CHAPTER 3:
Statistical Description of Data
to accompany
Introduction to Business Statistics
fourth edition,by Ronald M,Weiers
Presentation by Priscilla Chaffe-Stengel
Donald N,Stengel
? 2002 The Wadsworth Group
Chapter 3 - Learning Objectives
? Describe data using measures of central
tendency and dispersion:
– for a set of individual data values,and
– for a set of grouped data.
? Convert data to standardized values.
? Use the computer to visually represent
data.
? Use the coefficient of correlation to
measure association between two
quantitative variables.
? 2002 The Wadsworth Group
Chapter 3 - Key Terms
? Measures of
Central
Tendency,
The Center
? Mean
– μ,population;,sample
? Weighted Mean
? Median
? Mode
(Note comparison of mean,
median,and mode)
x
? 2002 The Wadsworth Group
Chapter 3 - Key Terms
? Measures of
Dispersion,
The Spread
? Range
? Mean absolute deviation
? Variance
(Note the computational difference
between s2 and s2.)
? Standard deviation
? Interquartile range
? Interquartile deviation
? Coefficient of variation
? 2002 The Wadsworth Group
Chapter 3 - Key Terms
? Measures of
Relative
Position
? Quantiles
– Quartiles
– Deciles
– Percentiles
? Residuals
? Standardized values
? 2002 The Wadsworth Group
Chapter 3 - Key Terms
? Measures of
Association
? Coefficient of correlation,r
– Direction of the relationship:
direct (r > 0) or inverse (r < 0)
– Strength of the relationship:
When r is close to 1 or –1,the linear
relationship between x and y is
strong,When r is close to 0,the linear
relationship between x and y is weak,
When r = 0,there is no linear
relationship between x and y.
? Coefficient of determination,r2
– The percent of total variation in y
that is explained by variation in x.
? 2002 The Wadsworth Group
The Center,Mean
? Mean
– Arithmetic average = (sum all values)/# of values
?Population,μ= (Sxi)/N
?Sample,= (Sxi)/n
Be sure you know how to get the value easily
from your calculator and computer softwares.
Problem,Calculate the average number of truck shipments
from the United States to five Canadian cities for the
following data given in thousands of bags:
Montreal,64.0; Ottawa,15.0; Toronto,285.0;
Vancouver,228.0; Winnipeg,45.0 (Ans,127.4)
x
? 2002 The Wadsworth Group
The Center,Weighted Mean
? When what you have is grouped data,
compute the mean using μ= (Swixi)/Swi
Problem,Calculate the average profit from truck shipments,
United States to Canada,for the following data given in
thousands of bags and profits per thousand bags:
Montreal 64.0 Ottawa 15.0 Toronto 285.0
$15.00 $13.50 $15.50
Vancouver 228.0 Winnipeg 45.0
$12.00 $14.00
(Ans,$14.04 per thous,bags)
? 2002 The Wadsworth Group
The Center,Median
? To find the median:
1,Put the data in an array.
2A,If the data set has an ODD number of numbers,the median
is the middle value.
2B,If the data set has an EVEN number of numbers,the
median is the AVERAGE of the middle two values.
(Note that the median of an even set of data values is not
necessarily a member of the set of values.)
? The median is particularly useful if there are
outliers in the data set,which otherwise tend to
sway the value of an arithmetic mean.
? 2002 The Wadsworth Group
The Center,Mode
? The mode is the most frequent value.
? While there is just one value for the
mean and one value for the median,
there may be more than one value for
the mode of a data set.
? The mode tends to be less frequently
used than the mean or the median.
? 2002 The Wadsworth Group
Comparing Measures of
Central Tendency
? If mean = median = mode,the shape of the distribution is
symmetric.
? If mode < median < mean or if mean > median > mode,
the shape of the distribution trails to the right,
is positively skewed.
? If mean < median < mode or if mode > median > mean,
the shape of the distribution trails to the left,
is negatively skewed.
? 2002 The Wadsworth Group
The Spread,Range
? The range is the distance between the
smallest and the largest data value in the
set.
? Range = largest value – smallest value
? Sometimes range is reported as an
interval,anchored between the smallest
and largest data value,rather than the
actual width of that interval.
