COLLEGE OF NATURAL AND COMPUTATIONAL

SCIENCE

DEPARTMENT OF STATISTICS

BASIC STATISTICS MODULE

By Sisay Yohannes (MSc)

BU, BONGA

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 Table of Contents Page
CHAPTER 1 ................................................................................................................... 1
1. THE NATURE OF PROBABILITY AND STATISTICS .................................... 1
1.1 INTRODUCTION ................................................................................................. 1
1.2 Objectives .............................................................................................................. 1
1.3 Definition and classifications of statistics ............................................................... 1
1.3.1Definition......................................................................................................... 1
1.3.2 Classifications ................................................................................................. 2
1.4 Stages in Statistical Investigation ........................................................................... 2
1.5 Definitions of some terms ...................................................................................... 3
1.6 Types of Variables or Data .................................................................................... 3
1.7 Applications, Uses and Limitations of statistics ..................................................... 4
1.7.1 Applications of statistics ................................................................................. 4
1.7.2 Uses of statistics ............................................................................................. 4
1.7.3 Limitations of statistics ................................................................................... 4
1.8 Scales of measurement ........................................................................................... 5
1.8.1 Order .............................................................................................................. 5
1.8.2 Distance .......................................................................................................... 5
1.8.3 Fixed Zero ...................................................................................................... 6
1.8.4 SCALE TYPES .............................................................................................. 6
1.9. Introduction to Methods of Data Collection .......................................................... 8
Summary ......................................................................................................................... 9
Exercise 1...................................................................................................................... 10
CHAPTER 2 ............................................................................................................. 13
METHODS OF DATA COLLECTION AND PRESNTATION ................................ 13
2.1 Introduction ......................................................................................................... 13
2.2 Objectives ............................................................................................................ 13
2.3 Methods of Data Presentation .............................................................................. 13
2.3.1Categorical frequency Distribution ................................................................. 14
2.3.2Ungrouped frequency Distribution: ................................................................ 15
2.2.3 Grouped frequency Distribution: ................................................................... 17
2.4 Diagrammatic and Graphic presentation of data ................................................... 21
2.3.1Diagrammatic presentation of data ................................................................. 21
2.3.2 Graphical Presentation of data ....................................................................... 26
Summary ....................................................................................................................... 28

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 Exercise 2...................................................................................................................... 29
CHAPTER 3 ............................................................................................................. 31
3. MEASURES OF CENTERAL TENDENCY ......................................................... 31
3.1 Introduction ......................................................................................................... 31
3.2 Objectives ............................................................................................................ 31
3.3. The Summation Notation .................................................................................... 31
3.3.1 Properties of Summation ............................................................................... 33
3.4 Types of measures of central tendency ................................................................. 34
3.4.1 Mean............................................................................................................. 35
3.4.2The Mode ..................................................................................................... 46
3.4.3The Median.................................................................................................... 48
3.4.4 Quantiles ....................................................................................................... 52
Summary ....................................................................................................................... 60
Exercise- 3 .................................................................................................................... 61
CHAPTER 4 ................................................................................................................. 63
4. Measures of Dispersion (Variation) ........................................................................... 63
4.1 Introduction ......................................................................................................... 63
4.2 Objectives ............................................................................................................ 63
4.3 Absolute and Relative Measures of Dispersion .................................................... 63
4.4 Types of Measures of Dispersion ......................................................................... 63
4.4.1The Range (R) ............................................................................................... 64
4.4.2 Relative Range (RR) ..................................................................................... 65
4.4.3 The Quartile Deviation (Semi-inter quartile range) ........................................ 65
4.4.4 Coefficient of Quartile Deviation (C.Q.D)..................................................... 66
4.4.5 The Mean Deviation (M.D): .......................................................................... 67
4.4.6 Coefficient of Mean Deviation (C.M.D) ........................................................ 70
4.4.7 The Variance................................................................................................. 71
Summary ....................................................................................................................... 85
Exercise 4...................................................................................................................... 85
CHAPTER 5 ................................................................................................................. 87
5. ELEMENTARY PROBABILITY ............................................................................. 87
5.1 Introduction ......................................................................................................... 87
5.2 Objectives ............................................................................................................ 87
5.3 Definitions of some probability terms .................................................................. 87
5.4 Counting Rules .................................................................................................... 89

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 5.4.1 The Multiplication Rule: ............................................................................... 90
5.4.2 Permutation................................................................................................... 91
5.4.3 Combination ................................................................................................. 93
5.5 Approaches to measuring Probability ................................................................... 95
5.5.1 The classical approach .................................................................................. 95
5.5.2 The Frequents Approach ............................................................................... 99
5.5.3 Axiomatic Approach: .................................................................................... 99
5.6 Conditional probability and Independency ......................................................... 100
5.6.1 Conditional probability of an event ............................................................. 101
5.6.2 Probability of Independent Events ............................................................... 102
Summary ..................................................................................................................... 103
CHAPTER 6 ............................................................................................................... 105
6. RANDOM VARIABLES AND PROBABILITY DISTRIBUTIONS....................... 105
6.1 Introduction ....................................................................................................... 105
6.2 Objectives .......................................................................................................... 105
6.3 Discrete random variable: .................................................................................. 106
6.4 Continuous random variable .............................................................................. 106
6.5 Properties of Probability Distribution: ................................................................ 107
6.6Introduction to expectation ................................................................................. 108
6.7 Mean and Variance of a random variable ........................................................... 110
6.8 Common Discrete Probability Distributions ....................................................... 111
6.8.1 Binomial Distribution ................................................................................. 111
6.8.2Poisson Distribution ..................................................................................... 115
6.9 Common Continuous Probability Distributions .................................................. 117
6.9.1 Normal Distribution .................................................................................... 117
6.9.2 Properties of the Standard Normal Distribution: .......................................... 118
Summary ..................................................................................................................... 124
Exercise 6.................................................................................................................... 125
CHAPTER 7 ............................................................................................................... 128
7. SAMPLING AND SAMPLING DISTRIBUTION .................................................. 128
7.1 Introduction ....................................................................................................... 128
7.2 Objectives .......................................................................................................... 128
7.2Errors in sample survey ...................................................................................... 129
7.3 Random Sampling or probability sampling. ....................................................... 129
7.3.1Simple Random Sampling: .......................................................................... 129

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 7.3.2Stratified Random Sampling: ....................................................................... 130
7.3.3Cluster Sampling ......................................................................................... 130
7.3.4 Systematic Sampling: ................................................................................. 130
7.4 Non Random Sampling or non-probability sampling. ......................................... 131
7.4.1 Judgment Sampling ..................................................................................... 131
7.4.2 Convenience Sampling................................................................................ 131
7.4.3 Quota Sampling .......................................................................................... 131
7.5 Sampling Distribution of the sample mean ......................................................... 132
7.6 Steps for the construction of Sampling Distribution of the mean ........................ 132
7.7 Central Limit Theorem ...................................................................................... 135
Summary ..................................................................................................................... 135
Exercises 7 .................................................................................................................. 136
CHAPTER 8 ............................................................................................................... 138
8. ESTIMATION AND HYPOTHESIS TESTING...................................................... 138
8.1 Introduction ....................................................................................................... 138
8.2 Objectives .......................................................................................................... 139
8.3 Statistical Estimation ......................................................................................... 139
8.3.1Point Estimation........................................................................................... 140
8.3.2 Interval estimation ...................................................................................... 140
8.4Point and Interval estimation of the population mean: µ ...................................... 141
8.4.1 Point Estimation .......................................................................................... 141
8.5 Hypothesis Testing ............................................................................................ 145
8.5.1 Null hypothesis: .......................................................................................... 145
8.5.2Alternative hypothesis:................................................................................. 145
8.6 Types and size of errors: .................................................................................... 145
8.6.1 General steps in hypothesis testing: ............................................................. 146
8.7 Hypothesis testing about the population means: ................................................. 146
8.8 Test of Association ............................................................................................ 151
8.9 Decision Rule .................................................................................................... 153
Summary ..................................................................................................................... 157
Exercise 8.................................................................................................................... 159
CHAPTER 9 ............................................................................................................... 162
9. SIMPLE LINEAR REGRESSION AND CORRELATION ..................................... 162
9.1 Introduction ....................................................................................................... 162
9.2 Objectives .......................................................................................................... 162

