

Probability, Computers

Experience, Theory,

Literature, Inferential

Statistics, Computers

Chapter 1 1-9



Chapter Summary

Introduced key definitions:


Parameter vs. Statistic

Descriptive vs. Inferential statistics

Described random sampling

Examined the decision making process

CHAPTER REVIEW PROBLEMS


1.12 What is the difference between a sample and a

population?

1.13 What is the difference between a statistic and a

parameter?

1.14 What is the difference between descriptive and inferential

statistics?

1.15 What is the difference between a categorical and a

numerical variable?

1.16 What is the difference between a discrete and a continuous

variable?

1.17 What is an operational definition and why is it so

important?

Checking Your Understanding

Exercises and Questions

1.1 Three different beverages are sold at a fast-food

restaurant—soft drinks, tea, and coffee. Explain why

the type of beverage sold is an example of a

categorical variable.

1.2 Soft drinks are sold in three sizes in a fast-food

restaurant—small, medium, and large. Explain why

the size of the soft drink is a categorical variable.


ANSWER

1.2 Small, medium and large sizes are

categories.




1.3 Suppose that you measure the time it takes to

download an MP3 file from the Internet.

a.Explain why the download time is a numerical

variable.

b.Is the variable discrete or continuous?


(Applying the Concepts)


1.4 For each of the following variables, determine

whether the variable is categorical or numerical. If

the variable is numerical, determine whether the

variable is discrete or continuous.

a.Number of telephones per household

b.Length (in minutes) of the longest longdistance call

made per month

c.Whether there is a telephone line connected to a

computer modem in the household

d.Whether there is a fax machine in the household

Chapter 1 1-10


ANSWER

1.4 (a) The number of telephones is a

numerical variable that is discrete because the

variable is counted, (b) The length of the

longest longdistance call is a numerical

variable that is continuous since any value

within a range of values can occur, (c) Whether

there is a telephone line connected to a

computer modem in the household is a

categorical variable because the answer can

only be yes or no. (d) Same answer as in (c).




1.5 The following information is collected from

students upon exiting the campus bookstore during

the first week of classes:

a.Amount of time spent shopping in the bookstore

b.Number of textbooks purchased

c.Academic major

d.Gender

Classify each of these variables as categorical or

numerical. If the variable is numerical, determine

whether the variable is discrete or continuous.




whether the variable is categorical or numerical. If the

variable is numerical, determine whether the variable

is discrete or continuous.

a.Name of Internet provider

b.Amount of time spent surfing the Internet per week

c. Number of e-mails received in a week

d. Number of online purchases m.ade in a month

ANSWER

1.6 (a) categorical; (b) numerical, continuous;

(c) numerical, discrete; (d) numerical, discrete.





whether the variable is categorical or numerical. If the

variable is numerical, determine whether the variable

is discrete or continuous.

a.Amount of money spent on clothing in the last month

b.Favorite department store

c.Most likely time period during which shopping for

clothing takes place (weekday, weeknight, or

weekend)

d.Number of pairs of winter gloves owned



1.8 Suppose the following information is collected

from Robert Keeler on his application for a home

mortgage loan at the Metro County Savings and

Loan Association:

a.Monthly Payments: $1,427

b.Number of Jobs in Past 10 Years: 1

c.Annual Family Salary Income: $86,000

d.Marital Status: Married

Classify each of the responses by type of data.

Chapter 1 1-11


Answer

1.8 (a) numerical, continuous; (b) numerical,

discrete; (c) numerical, continuous; (d)

categorical.




1.9 One of the variables most often included in surveys

is income. Sometimes the question is phrased "What

is your income (in thousands of dollars)?" In other

surveys, the respondent is asked to "Place an X in the

circle corresponding to your income level" and given a

number of ranges to choose from.

a. In the first format, explain why income might be

considered either discrete or continuous.

b.Which of these two formats would you prefer to use if

you were conducting a survey? Why?

c. Which of these two formats would likely bring you a

greater rate of response? Why?