? 2002 The Wadsworth Group
Key Concept - Residuals
? Residuals are the differences between
each data value in the set and the group
mean:
– for a population,xi – μ
– for a sample,xi – x
? 2002 The Wadsworth Group
The Spread,MAD
? The mean absolute deviation is found
by summing the absolute values of all
residuals and dividing by the number
of values in the set:
for a population,MAD = (S|xi – μ| )/N
for a sample,MAD = (S|xi – |)/nx
? 2002 The Wadsworth Group
The Spread,Variance
? Variance is one of the most frequently used
measures of spread,
– for population,
– for sample,
? The right side of each equation is often used
as a computational shortcut.
s 2 ? S ( x i – ? )
2
N ?
S ( x i ) 2 – N ?? 2
N
s 2 ?
S ( x i – x ) 2
n – 1 ?
S ( x i ) 2 – n ? x 2
n – 1
? 2002 The Wadsworth Group
The Spread,Standard Deviation
? Since variance is given in squared units,
we often find uses for the standard
deviation,which is the square root of
variance:
– for a population,
– for a sample,
Be sure you know how to get the values easily
from your calculator and computer softwares.
s ? s 2
s ? s2
? 2002 The Wadsworth Group
Coefficient of Variation
? The coefficient of variation (CV)
expresses the standard deviation as a
percent of the mean,indicating the
relative amount of dispersion in the
data,CV ? s
? ?100 %
? 2002 The Wadsworth Group
Relative Position - Quartiles
? One of the most frequently used quantiles is the
quartile.
? Quartiles divide the values of a data set into four
subsets of equal size,each comprising 25% of the
observations.
? To find the first,second,and third quartiles:
– 1,Arrange the N data values into an array.
– 2,First quartile,Q1 = data value at position (N + 1)/4
– 3,Second quartile,Q2 = data value at position 2(N + 1)/4
– 4,Third quartile,Q3 = data value at position 3(N + 1)/4
? 2002 The Wadsworth Group
What is a Standardized Value?
? How far above or below the individual value
is compared to the population mean in units
of standard deviation
–,How far above or below”= (data value – mean)
which is the residual...
–,In units of standard deviation” = divided by s
? Standardized data value
– A negative z means the data value falls below the
mean.
x – ?s ? z
? 2002 The Wadsworth Group
Why is a Standardized Value
Important?
?Chebyshev’s Theorem,For either a
sample or a population,the percentage
of observations that fall within k (for k >
1) standard deviations of the mean will
be at least
(1 – 1k 2 )?100 %
? 2002 The Wadsworth Group
Why is a Standardized Value
Important?
? The Empirical Rule:
For bell-shaped,symmetric distributions,
– about 68% of the observations will fall within 1
standard deviation of the mean,
– about 95% of the observations will fall within 2
standard deviations of the mean,
– practically all of the observations will fall
within 3 standard deviations of the mean.
? 2002 The Wadsworth Group
An Example,Problem 3.54
A law enforcement agency administering
breathalyzer tests to a sample of drivers
stopped at a New Year’s Eve roadblock
measured the following blood alcohol levels
for the 25 drivers who were stopped:
0.00% 0.08% 0.15% 0.18% 0.02%
0.04% 0.00 % 0.03 % 0.11 % 0.17%
0.05 % 0.21 % 0.01 % 0.10 % 0.19 %
0.00 % 0.09 % 0.05 % 0.03 % 0.00 %
0.03 % 0.00 % 0.16 % 0.04 % 0.10 %
? 2002 The Wadsworth Group
Problem 3.54,continued
? Calculate the mean and standard
deviation from this sample.
Ans,Mean = 0.0736%
Standard Deviation = 0.0684%
? 2002 The Wadsworth Group
Problem 3.54,continued
? Use Chebyshev’s Theorem to determine the
minimum percentage of observations that should
fall within k = 1.50 units of standard deviation
from the mean.
Ans:
At least 55.55% of the data values should fall within
k = 1.50 units of standard deviation from the mean.
(1 – 1
k 2
)?100 % ? (1 –
1
1, 50
2
) ?100 %
? (1 – 0, 4444 ) ?100 % ? 55, 55 %
? 2002 The Wadsworth Group
Problem 3.54,continued
? Do the sample results support
Chebyshev’s Theorem?
Ans,1.50 (s) = 0.1026%
mean + 1.50 (s) = 0.0736% + 0.1026%
= 0.1762%
mean – 1.50 (s) = 0.0736% – 0.1026%
= – 0.0290%
A total of 22/25 data values fall in this interval,or 88%
of the sample,Yes,the data support Chebyshev’s
Theorem.
? 2002 The Wadsworth Group
Problem 3.54,continued
? Calculate the coefficient of variation for
these data.
Ans:CV ? s
? ?100 % ?