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 9.3 Simple Correlation ............................................................................................. 162
Steps........................................................................................................................ 166
9.4 Simple Linear Regression .................................................................................. 168
Summary ..................................................................................................................... 175
Exercise 9.................................................................................................................... 176
ANSWER FOR SELECTED EXERCISE ................................................................... 177
References ................................................................................................................... 183
Appendix: Tables ........................................................................................................ 184
A. The Standard Normal Distribution Table............................................................. 184
B. The Student‟s t-distribution Table ....................................................................... 185
C. The Chi-Square distribution Table ...................................................................... 186

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 CHAPTER 1
1. THE NATURE OF PROBABILITY AND STATISTICS

1.1 INTRODUCTION
The first unit of this module introduces you the concept of statistics and methods of data
collection. You may be familiar with probability and statistics through radio, television,
newspapers, and magazines. The word statistics is derived from the Latin word status
which means a political state or government. It was originally applied in connection
with kings and monarchs collecting data on their citizenry which pertained to state
wealth, taxes collected population and so on.

1.2 Objectives
After completing this chapter, Student should be able to

Demonstrate knowledge of statistical terms.

Differentiate between the two branches of statistics.
Identify types of data.
Identify the measurement level for each variable.
Identify the four basic sampling techniques.
Explain the difference between an observational and an experimental study.
Explain how statistics can be used and misused.
1.3 Definition and classifications of statistics
1.3.1Definition
What is statistics?

We can define statistics in two ways.

1. Plural sense (lay man definition).

It is an aggregate or collection of numerical facts.

2. Singular sense (formal definition)

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 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.

1.3.2 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.
1.4 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.
Activity: 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
3. Presentation of the data: The process of re-organization, classification, compilation,
and summarization of data to present it in a meaningful form.

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 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.
1.5 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. An example is all of the students in BHU those who take stat 2011 course.
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.
1.6 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: 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).

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 1.7 Applications, Uses and Limitations of statistics
1.7.1 Applications of statistics
Statistics can be applied in any field of study which seeks quantitative evidence. The
applications areas of statistics are:

 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.
1.7.2 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 presenting facts in a definite and precise form.

2. Reducing data.
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.
1.7.3 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.

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 1.8 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.
1.8.1 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".
The property of ORDER exists when for all i, j if Oi > Oj, then M(Oi) > M(Oj).
1.8.2 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 where it falls -immediately ahead or a mile downs the road.

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 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: O i, 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(O i) - 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 ).
1.8.3 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 O 0 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.
1.8.4 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. Each possessed different properties of measurement systems.
[Link] Nominal Scales
Nominal scales are measurement systems that possess none of the three properties stated
above. In nominal scales:
 The level of measurement which classifies data into mutually exclusive, all
inclusive categories in which no order or ranking can be imposed on the data.
 There is no arithmetic and relational operation can be applied.
Examples:
o Political party preference (Republican, Democratic, or Other,)
o Sex (Male or Female.)
o Marital status(married, single, widow, divorce)
o Country code
o Regional differentiation of Ethiopia.

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 [Link] 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. In ordinal scales:
 The level of measurement which classifies data into categories that can be ranked
and 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.
[Link] Interval Scales
Interval scales are measurement systems that possess the properties of Order and
distance, but not the property of fixed zero. In Interval scales:
 The 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.
Examples:

o IQ
o Temperature in Fo.

[Link] Ratio Scales

Ratio scales are measurement systems that possess 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. In Ratio scales:
 The level of measurement which classifies data that can be ranked and differences
are meaningful, and there is a true zero. True ratios exist between the different
units of measure.

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  All arithmetic and relational operations are applicable.
Examples:
o Weight
o Height
o Number of students
o Age
1.9. Introduction to Methods of Data Collection
What are the sources of data you know?

There are two sources of data:

1. Primary Data
 Data measured or collected 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: are data gathered or compiled from published and unpublished
sources or files.
 When our source is secondary data check:

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  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.

Summary
• The two major areas of statistics are descriptive and inferential. Descriptive statistics
includes the collection, organization, summarization, and presentation of data. Inferential
statistics includes making inferences from samples to populations, estimations and
hypothesis testing, determining relationships, and making predictions. Inferential
statistics is based on probability theory.

• Data can be classified as qualitative or quantitative. Quantitative data can be either

discrete or continuous, depending on the values they can assume. Data can also be
measured by various scales. The four basic levels of measurement are nominal, ordinal,
interval, and ratio.

• Since in most cases the populations under study are large, statisticians use subgroups
called samples to get the necessary data for their studies. There are four basic methods
used to obtain samples: random, systematic, stratified, and cluster.

• There are two basic types of statistical studies: observational studies and experimental
studies. When conducting observational studies, researchers observe what is happening or
what has happened and then draw conclusions based on these observations. They do not
attempt to manipulate the variables in any way.

• When conducting an experimental study, researchers manipulate one or more of the

independent or explanatory variables and see how this manipulation influences the
dependent or outcome variable.

• Finally, the applications of statistics are many and varied. People encounter them in
everyday life, such as in reading newspapers or magazines, listening to the radio, or
watching television. Since statistics is used in almost every field of endeavor, the

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 educated individual should be knowledgeable about the vocabulary, concepts, and
procedures of statistics. Also, everyone should be aware that statistics can be misused.

Exercise 1
1. Define the following terms.

a. Statistics.

b. Descriptive statistics

c. Qualitative variable

d. Nominal scale

e. Sample survey

2. To assess the opinion of students at the Bule Hora University about Cafeteria

Safety, the Ethiopian television reporter interviews 20 students he meets walking on the
campus late at night that are willing to give their opinion.

I. What is the sample here?

II. What is the population? Why?

III. Should you trust the results of this survey? Why?

IV. As a statistician comment the ETV reporter.

3. Ethiopian Television agency wants to know the proportion of TV owners in Addis

Ababa who watch the agencies new program at least once a week. The station asked a
group of 1000 TV owners in Addis Ababa if they watch the program at least once a week.
a. Identify the individuals in the study.

b. Identify the variable.

c. Do the data comprise a sample? If so, what is the underlying population?

d. Is the variable quantitative or qualitative?

e. Identify a quantitative variable that might of interest.

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 4. Suppose the Bule Hora University Agriculture faculty wishes to conduct a study of
pineapples in an experimental field.

a. What are the individuals in the study?

b. What are some possible quantitative variables of interest?

c. What are some possible qualitative variables of interest?

5. Identify the misuse of statistics in the following cases.

The report of head of the minister about the American Soldiers in Iraq terrorist attack
mission dismissed terrorists 30% at first campaign, 60% at second campaign and 59% at
third campaign.

b. Assume that in your class there are 50 students. Take their CGPA for all 50 students
and analysis mean CGPA; that is assumed 3.00.

6. State the level of measurement for each of the following:

a. Individuals may be classified according to socio-economic as low, medium & high.

b. Dates of the week Monday, Tuesday, Friday

c. The senator‟s name is Sam Wilson.

d. Of 1100 voters in Senator‟s district: 400 strongly favor his bill; 300 favor; 200 neutral;
150 do not favor, and 50 strongly do not favor his bill.
e. Patients may be characterized as unimproved, improved & much improved.
f. The height of the men in Bule Hora University.
g. Your score on an individual intelligence test as a measure of your intelligence.
7. 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.
a. Your checking account number as a name for your account.
b. Your checking account balance as a measure of the amount of money you have in that
account.