1.10 If two students score a 90 on the same

examination, what arguments could be used to

show that the underlying variable test score is

continuous?

Answer

1.10 The underlying variable, ability of the

students, may be continuous but the measuring

device, the test, does not have enough

precision to distinguish between the two

students.




1.11 The director of market research at a large department

store chain wanted to conduct a survey throughout a

metropolitan area to determine the amount of time

working women spend shopping for clothing in a typical

month.

a. Describe both the population and the sample of

interest, and indicate the type of data the director

might wish to collect.

b. Develop a first draft of the questionnaire needed in

(a) by writing a series of three categorical questions

and three numerical questions that you feel would be

appropriate for this survey.


(Applying the Concepts)


1.18 The Data and Story Library

lib.stat.cmu.edu/DASL is an online library of data

files and stories that illustrate the use of basic

statistical methods. The stories are classified by

method and by topic. Go to this site and click on List

all topics. Pick a story and summarize how statistics

are used in the story.

http://lib.stat.cmu.edu/DASL

Chapter 1 1-12




1.19 Go to the official Microsoft Excel Web site

www.microsoft.com/office/excel. Explain how you

think Microsoft Excel could be useful in the field of

statistics.

1.20 Go to the official Minitab Web site

www.minitab.com. Explain how you think Minitab

could be useful in the field of statistics.

1.21 Go to the official SPSS Web site

www.spss.com. Explain how you think SPSS could

be useful in the field of statistics.



1.22 The Gallup organization releases the results of

recent polls at its Web site www.gallup.com. Go to

this site and click on an article of interest to you in the

"Top Stories" section.

a.Give an example of a categorical variable found in

the article.

b.Give an example of a numerical variable found in

the article.

c. Is the variable you selected in (b) discrete or

continuous?



1.23 The U.S. Census Bureau www.census.gov

site contains survey information on people, business,

geography, and other topics. Go to the site and click

on Housing in the "People" section. Then click on

American Housing Survey.

a. Briefly describe the American Housing Survey.

b. Give an example of a categorical variable found in this

survey.

c. Give an example of a numerical variable found in this

survey.

d. Is the variable you selected in (c) discrete or continuous?



1.24 On the U.S. Census Bureau www.census.gov site,

click on Survey of Business Owners in the"Business"

section and read the description of The Survey of Business

Owners and Self-Employed Persons (SBO). Click on SBO-1

in the "Forms and Instructions" section to view the actual

survey form used.

a. Give an example of a categorical random variable found

in this survey.

b. Give an example of a numerical random variable found in

this survey.

c. Is the variable you selected in (b) discrete or continuous?



1.25 In a report based on U.S. Transportation Department

statistics, the budget carrier JetBlue was number 1 in qual

ity among all U.S. airlines in 2003. JetBlue had the second

best on-time performance, arriving on time 86% of the

Introduction to the Web Cases 11 time. Also, Jet Blue

customers filed fewer complaints than all other airlines but

one ("JetBlue ranked No. 1 Airline, Report Says,"

USAToday.com, April 5, 2004).

a. Which of the four types of data sources listed in Section

1.4 on page 7 do you think were used in this study?

b. Name a categorical variable discussed in this article.

c. Name a numerical variable discussed in this article.


1.26 According to a Goldman Sachs survey, only about 4% of U.S.

households bank online. A survey by Cyber Dialogue investigated reasons

people quit online banking after trying it. A partial listing of the results of

the Cyber Dialogue survey are given below ("USA Snapshots," USA

Today, February 21, 2000, Al).

Why Did You Quit Online Banking?