0, 0684 %
0, 0736 %
?100 % ? 92, 9 %
? 2002 The Wadsworth Group
Statistical Description of Data
to accompany
Introduction to Business Statistics
fourth edition,by Ronald M,Weiers
Presentation by Priscilla Chaffe-Stengel
Donald N,Stengel
? 2002 The Wadsworth Group
Chapter 3 - Learning Objectives
? Describe data using measures of central
tendency and dispersion:
– for a set of individual data values,and
– for a set of grouped data.
? Convert data to standardized values.
? Use the computer to visually represent
data.
? Use the coefficient of correlation to
measure association between two
quantitative variables.
? 2002 The Wadsworth Group
Chapter 3 - Key Terms
? Measures of
Central
Tendency,
The Center
? Mean
– μ,population;,sample
? Weighted Mean
? Median
? Mode
(Note comparison of mean,
median,and mode)
x
? 2002 The Wadsworth Group
Chapter 3 - Key Terms
? Measures of
Dispersion,
The Spread
? Range
? Mean absolute deviation
? Variance
(Note the computational difference
between s2 and s2.)
? Standard deviation
? Interquartile range
? Interquartile deviation
? Coefficient of variation
? 2002 The Wadsworth Group
Chapter 3 - Key Terms
? Measures of
Relative
Position
? Quantiles
– Quartiles
– Deciles
– Percentiles
? Residuals
? Standardized values
? 2002 The Wadsworth Group
Chapter 3 - Key Terms
? Measures of
Association
? Coefficient of correlation,r
– Direction of the relationship:
direct (r > 0) or inverse (r < 0)
– Strength of the relationship:
When r is close to 1 or –1,the linear
relationship between x and y is
strong,When r is close to 0,the linear
relationship between x and y is weak,
When r = 0,there is no linear
relationship between x and y.
? Coefficient of determination,r2
– The percent of total variation in y
that is explained by variation in x.
? 2002 The Wadsworth Group
The Center,Mean
? Mean
– Arithmetic average = (sum all values)/# of values
?Population,μ= (Sxi)/N
?Sample,= (Sxi)/n
Be sure you know how to get the value easily
from your calculator and computer softwares.
Problem,Calculate the average number of truck shipments
from the United States to five Canadian cities for the
following data given in thousands of bags:
Montreal,64.0; Ottawa,15.0; Toronto,285.0;
Vancouver,228.0; Winnipeg,45.0 (Ans,127.4)
x
? 2002 The Wadsworth Group
The Center,Weighted Mean
? When what you have is grouped data,
compute the mean using μ= (Swixi)/Swi
Problem,Calculate the average profit from truck shipments,
United States to Canada,for the following data given in
thousands of bags and profits per thousand bags:
Montreal 64.0 Ottawa 15.0 Toronto 285.0
$15.00 $13.50 $15.50
Vancouver 228.0 Winnipeg 45.0
$12.00 $14.00
(Ans,$14.04 per thous,bags)
? 2002 The Wadsworth Group
The Center,Median
? To find the median:
1,Put the data in an array.
2A,If the data set has an ODD number of numbers,the median
is the middle value.
2B,If the data set has an EVEN number of numbers,the
median is the AVERAGE of the middle two values.
(Note that the median of an even set of data values is not
necessarily a member of the set of values.)
? The median is particularly useful if there are
outliers in the data set,which otherwise tend to
sway the value of an arithmetic mean.
? 2002 The Wadsworth Group
The Center,Mode
? The mode is the most frequent value.
? While there is just one value for the
mean and one value for the median,
there may be more than one value for
the mode of a data set.
? The mode tends to be less frequently
used than the mean or the median.
? 2002 The Wadsworth Group
Comparing Measures of
Central Tendency
? If mean = median = mode,the shape of the distribution is
symmetric.
? If mode < median < mean or if mean > median > mode,
the shape of the distribution trails to the right,
is positively skewed.
? If mean < median < mode or if mode > median > mean,
the shape of the distribution trails to the left,
is negatively skewed.
? 2002 The Wadsworth Group
The Spread,Range
? The range is the distance between the
smallest and the largest data value in the
set.
? Range = largest value – smallest value
? Sometimes range is reported as an
interval,anchored between the smallest
and largest data value,rather than the
actual width of that interval.
? 2002 The Wadsworth Group
Key Concept - Residuals
? Residuals are the differences between
each data value in the set and the group
mean:
– for a population,xi – μ
– for a sample,xi – x
? 2002 The Wadsworth Group
The Spread,MAD
? The mean absolute deviation is found
by summing the absolute values of all
residuals and dividing by the number
of values in the set:
for a population,MAD = (S|xi – μ| )/N
for a sample,MAD = (S|xi – |)/nx
? 2002 The Wadsworth Group
The Spread,Variance
? Variance is one of the most frequently used
measures of spread,
– for population,
– for sample,
? The right side of each equation is often used
as a computational shortcut.
s 2 ? S ( x i – ? )
2
N ?