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 c. The order in which you were eliminated in a spelling bee as a measure of your
spelling ability.
d. Your score on the first statistics test as a measure of your knowledge of statistics.
e. Your score on an individual intelligence test as a measure of your intelligence.
f. The distance around your forehead measured with a tape measure as a measure of
your intelligence.
g. 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.
h. Times for swimmers to complete a 50-meter race
i. Months of the year September, October…
j. Socioeconomic status of a family when classified as low, middle and upper classes.
k. Blood type of individuals, A, B, AB and O.
l. Pollen counts provided as numbers between 1 and 10 where 1 implies there is almost
m. No pollen and 10 that it is rampant, but for which the values do not represent an
actual counts of grains of pollen.
n. Regions numbers of Ethiopia (1, 2, 3 etc.)
o. The number of students in a college;
p. The net wages of a group of workers;
q. The height of the men in the same town;

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 CHAPTER 2
METHODS OF DATA COLLECTION AND PRESNTATION
2.1 Introduction
The second Chapter of this module introduces the methods of data collection and
presentation. This unit will deal how to collect and present the data you have
collected so that they can be of use. Thus the collected data also known as raw data are
always in an unorganized form and need to be organized and presented in a
meaningful and readily comprehensible form in order to facilitate further statistical
analysis.

2.2 Objectives
At the end of this chapter students will be able to:

• Arrange raw data in an array and then classified data to construct a frequency table and
a cumulative frequency table.

• To organize data using frequency distribution.

• To present data using suitable graphs or diagrams.

2.3 Methods of Data Presentation

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.
Activity: Dear students think of various ways of presenting a frequency
distribution graphically for 5 minutes.

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 Frequency distribution: is the organization of raw data in table form using classes and
frequencies. There are three basic types of frequency distributions. These are:
 Categorical frequency distribution
 Ungrouped frequency distribution
 Grouped frequency distribution
There are specific procedures for constructing each type.
2.3.1Categorical frequency Distribution
Categorical frequency Distribution is 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(1) Tally(2) Frequency(3) Percent(4)

M
S
D
W

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;

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 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 the entire steps one can construct the
following frequency distribution.

Class(1) Tally(2) Freque Percent (4)

ncy (3)
M 5 20
////
S //// // 7 28
D //// // 7 28
W //// 6 24

2.3.2Ungrouped frequency Distribution:

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. It 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

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Basic Statistics, BU, CNSc, 2015
 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.

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.

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Basic Statistics, BU, CNSc, 2015
 2.2.3 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.
 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.

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Basic Statistics, BU, CNSc, 2015
  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.

[Link] 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.

[Link] 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
R
up, not off. w  .
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.
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Basic Statistics, BU, CNSc, 2015
 8. Tally the data.
9. Find the frequencies.
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
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Basic Statistics, BU, CNSc, 2015
  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.
Step 11: Find relative frequency or/and relative cumulative frequency.
The complete frequency distribution follows:

Class Class boundary Class Tally Freq. Cf (less Cf (more rf. rcf (less
limit Mark than than 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

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 2.4 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.

2.3.1Diagrammatic presentation of data

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

[Link] 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  * 100
thewholequantity
Example: Draw a suitable diagram to represent the following population in a town.
Men Women Girls Boys
2500 2000 4000 1500
Solution:
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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Basic Statistics, BU, CNSc, 2015
 Class Frequency Percent Degree
Men 2500 25 90
Women 2000 20 72
Girls 4000 40 144
Boys 1500 15 54

Pie-Chart
Class
C ategory
Boy s
Men
15.0%
Women
Girls

40.0%

20.0%

25.0%

[Link] Pictogram
In this 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 2.5

The following table shows the orange production in a plantation from production year
1990-1993. Represent the data by using a pictogram.

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Basic Statistics, BU, CNSc, 2015
 Solution

Table 2.4: Orange productions from 1990 to 1993

Production year 1990 1991 1992 1993

Amount (in kg) 3000 3850 3500 5000

Activity
Draw a pictogram to represent the following population of a town.
Year 1989 1990 1991 1992
Population 2000 3000 5000 7000

2.3.1.3Bar 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.
i. Simple Bar Chart

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Basic Statistics, BU, CNSc, 2015
 Simple Bar Charts are used to display data on one variable. 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.

Product Sales($) Sales($) Sales($)

In 1957 In 1958 In 1959

A 12 14 18

B 24 21 18

C 24 35 54

Solutions:

Sales by product in 1957

30
25
Sales in $

20
15
10
5
0
A B C
product

ii. 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 colors or designs are used for identifications.

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Basic Statistics, BU, CNSc, 2015
Example:

Draw a component bar chart to represent the sales by product from 1957 to 1959.

Solution:

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

iii. 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.

Solution:

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Basic Statistics, BU, CNSc, 2015
 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

2.3.2 Graphical Presentation of data

The histogram, frequency polygon and cumulative frequency graph or ogives 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.
[Link] Histogram
A graph which displays the data by using vertical bars of various height 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 *).

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Basic Statistics, BU, CNSc, 2015
 [Link] Frequency Polygon:
It is 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 *).

Solution:

4
Value Frequency

0
2. 5 8. 5 14.5 20.5 26.5 32.5 38.5 44.5

Class Mid points

[Link] 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.

Activity

Draw an ogive curve(less than type) for the above Example.

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Basic Statistics, BU, CNSc, 2015
 Summary
• When data are collected, the values are called raw data. Since very little knowledge can
be obtained from raw data, they must be organized in some meaningful way. A frequency
distribution using classes is the common method that is used.

• Once a frequency distribution is constructed, graphs can be drawn to give a visual

representation of the data. The most commonly used graphs in statistics are the
histogram, frequency polygon, and ogive.

• Finally, Other graphs such as the bar chart, pictogram and pie chart can also be used.
Some of these graphs are frequently seen in newspapers, magazines, and various
statistical reports.

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Basic Statistics, BU, CNSc, 2015
 Exercise 2
1. Define cumulative frequency distribution? Point out its special advantages and uses.

2. Mention the various ways of presenting a frequency distribution graphically.

3. State the different types of bar diagrams. What are their merits and demerits?

4. A social worker collected the following data on marital status for 25 persons.

(M=married, S=single, W=widowed, D=divorced). Construct the frequency distribution

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

5. A demographer is interested in the number of children a family may have, took sample
of 30 families and obtained the following observations.

Number of children in a sample of 30 families

4 2 4 3 2 8

3 4 4 2 2 8

5 3 4 5 4 5

4 3 5 2 7 3

3 6 7 3 8 4

Construct a frequency distribution for this data.

6. The following data are on age of 20 women who attended health education in a certain
hospital. Construct frequency distribution.

30, 25, 23, 41, 39, 27, 41, 24, 32, 29, 35, 31, 36, 33, 36, 42, 35, 37, 41, and 29

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Basic Statistics, BU, CNSc, 2015
 7. 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.

8. Draw (a) histogram (b) frequency polygon (c) Ogive for the following

frequency distribution of grades in a final examination in introduction to statistics.

Class 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80-89

Frequency 6 12 20 14 12 8 6 2

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 CHAPTER 3
3. MEASURES OF CENTERAL TENDENCY
3.1 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. A typical
average should possess 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.
3.2 Objectives
At the end of this Chapter you should be able to:

 Summarize data, using measures of central tendency, such as the mean, median,
mode, and midrange.
 Describe data, using measures of variation, such as the range, variance, and standard
deviation.
 Identify the position of a data value in a data set, using various measures of position,
such as percentiles, deciles, and quartiles.
 Use the techniques of exploratory data analysis
3.3. 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 X 1+X2+X3+...+XN is used
in a formula to compute a statistic. It is tedious to write an expression like this very

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Basic Statistics, BU, CNSc, 2015
 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 X1+X2+X3+...+XN

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:

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.

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Basic Statistics, BU, CNSc, 2015
 For example:

3.3.1 Properties of Summation

n
1.  k  nk
i 1
where k is any constant

n n
2.  kX i  k X i where k is any constant
i 1 i 1

n n
3.  (a  bX
i 1
i )  na  b X i
i 1
where a and b are any constant

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

The sum of the product of the two variables could be written:

Example: considering the following data and 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

5
d) (X
i 1
i  Yi )

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Basic Statistics, BU, CNSc, 2015
 5
e) (X
i 1
i  Yi )

5
f) X Y
i 1
i i

X
2
g) 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

X  5 2  7 2  7 2  6 2  8 2  223
2
g) i
i 1

5 5
h) ( X i )( Yi )  33 * 36  1188
i 1 i 1

3.4 Types of measures of central tendency

There are several different measures of central tendency. Each has its advantage and
disadvantage.