Too complicated or time-consuming 27%

Unhappy with customer service 25%

No need/not interested 20%

Concerns about security or fraud 11%

Too costly 11%

Concerns about privacy 5%

a. Describe the population for the Goldman Sachs survey.

b. Describe the population for the Cyber Dialogue survey.

c. Is a response to the question "Why did you quit online

banking?" categorical or numerical?

d. Twenty-seven percent of respondents indicated that

online banking was too complicated or too time-con

suming. Is this a parameter or a statistic?

http://www.microsoft.com/office/excel

http://www.minitab.com/

http://www.spss.com/

http://www.gallup.com/

http://www.census.gov/



http://usatoday.com/

Chapter 1 1-13


ANSWER

1.26 (a) all U.S. households; (b) all people who

have tried and quit online banking; (c)

categorical; (d) a statistic.




1.27 A manufacturer of cat food was planning to survey households

in the United States to determine purchasing habits of cat owners.

Among the questions to be included are those that relate to

where cat food is primarily purchased.

whether dry or moist cat food is purchased.

the number of cats living in the household.

whether or not the cat is pedigreed.

a. Describe the population.

b. For each of the four items listed, indicate whether the

variable is categorical or numerical. If numerical, is it

discrete or continuous?

c. Develop five categorical questions for the survey.

d. Develop five numerical questions for the survey.


1.5 The college surveyed its students to determine

average-weekly time spent surfing the Internet. From

a sample of 174 students the average time was

counted to be 6.1 hours.

a. What is the population?

b. What is the sample?

c. What is the statistic?

d. Is the value 6.1 hours a parameter or a

statistic?



K 1.6 One airline claims that less than 1% of its

scheduled flights out of Orlando International

Airport depart late. From a random sample of

200 flights, 1.5% were found to depart later than

the scheduled time.

a. What is the population?

b. What is the sample?

c. What is the statistic?

d. Is 1.5% a parameter or a statistic?


ANSWER

1.6 a. The population consists of all of the

airline's scheduled flights at Orlando

International Airport.

b. The sample consists of the randomly

selected 200 flights.

c. The statistic is the 1.5% that were found to

depart later than the scheduled time for

the 200 randomly selected flights.

d. 1.5% is a sample statistic.



1.7 Suppose that you own a grocery store.

a. Give an example of a question that could be

answered using descriptive statistics.

b. Give an example of a question where

estimating a parameter would be helpful.

c. Give an example of a question concerning a

possible relationship between two variables of

interest to your grocery business.

d. Give an example of a forecasting question.


Chapter 1 1-14



1.8 Determine if descriptive statistics or

inferential statistics should be used to obtain the

following information:

a. A graph that shows the number of defective

bottles produced during the day shift over one

week's time

b. An estimate of the percentage of employees

who arrive to work late

c. An indication of the relationship between

years of employee experience and pay scale


ANSWER

1.8 a. Descriptive—to describe information

about a one-week sample.

b. Inferential statistics—to estimate the true

percentage of all employees who arrive to

work late.

c. Inferential statistics—to predict the

relationship between years of experience and

pay scale.


1.9 A random sample of 100 university students was asked a

series of questions to obtain demographic data on their status

as an American or an international student, major, gender, age,

year in school, and current grade point average (GPA). Other

questions asked for their levels of satisfaction with campus

parking, campus housing, and campus dining. Responses to

these satisfaction questions were measured on a scale from 1

to 5 with 5 being the highest level of satisfaction. Finally, these

students were asked if they planned to attend graduate school

within 5 years of their college graduation (0: no; 1: yes). These

data are contained in the data file Finstad and Lie Study.

a. Give an example of how to apply descriptive statistics to

this data.

b. Give an example of an estimation question that

could be answered by inferential statistics.

c. Give an example of a possible relationship

between two variables.Qafqaz University F. N. Aliyev 2012 Chap 1-82


K2.1 State whether each of the following

variables is categorical or numerical. If categorical,

give the level of measurement. If numerical, is it

discrete or continuous?

a. Number of e-mail messages sent daily by a

financial planner

b. Actual cost of a student's textbooks for a given

semester

c. Your monthly electricity bill

d. Faculty ranks (professor, associate professor,

assistant professor, instructor)Qafqaz University F. N. Aliyev 2012 Chap 1-83


K2.2 The public relations office of a professional

basketball team wants information about fans that

attend postseason tournament games. A

questionnaire is given to each fan upon entrance to

the postseason game. Is the answer to each of the

following questions categorical or numerical? If

categorical, give the level of measurement. If

numerical, is it discrete or continuous?