S ( x i ) 2 – N ?? 2
N
s 2 ?
S ( x i – x ) 2
n – 1 ?
S ( x i ) 2 – n ? x 2
n – 1
? 2002 The Wadsworth Group
The Spread,Standard Deviation
? Since variance is given in squared units,
we often find uses for the standard
deviation,which is the square root of
variance:
– for a population,
– for a sample,
Be sure you know how to get the values easily
from your calculator and computer softwares.
s ? s 2
s ? s2
? 2002 The Wadsworth Group
Coefficient of Variation
? The coefficient of variation (CV)
expresses the standard deviation as a
percent of the mean,indicating the
relative amount of dispersion in the
data,CV ? s
? ?100 %
? 2002 The Wadsworth Group
Relative Position - Quartiles
? One of the most frequently used quantiles is the
quartile.
? Quartiles divide the values of a data set into four
subsets of equal size,each comprising 25% of the
observations.
? To find the first,second,and third quartiles:
– 1,Arrange the N data values into an array.
– 2,First quartile,Q1 = data value at position (N + 1)/4
– 3,Second quartile,Q2 = data value at position 2(N + 1)/4
– 4,Third quartile,Q3 = data value at position 3(N + 1)/4
? 2002 The Wadsworth Group
What is a Standardized Value?
? How far above or below the individual value
is compared to the population mean in units
of standard deviation
–,How far above or below”= (data value – mean)
which is the residual...
–,In units of standard deviation” = divided by s
? Standardized data value
– A negative z means the data value falls below the
mean.
x – ?s ? z
? 2002 The Wadsworth Group
Why is a Standardized Value
Important?
?Chebyshev’s Theorem,For either a
sample or a population,the percentage
of observations that fall within k (for k >
1) standard deviations of the mean will
be at least
(1 – 1k 2 )?100 %
? 2002 The Wadsworth Group
Why is a Standardized Value
Important?
? The Empirical Rule:
For bell-shaped,symmetric distributions,
– about 68% of the observations will fall within 1
standard deviation of the mean,
– about 95% of the observations will fall within 2
standard deviations of the mean,
– practically all of the observations will fall
within 3 standard deviations of the mean.
? 2002 The Wadsworth Group
An Example,Problem 3.54
A law enforcement agency administering
breathalyzer tests to a sample of drivers
stopped at a New Year’s Eve roadblock
measured the following blood alcohol levels
for the 25 drivers who were stopped:
0.00% 0.08% 0.15% 0.18% 0.02%
0.04% 0.00 % 0.03 % 0.11 % 0.17%
0.05 % 0.21 % 0.01 % 0.10 % 0.19 %
0.00 % 0.09 % 0.05 % 0.03 % 0.00 %
0.03 % 0.00 % 0.16 % 0.04 % 0.10 %
? 2002 The Wadsworth Group
Problem 3.54,continued
? Calculate the mean and standard
deviation from this sample.
Ans,Mean = 0.0736%
Standard Deviation = 0.0684%
? 2002 The Wadsworth Group
Problem 3.54,continued
? Use Chebyshev’s Theorem to determine the
minimum percentage of observations that should
fall within k = 1.50 units of standard deviation
from the mean.
Ans:
At least 55.55% of the data values should fall within
k = 1.50 units of standard deviation from the mean.
(1 – 1
k 2
)?100 % ? (1 –
1
1, 50
2
) ?100 %
? (1 – 0, 4444 ) ?100 % ? 55, 55 %
? 2002 The Wadsworth Group
Problem 3.54,continued
? Do the sample results support
Chebyshev’s Theorem?
Ans,1.50 (s) = 0.1026%
mean + 1.50 (s) = 0.0736% + 0.1026%
= 0.1762%
mean – 1.50 (s) = 0.0736% – 0.1026%
= – 0.0290%
A total of 22/25 data values fall in this interval,or 88%
of the sample,Yes,the data support Chebyshev’s
Theorem.
? 2002 The Wadsworth Group
Problem 3.54,continued
? Calculate the coefficient of variation for
these data.
Ans:CV ? s
? ?100 % ?
0, 0684 %
0, 0736 %
?100 % ? 92, 9 %
? 2002 The Wadsworth Group