 The Mean (Arithmetic, Geometric and Harmonic)

 The Mode

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  The Median
 Quantiles (Quartiles, Deciles and Percentiles)
The choice of these averages depends up on which best fit the property under discussion.

3.4.1 Mean
i. Arithmetic Mean

It is defined as the sum of the magnitude of the items divided by the number of items.

a. Arithmetic Mean for ungrouped Data

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

If X1 occurs f1 times

If X2occurs f2 times

If Xn occurs fn times

fX i i
Then the mean will be X i 1
k , where k is the number of classes and
f
i 1
i

f
i 1
i n

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Basic Statistics, BU, CNSc, 2015
 Example: Obtain the mean of the numbers 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

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

b. Arithmetic Mean for Grouped Data

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

f i Xi
X  i 1
k

f i 1
i

Where Xi = the class mark of the ith class and fi = the frequency of the ith class

Example: calculate the mean for the following age distribution.

Class Frequency

6- 10 35

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Basic Statistics, BU, CNSc, 2015
 11- 15 23

16- 20 15

21- 25 12

26- 30 9

31- 35 6

Solutions:

Step 1: First find the class marks

Step 2: Find the product of frequency and class marks

Step 3: 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

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

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Basic Statistics, BU, CNSc, 2015
 Activity

[Link] of 75 students are summarized in the following frequency distribution:

Marks No. of students

40-44 7

45-49 10

50-54 22

55-59 f4

60-64 f5

65-69 6

70-74 3

If 20% of the students have marks between 55 and 59

i. Find the missing frequencies f4 and f5.

ii. Find the mean.
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. For raw data suppose we have used the
following coding system.

di  X i  A
 X i  di  A
n n

 Xi  (d i  A)
X  i 1
 i 1

n n
n

d i
 X  A i 1

n
 X  Ad

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Basic Statistics, BU, CNSc, 2015
 Where A is an assumed mean and d is the mean of the coded data. If the data are
expressed in terms of ungrouped frequency distribution,

di  X i  A
 X i  di  A
k k

 fi X i  f (d i i  A)
X  i 1
 i 1

n n
k

fd i i
 X  A i 1

n
 X  Ad

In both cases the true mean is the assumed mean plus the average of the deviations from
the assumed mean. Suppose the data is given in the shape of continuous frequency
distribution with a constant class size of “w” then the following coding is appropriate.

X A
d  i
i w
 X  wd  A
i i
k k
 f X  f ( wd  A)
i i i i
X  i 1  i 1
n n
k
 f wd
i i
 X  A i 1
n
 X  A  wd

Where: Xi is the original class mark for the ith class.

di is the transformed class mark for the ith class.

A is an assumed mean usually the mean of the class marks (i =1, 2… k).

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Basic Statistics, BU, CNSc, 2015
 Example:

1. Suppose the deviations of the observations from an assumed mean of 7 are: 1, -1,
-2, -2, 0, -3, -2, 2, 0, -3.
a) Find the true mean
b) Find the original observation.
Solutions:

10
A  7,  d i  10
i 1

 10
a)  d   1
10
 X  A  d  7 1  6
The true mean is 6.

b) Using Xi=A+di we obtain the following original observations: 8, 6, 5, 5, 7, 4, 5,

9, 7, 4.
c. 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 n 2 observations

If X k is the mean of n k observations

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Basic Statistics, BU, CNSc, 2015
 Then the mean of all the observation in all groups often called the combined mean is
given by:

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

Solution:

Females Males
X 1  60 X 2  72
n1  30 n2  70

X n  X 2 n2 X n i i
Xc  1 1  i 1
n1  n2 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

Where n is total number of observations.

Example: An average weight of 10 students was calculated to be [Link] it was

discovered that one weight was misread as 40 instead of 80 k.g. Calculate the
correct average weight.

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Basic Statistics, BU, CNSc, 2015
 Solution:

(CorrectValue  WrongValue)
CorrectMean  WrongMean 
n
(80  40)
CorrectMean  65   65  4  69k.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

Solution:

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?
Solution:

a).NewMean  OldMean  10  500  10  510

b).NewMean  5 * OldMean  5 * 500  2500

d. Merits and Demerits of Arithmetic Mean

Merits:

 It is rigidly defined.
 It is based on all observation.

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Basic Statistics, BU, CNSc, 2015
  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.
ii 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:

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 [Link] the students weighted arithmetic
mean if weights 1, 2, 1, 3, 3 respectively are allotted to the subjects.

Solution:

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Basic Statistics, BU, CNSc, 2015
 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

iii 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 X1 * X2 * ... * Xn

 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.

Solution:

G.M  n X1 * X2 * ... * Xn  3 2 * 4 * 8  3 64  4

Remark: The Geometric Mean is useful and appropriate for finding averages of
ratios.

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

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

W i
H.M  n
i 1
, This is called Weighted Harmonic Mean.
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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 2
H.M   12km/hr
1 1

10 15

3.4.2The Mode

[Link] Mode for ungrouped data

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 .

[Link] 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:

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Basic Statistics, BU, CNSc, 2015
 Xˆ  the mod e of the distribution
w  the size of the mod al class
 1  f mo  f 1
 2  f mo  f 2
f mo  frequencyof the mod al class
f 1  frequencyof the class preceedingthe mod al class
f 2  frequencyof the class following the mod al class

Note: The modal class is a class with the highest frequency.

Example: The 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

55-65 5

65-75 3

Solution:

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Basic Statistics, BU, CNSc, 2015
 45  55 is the mod al class,sin ce it is a class with thehighestfrequency.
L mo  45
w  10
 1  f mo  f 1  2
 2  f mo  f 2  26
f mo  31
f 1  29
f2  5

 Xˆ  45  10
2 

 2  26 
 45.71

[Link] 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.

3.4.3The 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

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 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]. Median is denoted by X~ .

[Link] Median for ungrouped data
 X ( n1) 2  ,If n is odd.
~ 
X   1 (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, 8, 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 
  X [ 3]  X [ 4 ] 
1
2
 5  6   5.5
1
2

b) Order the data :1, 2, 3, 5, 8

Here n=5

~ X
X n 1
[ ]
2
 X [3]
3

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Basic Statistics, BU, CNSc, 2015
 [Link] 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 cumulativefrequency(less than type) preceeding the 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

n
than or equal to .
2
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

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Basic Statistics, BU, CNSc, 2015
 Solution:

Step 1: First find the less than cumulative frequency.

Step 2: Identify the median class.

Step 3: Find median using formula.

Class Frequency [Link](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

n 75
  37.5
2 2
39 is the first cumulative frequencyto be greater thanor equalto 37.5
 50  54 is the median class.

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Basic Statistics, BU, CNSc, 2015
 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

[Link] 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.
 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.
3.4.4 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.

[Link] 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 Q 3
has 75% items whose values are less than or equal to it.

iN
To find Qi (i=1, 2, 3) we count of the classes beginning from the lowest class.
4

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Basic Statistics, BU, CNSc, 2015
 For grouped data we have the following formula

Q L Q  w ( iN  c) ,i  1,2,3
i i fQ 4
i
Where :
L Q  lower class boundary of thequartile class.
i
w  thesize of thequartile class
N  total numberof observations.
c  thecumulativefrequency(lessthantype) preceedingthequartile class.
f Q  thefrequency of thequartile class.
i

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
[Link] 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 decile respectively.

iN
- To find Di (i=1, 2,..9) we count of the classes beginning from the lowest class.
10
- For grouped data: we have the following formula
w iN
Di  L Di  (  c ) , i  1,2,...,9
f Di 10
Where :
L Di  lower class boundaryof the decile class.
w  the size of the decileclass
N  total number of observations.
c  the cumulativefrequency(less than type) preceedingthe decile class.
f Di  thefrequency of the decile class.