a. Are you a season-ticket holder?

b. Do you live in Orange County?

c. What was the actual cost of your ticket to this

postseason game?Qafqaz University F. N. Aliyev 2012 Chap 1-84

ANSWER

2.2 a. Categorical data. The measurements

levels are qualitative—nominal, yes/no

response.

b. Categorical data. The measurement levels

are are qualitative—nominal.

c. Numerical data. Dollar amounts are

generally considered continuous, even though

we may truncate dollar amounts and treat dollar

amounts as if they were the same

as discrete.


Chapter 1 1-15


K2.3 A questionnaire was distributed to students at

a liberal arts college to find out the level of student

satisfaction with various activities and services. For

example, concerning the "method of registration for

classes for the next semester," students were asked to

check one of the following boxes:

very satisfied

moderately satisfied

neutral

moderately dissatisfied

very dissatisfied

Is a student's response to this question numerical or

categorical? If numerical, is it discrete or continuous?

If categorical, give the level of measurement.Qafqaz University F. N. Aliyev 2012 Chap 1-86


K2.4 Faculty at one university were asked a

series of questions in a recent survey. State the type

of data for each question.

a. Indicate your level of satisfaction with your

teaching load (very satisfied; moderately satisfied;

neutral; moderately dissatisfied; very dissatisfied).

b. How many articles did you have published in

refereed journals during the last year?

c. Did you attend the last university faculty meeting?

d. Do you think that the teaching evaluation

process needs to be revised?Qafqaz University F. N. Aliyev 2012 Chap 1-87

ANSWER

2.4

a. Categorical—Qualitative—ordinal

b. Numerical—Quantitative—discrete

c. Categorical—Qualitative—nominal

d. Categorical—Qualitative—nominal



K2.5 A sample of customers in a specialty ice

cream store

was asked a series of questions. Identify the type of

data for each question.

a. What is your favorite flavor of ice cream?

b. How many times a month do you eat ice cream?

c. Do you have children under the age of 10 living

in your home?

d. Have you tried our latest specialty ice cream

flavor?Qafqaz University F. N. Aliyev 2012 Chap 1-89

K2.6 Residents in one housing development were

asked a series of questions by their homeowners'

association. Identify the type of data for each

question.

a. Did you play golf during the last month on the

development's new golf course?

b. How many times have you eaten at the country

club restaurant during the last three months?

c. Do you own a camper?

d. Rate the new security system for the develop

ment (very good, good, poor, very poor).Qafqaz University F. N. Aliyev 2012 Chap 1-90

Exercises and Questions ANSWER

2.6 a. Categorical—Qualitative—nominal

b. Numerical—Quantitative—discrete

c. Categorical—Qualitative—nominal; yes/no

response

d. Categorical—Qualitative—ordinal


Chapter 1 1-16


Translation of Key Terms

categorical variables-kateqorik dəyişənlər

continuous variables-kəsilməz dəyişənlər

data-məlumat

descriptive statistics-təsviri statistika

discrete variables-diskret dəyişənlər

focus group-

inferential statistics-ümumiləşdirici statistika

numerical variables-ədədi dəyişənlər

operational definition-

parameter-parametrQafqaz University F. N. Aliyev 2012 Chap 1-92

population-populyasiya(ana müşahidə)

primary sources-əsas mənbələr

sample-nümunə(seçmə müşahidə)

secondary sources-ikinci mənbələr

statistic-statistika

statistics-statistika(elm mənasında)

statistical packages-statistik programlar

variables-dəyişənlər


Translation of Key Terms

statistics 1

Documents

telephone

quit online

goldman sachs

cyber dialogue

good tunespart

census bureau

average amount

customer satisfaction