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Basic Statistics, BU, CNSc, 2015
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
[Link] 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 find Pi (i=1,

iN
2,..99) we count of the classes beginning from the lowest class. For grouped data:
100
we have the following formula:

w iN
Pi  L Pi  (  c) , i  1,2,...,99
f Pi 100
Where :
L Pi  lower class boundary of the percentile class.
w  the size of the percentile class
N  total number of observations.
c  the cumulativefrequency( less than type) preceedingthe percentile class.
f Pi  thefrequency of the percentileclass.

Remark:

The percentile class (class containing Pi )is the class with the smallest cumulative

iN
frequency (less than type) greater than or equal to .
100

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Basic Statistics, BU, CNSc, 2015
 Example: Considering the following distribution:

Values Frequency

140- 150 17

150- 160 29

160- 170 42

170- 180 72

180- 190 84

190- 200 107

200- 210 49

210- 220 34

220- 230 31

230- 240 16

240- 250 12

Calculate:

a) All quartiles.
b) The 7th decile.
c) The 90th percentile.

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Basic Statistics, BU, CNSc, 2015
 Solutions:

Step 1: First find the less than cumulative frequency.

Step 2: Use the formula to calculate the required quantile.

Values Frequency [Link](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.

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Basic Statistics, BU, CNSc, 2015
 N
 123.25
4
 170  180 is the class containingthe first quartile.

LQ  170 ,
1
w 10
N  493 , c  88 , f Q  72
1

w N
 Q1  LQ1  (  c)
fQ 41

10
 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 containingthe 2 nd quartile.

LQ  190 ,
2
w 10
N  493 , c  244 , f Q 107
2

w 2* N
 Q2  LQ  (  c)
2
fQ2
4
10
 170 (246.5  244)
72
 190.23

iii. Q3
Determine the class containing the third quartile.

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Basic Statistics, BU, CNSc, 2015
 3* N
 369.75
4
 200  210 is the class containingthe third quartile.

LQ  200 ,
3
w 10
N  493 , c  351 , f Q  49
3

w 3* N
 Q3  LQ 3  (  c)
fQ 4
3

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 containingthe seventh decile.

LD  190 ,
7
w 10
N  493 , c  244 , f D 107
7

w 7* N
 D7  LD  (  c)
7
f D 10
7

10
 190  (345.1  244)
107
 199.45

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Basic Statistics, BU, CNSc, 2015
 c) P90

Determine the class containing the 90th percentile.=

90 * N
 443.7
100
 220  230 is the class containingthe90th percentile.

LP  220 ,
90
w 10
N  493 , c  434 , f P  3107
90

w 90 * N
 P90  LP  (  c)
90
f P 100
90

10
 220  (443.7  434)
31
 223.13

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Basic Statistics, BU, CNSc, 2015
 Summary
• This chapter explains the basic ways to summarize data. These include measures of
central tendency. They are the mean, median, mode, and midrange. The weighted mean
can also be used.

• To summarize the variation of data, statisticians use measures of variation or dispersion.

The three most common measures of variation are the range, variance, and standard
deviation. The coefficient of variation can be used to compare the variation of two data
sets. The data values are distributed according to Chebyshev‟s theorem on the empirical
rule.

• There are several measures of the position of data values in the set. There are standard
scores, percentiles, quartiles, and deciles. Sometimes a data set contains an extremely
high or extremely low data value, called an outlier.

• Other methods can be used to describe a data set.

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Basic Statistics, BU, CNSc, 2015
 Exercise- 3
1. What is meant by central tendency? Briefly describe the methods of measurement
central tendency. Point out the merits and limitations of each method.

2. Why the arithmetic mean is most commonly used measure of a central value?

3. Compare the arithmetic mean, median, mode, geometric mean as to the manner in
which they are affected by extreme values.

4. Define a weighted average. How does it differ from an un weighted average?

5. Discuss briefly the use of weighted average in statistics, describing the cases in which
the weighted average is better than un weighted average.

Calculate the median, quartiles, 6th deciles, and 75th percentile from the following data.
Show that the value of 75thpercentile is the same as that of Q3.

Marks 80 70 60 50 40 30 20 10

No of Students 100 90 80 60 32 20 13 5

6. A quality control inspector at the lap top computer assembly plant found the
following number of defective computers on 20 consecutive working days.

10 14 10 12 18 19 25 22 17

28 13 17 18 14 18 21 15 16

Compute the mean, median and mode

7. Calculate Q1, Q3, D4, D6, P40 and P80 for the following tables

Class 10-19 20-29 30-39 40-49 50-59 60-69 70-79

Frequency 4 6 10 15 12 7 6

8. The following are the scores for the midterm exam given to 13 students in
statistics.

42, 42, 68, 80, 75, 54, 62, 89, 72, 80, 80, 75, 65

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Basic Statistics, BU, CNSc, 2015
 Calculate the mean, median and mode.

9. The monthly incomes of 10 families in Dollars, in certain locality are given

below.

Family A B C D E F G H I J

Incomes 85 70 10 75 500 8 42 250 40 36

10. from the table given below find out the Median and Quartiles:

Size 11-15 16-20 21-25 26-30 31-35 36-40 41-45 46-50

Frequency 7 10 13 26 35 22 11 5

11. If arithmetic mean of two items is 5 and G.M is 4, find their H.M. and also the
quantities.

12. Consider the following distribution, and then determine modal value of the
distribution.

X 1 2 3 4 5 6 7 8 9
F 3 1 18 25 40 30 22 10 6
13. The following frequency distribution is the distribution of profit earned by 15
companies during 2003 – 2004.

Class interval 0 – 4 5 – 9 10-14 15-19 20-24 25-29 30-34 35-39

Frequency 2 5 7 13 21 16 8 3
Compute, median and verify that it is equal to Q2, 72 th percentile, second deciles for the
above data

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Basic Statistics, BU, CNSc, 2015
 CHAPTER 4
4. Measures of Dispersion (Variation)
4.1 Introduction
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.

4.2 Objectives
At the end of this Chapter student should be able to:

 Judge the reliability of measures of central tendency

 Control variability itself.
 Compare two or more groups of numbers in terms of their variability.
 Make further statistical analysis.
4.3 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.

4.4 Types of Measures of Dispersion

Various measures of dispersions are in use. The most commonly used measures of
dispersions are:

 Range and relative range

 Quartile deviation and coefficient of Quartile deviation

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Basic Statistics, BU, CNSc, 2015
  Mean deviation and coefficient of Mean deviation
 Standard deviation and coefficient of variation.

4.4.1The Range (R)

The range is the largest score minus the smallest score. It is a quick and unclean 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  smallestobservation

[Link] 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 upperclasslim it of the last class.

UCL1 is lower class lim it of the first class.

This is sometimes expressed as:

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

X1 is classmark of the first class.

[Link] Merits and Demerits of range

Merits:

 It is rigidly defined.
 It is easy to calculate and simple to understand.
Demerits:

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Basic Statistics, BU, CNSc, 2015
  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.

4.4.2 Relative Range (RR)
It is also sometimes called coefficient of range and given by:

LS R
RR  
LS LS

Example:

1. 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
Activity

Find the relative range of the above two distribution.

4.4.3 The Quartile Deviation (Semi-inter quartile range)

It is denoted by Q.D. The inter quartile range is the difference between the third and the
first quartiles of a set of items and semi-inter quartile range is half of the inter quartile
range.

Q3  Q1
Q.D 
2

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 4.4.4 Coefficient of Quartile Deviation (C.Q.D)
(Q3  Q1 2 2 * Q.D Q3  Q1
C. Q.D   
(Q3  Q1 ) 2 Q3  Q1 Q3  Q1

It gives the average amount by which the two quartiles differ from the median.

Example: Compute Q.D and its coefficient for the following distribution.

Values Frequency

140- 149 17

150- 159 29

160- 169 42

170- 179 72

180- 189 84

190- 199 107

200- 209 49

210- 219 34

220- 229 31

230- 239 16

240- 249 12

Solution:

In the previous chapter we have obtained the values of all quartiles as:

Q1= 174.90, Q2= 190.23, Q3=203.83

Q3  Q1 203.83  174.90
 Q.D    14.47
2 2
2 * Q.D 2 *14.47
C.Q.D    0.076
Q3  Q1 203.83  174.90

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 Remark: Q.D or C.Q.D includes only the middle 50% of the observation.

4.4.5 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 ):

 Find the arithmetic mean, X

 Find the deviations of each reading from X .
 Find the arithmetic mean of the deviations, ignoring sign.
b) Mean Deviation about the median.
~
 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

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 ~
Steps to calculate M.D ( X ):

~
 Find the median, X
~
 Find the deviations of each reading from X .
 Find the arithmetic mean of the deviations, ignoring sign
c) Mean Deviation about the mode.

 Denoted by M.D( X̂ ) and given by

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
M .D ( Xˆ )  i 1
n

Steps to calculate M.D ( X̂ ):

 Find the mode, X̂

 Find the deviations of each reading from X̂ .
 Find the arithmetic mean of the deviations, ignoring sign.
Examples 1:

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

Xi  6 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
M .D( Xˆ )  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

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 65-69 6

70-74 3

Remark: Mean deviation about the mean is always minimum than mean deviation about
the median.

4.4.6 Coefficient of Mean Deviation (C.M.D)

M .D
C.M .D 
Average about which deviationsare taken

M .D( X )
 C.M .D( X ) 
X

~
~ M .D( X )
C.M .D( X )  ~
X

M .D( Xˆ )
C.M .D( Xˆ ) 
Xˆ

Example: calculate the C.M.D about the mean, median and mode for the data in example
1 above.

Solutions:

M .D
C.M .D 
Average about which deviationsare taken

M .D( X ) 1.4
 C.M .D( X )    0.233
X 6

~
~ M .D( X ) 1.4
C.M .D( X )  ~   0.255
X 5.5

ˆ ) 1.4
M .D( X
C.M .D( Xˆ )    0.28
ˆ
X 5

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 Activity

Identify the merits and demerits of Mean Deviation

4.4.7 The Variance

[Link] 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:

1
Population Varince   2   f i ( X i   ) 2 , i  1,2,.....k
N
[Link] 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
S2  i 1 , for raw data.
n 1
k

f X i  nX
2 2
i
S 2
 i 1
, frequency distribution.
n 1

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 [Link] 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     2

Sample standard deviation  s  S 2

The steps that are used to calculate the sample variance are:

Step 1: Find the arithmetic mean.

Step 1: Find the difference between each observation and the mean.

Step 1: Square these differences.

Step 1: Sum the squared differences.

Step 1: 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).

Example: 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.
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.
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 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 )

 Approximately 95.45% of the data values fall within two standard deviations of the
mean. i.e. with in ( X  2 S , X  2 S )

 Approximately 99.73% of the data values fall within three standard deviations of the
mean. i.e. with in ( X  3S , X  3S )

 Chebyshev's Theorem
For any data set ,no matter what the pattern of variation, the proportion of the values that
fall within k standard deviations of the mean or ( X  kS , X  kS ) will be at least
1 , where k is an number greater than 1. i.e. the proportion of items falling beyond
1
k2
k standard deviations of the mean is at most 1
k2

Example 1: Suppose a distribution has mean 50 and standard deviation 6. What percent
of the numbers are?

a) Between 38 and 62

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 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

 Applying the above theorem at least (1  1 ) *100%  75% of the numbers lie
k2
between 38 and 62.

b) Done in similarly way as „a‟.

c) It is just the complement of a) i.e. at most 1 *100%  25% of the numbers lie
k2
less than 32 or more than 62.
d) Done in similarly way as „c‟.

Activity

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.

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

a) X 1  k , X 2  k , .....X n  k will alsobe S

b) kX1 , kX 2 , .....kX n would be k S

c) a  kX1 , a  kX 2 , .....a  kX n would be k S

Activity: Verify each of the above relationship, considering k and a as constants.

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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 are 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

[Link] 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

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

Solutions:

Calculate coefficient of variation for both firms.

SA 10
[Link]  *100  *100  19.05%
XA 52.5

SB 11
[Link]  *100  *100  23.16%
XB 47.5

Since [Link] < [Link], in firm B there is greater variability in individual wages.

Activity

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)

[Link] 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 .


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 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

[Link] 6 5

Student A from section 1 scored 90 and student B from section 2 scored 95. Relatively
speaking who performed better?

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

Therefore, Student A performed better relative to his section because the score of student
A is a 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:

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 Value Group one Group two

Mean 10.4 min 11.9 min

[Link]. 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

S2 1.3
C.V2  *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  X 1 9.2  10.4
ZA    1
S1 1.2
X B  X 2 9.3  11.9
ZB    2
S2 1.3

Hence, 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.

[Link] Moments
If X is a variable that assume the values X1, X2,…..,Xn then

1. The rth moment is defined as:

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 X  X 2  ...  X n
r r r
X  1r
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)
It is 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:

'
It is Denoted by Mr 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:

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 k
 f i ( X i  A) r
Mr  i 1
'

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

i 1
Xr 
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
Mr  i 1
n
( 2  3) 3  (3  3) 3  (7  3) 3
 M3   21
'

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 [Link] 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. 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

Measures of Skewness are denoted by  3 and 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 ) Q3  Q1  2Q2
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 negativelyskewed .
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 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:

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?
Solution:

Use the Pearsonian coefficient of skewness

Mean  Mode 32  30.5

3    0.15
S tan dard deviation 10
 3  0  The distributi on 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.
Solution:

Given: ~ Required: Q1 , Q3
 3  0.5, X  Q2  11
Q1  Q3  28...........................(*)

(Q3  Q2 )  (Q2  Q1 ) Q  Q1  2Q2

3   3  0.5
Q3  Q1 Q3  Q1
Substituting the given values, one can obtainthe following
Q3  Q1  12...................................(**)

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 Solving (*) and (**) at the sametime we obtain the following values
Q1  8 and Q3  20
Some characteristics of annually family income distribution (in Birr) in two regions is as
follows:

Region Mean Mode 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.

Activity

1. For which region is the income more consistent?

2. For a moderately skewed frequency distribution, the mean is 10 and the median is
8.5. If the coefficient of variation is 20%, find the Pearsonian coefficient of skewness
and the probable mode of the distribution.
3. The sum of fifteen observations, whose mode is 8, was found to be 150 with
coefficient of variation of 20%
(a) Calculate the pearsonian coefficient of skewness and give appropriate
conclusion.
(b) Are smaller values more or less frequent than bigger values for this
distribution?
(c) If a constant k was added on each observation, what will be the new
pearsonian coefficient of skewness? Show your steps. What do you conclude
from this?
[Link] Kurtosis
Kurtosis is the degree of peakdness of a distribution, usally taken relative to a normal
distribution. A distribution having relatively high peak is called leptokurtic. If a curve

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 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.

Measures of kurtosis

The moment coefficient of kurtosis: is denoted by  4 and given as:

M4 M
4   44
M2
2

Where : M 4 is the fourth moment aboutthe mean.
M 2 is the sec ond moment aboutthe mean.
 is the populations tan dard deviation.

The peakdness depends on the value of  4 .

 If  4  3 then the curveis leptokurtic.

 If  4  3 then the curveis 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 give your interpretation.
Solutions:

M3  60
a) 3  32
  0.94  0
M2 16 3 2
 The distribution is negatively skewed .
b) 4 
M4

162
 0.6  3
2
M2 162

 The curveis platykurtic.

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 Activity

1. The median and the mode of a mesokurtic distribution are 32 and 34 respectively.
The 4th moment about the mean is 243. Compute the Pearsonian coefficient of
skewness and identify the type of skewness. Assume (n-1 = n).
2. If the standard deviation of a symmetric distribution is 10, what should be the value
of the fourth moment so that the distribution is mesokurtic?

Summary
• To summarize the variation of data, statisticians use measures of variation or dispersion.
The three most common measures of variation are the range, variance, and standard
deviation. The coefficient of variation can be used to compare the variation of two data
sets. The data values are distributed according to Chebyshev‟s theorem on the empirical
rule.

Exercise 4
1. The following data represents the price-earning (P/E) ratio of 50 stocks selected at
random from the stocks listed with New York stock exchange (NYSE), during a
given period of time. (The ratio has been rounded to the whole number.)

10 11 13 13 10 11 26 16 12 11

10 12 11 9 15 9 12 18 12 19

11 11 13 21 11 13 14 10 13 12

9 19 8 13 15 10 13 18 10 13

11 8 17 11 10 9 13 11 18 10

Compute: The mean, median, mode, range, inter-quartile range, variance, standard
deviation, coefficient of variation.

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 2. The sum of fifteen observations, whose mode is 8, was found to be 150 with
coefficient of variation of 20%

(a) Calculate the pearsonian coefficient of skewness and give appropriate conclusion.

(b) Are smaller values more or less frequent than bigger values for this
distribution?

(c) If a constant k was added on each observation, what will be the new pearsonian
coefficient of skewness? Show your steps. What do you conclude from this?

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

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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 Objectives
After completing this chapter, the student should be able to:

 Determine sample spaces and find the probability of an event, using classical
probability or empirical probability.
 Find the probability of compound events, using the addition rules.
 Find the probability of compound events, using the multiplication rules.
 Find the conditional probability of an event.
 Find the total number of outcomes in a sequence of events, using the fundamental
counting rule.
 Find the number of ways that r objects can be selected from n objects, using the
permutation rule.
 Find the number of ways that r objects can be selected from n objects without
regard to order, using the combination rule.
 Find the probability of an event, using the counting rules.
5.3 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

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 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 spaceor impossibleevent

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 is non-occurrence of A and is
'
denoted by A , or Ac , or A contains those points of the sample space which do not belong to an
event 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.
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}

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 b) S={(HH),(HT),(TH),(TT)}
c) S={t /t≥0}
 Sample space can be
 Countable ( finite or infinite)
 Uncountable.
5.4 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.

Example: A student goes to the nearest snack to have a breakfast. He can take tea, coffee, or
milk with bread, cake and sandwich. How many possibilities does he have?

Solution:

Tea

Bread

Cake

Sandwich

Coffee

Bread

Cake
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 Sandwitch

Milk

Bread

Cake

Sandwich
There are nine possibilities.

5.4.1 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: 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.
Solution:

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

5 5 5 5

There are four steps.

Step 1: Selecting the 1st digit, this can be made in 5 ways.

Step 2: Selecting the 2nd digit, this can be made in 5 ways.

Step 3: Selecting the 3rd digit, this can be made in 5 ways.

Step 4: Selecting the 4th digit, this can be made in 5 ways.

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  5 * 5 * 5 * 5  625 differentcards are possible.

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

5 4 3 2

There are four steps.

Step 1: Selecting the 1st digit, this can be made in 5 ways.

Step 2: Selecting the 2nd digit, this can be made in 4 ways.

Step 3: Selecting the 3rd digit, this can be made in 3 ways.

Step 4: Selecting the 4th digit, this can be made in 2 ways.

 5 * 4 * 3 * 2  120 differentcards are possible.

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

[Link] 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

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 alike k2 are alike ---- etc
is:

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 n!
n Pr 
k1!*k2 * ...* kn

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.

Here n  4, r  2
b) 4! 24
 There are 4 P2    12 permutations.
(4  2)! 2
Here n  10
Of which 2 are C , 2 are O, 2 are R ,1E ,1T ,1I ,1N
2.  K1  2, k 2  2, k3  2, k 4  k5  k6  k7  1
U sin g the 3rd rule of permutatio n , there are
10!
 453600 permutatio ns.
2!*2!*2!*1!*1!*1!*1!
Activity

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

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 ii. Only the statistics books must stand together
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?
5.4.3 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.

Solution:

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.

[Link] Combination Rule

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

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

 n n!
  
 r  (n  r )!*r!
Examples:

1. In how many ways a committee of 5 people is chosen out of 9 people?

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 Solution:

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.
Solution:

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

r 3

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 
  *    286 ways.
 0  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:

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  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  1 

Activity

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
a) There is no restriction
b) One particular Statistician should be included
c) Two particular Mathematicians cannot 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 done if
a) There is no restriction.
b) The dictionary is selected?
c) 2 novels and 1 book of poems are selected?
5.5 Approaches to measuring Probability
There are four different conceptual approaches to the study of probability theory. These
are:

 The classical approach.

 The frequentist approach.
 The axiomatic approach.
 The subjective approach.
5.5.1 The classical approach
This approach is used when:

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 - 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 favourable to the event A, then the probability that event A

occur denoted P(A) is defined as:

N A No. of outcomes favourableto A n( A)

P( A)   
N Total numberof outcomes n( S )

Example:

1. A fair die is tossed once. What is the probability of getting

1) Number 4?
2) An odd number?
3) An even number?
4) 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

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

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.

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  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 
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 
Activity

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?
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 b) 2 novels and 1 book of poems are selected?
Short coming of the classical approach:

This approach is not applicable when:

- The total number of outcomes is infinite.

- Outcomes are not equally likely.
5.5.2 The Frequents 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.

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

5.5.3 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.

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 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.
5.6 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 dependent events.

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

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

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 5.6.1 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?
Solution; Let A= the event that a research project will be well Planned

B= the event that a research project will be well Executed

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 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

Activity

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?

b. What is the probability that the second item is defective?
Note: for any two events A and B the following relation holds.


pB   pB A. p A  p B A' . p A'   
5.6.2 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
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 Summary
In this chapter, the basic concepts of probability are explained.

• There are four basic types of probability. They are classical, frequentist (Empirical),
axiomatic and subjective probability. Classical probability uses samples spaces. The
probability of any event is a number from 0 to 1. If an event cannot occur, the probability
is 0. If an event is certain, the probability is 1. The sum of the probability of all the events
in the sample space is 1. To find the probability of the complement of an event, subtract
the probability of the event from 1.

• Two events are mutually exclusive if they cannot occur at the same time; otherwise, the
events are not mutually exclusive. To find the probability of two mutually exclusive
events occurring, add the probability of each event. To find the probability of two events
when they are not mutually exclusive, add the possibilities of the individual events and
then subtract the probability that both events occur at the same time. These types of
probability problems can be solved by using the addition rules.

• Two events are independent if the occurrence of the first event does not change the
probability of the second event occurring. Otherwise, the events are dependent. To find
the probability of two independent events occurring, multiply the probabilities of each
event. To find the probability that two dependent events occur, multiply the probability
that the first event occurs by the probability that the second event occurs given that the
first event has already occurred. The complement of an event is found by selecting the
outcomes in the sample space that are not involved in the outcomes of the event.

These types of problems can be solved by using the multiplication rules and the
complementary event rules.

• Finally, when a large number of events can occur, the fundamental counting rule, the
permutation rule, and the combination rule can be used to determine the number of ways
that these events can occur.

• The counting rules and the probability rules can be used to solve more-complex
probability problems.

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 Exercise 5

1. Two urns contain 3 white 7 black balls and 10 white, 7 black balls respectively. A
ball is transferred from the first urn to the second and then a ball is drawn from the
second urn. Find the probability that it is black
2. Three persons write their names on individual slip of papers and deposit the slip in a
box. Each of three persons draws at random a slip from the box. Find the
probability that each person has drawn the slip bearing his own name.
3. A box contains 6 red and 4 black balls. Two draws of two balls each are made
without replacement. Find the probability that the first two balls are both red and the
next two are one red and one black.
4. Two urns contain: 3 white, 2 black and 4 white in the first urn and 3 black balls in
second urn. One ball is transferred from the first urn to the second. The ball is drawn
from the second urn. Find the probability that it is white.
5. If an event A3 is independent of two mutually exclusive events A1and A2 Show that
A3 is independent of A1U A2.
6. The probabilities that A and B solve a given problem independently are 2/3 and 3/5
respectively. If both of them attempt the problem, find the probability that the
problem will be solved.
7. An urn contains 8 red and 12 black balls. 3 balls are drawn at random and returned to
the urn. Again 3 balls are drawn. Find the probability that the 6 balls in the two draws
include 2 black balls.
8. A company has two machines M1and M2. M1 produces 60% of its product and M2
produces 40% of its product. M1 produces 5% defective units and M2 produces 4%
defective units. A unit is selected at random from the whole product. Find the
probability that it is defective.

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 CHAPTER 6
6. RANDOM VARIABLES AND PROBABILITY DISTRIBUTIONS
6.1 Introduction
What is probability?

Probability theory is a part of our everyday life. We may hear a doctor say that a patient
has a 50-50 chance of survival or a meteorologist predict heavy rain with 80%
chance. Probability theory is concerned with the study of random (or chance)
phenomena. Such phenomena are characterized by the fact that their future
behavior is not predictable in a deterministic fashion.

Probability is a numerical measure of the likelihood of an occurrence of event. It is a

measure of the degree of uncertainty associated with random events. The study of
probability dates back to the 17th century and the work of two mathematicians Blaise
Pascal (1623-1662) and pierre de Fermat (1601-1665). Today the mathematical
theory of probability is the basis for statistical applications in social, economic and
decision making areas.

The element of chance plays a vital role in our life. Many important business
decisions are made on this basis. The entire business of insurance and share market is
based on probability theory. Quality control, reliability theory, queuing theory, system
failure, radar detection, noise, birth and death rates and games of chance are some other
fields where probability finds application.

6.2 Objectives
After studying this chapter, you should be able to:

 Apply the principle of counting techniques to solve real problem.

 Explain the basic concept of probability.
 Define some basic terms of probability.
What is random variable?

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 Definition: A random variable is a numerical description of the outcomes of the experiment or
a numerical valued function defined on sample space, usually denoted by capital letters.

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. 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}
X assumes a specific number of values with some probabilities.
Random variables are of two types:
6.3 Discrete random variable:
Discrete random variables 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.
6.4 Continuous random variable
Continuous random variable: are variables that can assume all values between any two
give values.

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 Examples:
 Height of students at certain college.
 Mark of a student.
 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: Consider the experiment of tossing a coin three times. Let X be 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  1 8 38 38 18
Probability distribution is denoted by P for discrete and by f for continuous random
variable.
6.5 Properties of Probability Distribution:
1.
P( x)  0, if X is discrete.
f ( x)  0, if X is continuous.
2.

 P X  x   1 , if X is discrete.
x

 f ( x)dx  1 , if is continuous.
x

Note:
1. If X is a continuous random variable then

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 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.

6.6Introduction to expectation
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 1P( X 1 )  X 2 P( X 2 )  ....  X n P( X n )
n
  X i P( X i )
i 1
Again 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

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 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  1 8 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
 1.5
2. Suppose a charity organization is mailing printed return-address stickers to over one million
homes in the Ethiopia. Each recipient is asked to donate either $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

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 6.7 Mean and Variance of a random variable
Let X be a given random variable, then
1. The expected value of X which also known as mean is given as:

 Mean of X  E (X )
2. The variance of X is also given by:
n
E ( X )   xi P ( X  xi ) , if X is discrete
2 2

i 1
Where:
  x 2 f ( x)dx , if X is continuous .
x

Example:
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  7.252  29.59

Activity

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.

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 Let X and Y are random variables and k be 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 )
6.8 Common Discrete Probability Distributions
6.8.1 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.
 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.

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 Let P  the probability of success
q  1  p  the probability of failureon 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
  0.5 x 0.54  x
 x
 4
  0.54
 x
 4
 P( X  3)   0.54  0.25
 3
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 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?
Solution

Let X = the number of correct answers that the student gets.

X ~ Bin (n  6, p  0.30)

a) P( X  3)  ?
n
 P( X  x)    p x q n  x , x  0,1,2,..6
 x
6
  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 four 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
P( X  3)  ?

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 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

c) P( X  5)  ?

P( X  5)  1  P( X  5)
 1  {P( X  5)  P( X  6)}
 1  (0.010  0.001)
 0.989

Activity

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.

-Asking 20 people how old they are.

-Drawing 5 cards from a deck for a poker hand.

Remark: If X is a binomial random variable with parameters n and p then

E ( X )  np , Var ( X )  npq

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 6.8.2Poisson 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 averagenumber.

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!

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 Activity

On the average, five smokers pass a certain street corners every ten minutes, what is the
probability that during a given 10minutes the number of smokers passing will be

a. 6 or fewer
b. 7 or more
c. Exactly 8
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 averagenumber.

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
23 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 

6.9 Common Continuous Probability Distributions

6.9.1 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 Parametersof the Normal Distribution.

[Link] 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.
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.

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 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 2z 2

 f ( z)  e
2
6.9.2 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 )
 

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 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:

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:

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 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

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.....uniquenessof Area.

b) The area to the left of z is 0.9868

Solution

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 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

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

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 b)

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 [Link] its standard deviation if 20.0% of the area
under the normal curve lies to the right of 72.9
Solution

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 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

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
Activity

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.

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 Summary
• A discrete probability distribution consists of the values a random variable can assume
and the corresponding probabilities of these values. There are two requirements of a
probability distribution: the sum of the probabilities of the events must equal 1, and the
probability of any single event must be a number from 0 to [Link] distributions can
be graphed.

• The mean, variance, and standard deviation of a probability distribution can be found.
The expected value of a discrete random variable of a probability distribution can also be
found. This is basically a measure of the average.

• A binomial experiment has four requirements. There must be a fixed number of trials.
Each trial can have only two outcomes. The outcomes are independent of each other, and
the probability of a success must remain the same for each trial.

The probabilities of the outcomes can be found by using the binomial formula.

• In addition to the binomial distribution, there are some other commonly used
probability distributions such as Poisson distribution.

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 Exercise 6
1. A bag contains 3 red and 4 white balls. Find the probability distribution of the number
of red balls in 3 draws with replacement from the bag.
2. An experiment consists of three independent tosses of a fair coin. Let X denote the
number of heads, Y denote the number of head runs, Z denote the length of
head runs, a head run being defined as consecutive occurrence of at least two heads,
its length being the number of heads occurring together in three tosses of the coin.
Find the probability function of i) X, ii) Y, iii) Z, iv) X+Y, v) XY and
construct the probability table.
3. A continuous random variable X follows the probability law f(x) = Ax2, 0 < x < 1.
Determine A and find the probability that X lies between 0.2 and 0.5.
4. The amount of bread (in hundreds of pounds) X that a certain bakery is able to sell in
a day is found to be a numerical valued random phenomenon, with a probability
function specified by the pdf f(x) given by:
kx, 0  x  5

f x   k 10  x , 5  x  10

0, other wise
i. Find the value of K such that f(x) is a pdf.
ii. What is the probability that the number of pounds of bread that will be sold
tomorrow is:
a. More than 500 Pounds
b. Less than 500 Pounds
c. Between 250 and 750 Pounds
iii. Denoting by A, B, C the events that the pounds of bread sold are as in (a), (b) and
(c), respectively. Find P(A/B), P(A/C). Also check that whether:
a. A and B are independent
b. A and C are independent events.
5. Find the expectation of the number of failures preceding the first success in an infinite
series of independent trials with constant probability of success in each trial.

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 6. The density function of a random variable X is given by :

kx2  x  , 5  x  2
 2

f x   

0, other wise
Find
i. K
ii. Mean and Variance of the distribution.
7. The elementary probability law of continuous random variable X is

f x   keb  x a  , a  x   , where a, b and k are constants, Show that b 

1
and a =

 - δ where  and δ are respectively by the mean and standard deviation of the
distribution.
8. In a research, rats are injected with a drug that inhibits body synthesis of
protein. By the previous research, it was found that the probability of a rat dying from
the drug before the experiment is over is [Link] 10 rats are used:
a) How many are expected to die before the experiments ends.
b) ii) What is the probability that at least eight will survive.
9. The owner of a lodge with 5 cabins is considering buying air coolers on line to these
cabins. He expects that about half of his customers would be willing to rent coolers
and finally he buys 3 coolers. Assuming 100% occupancy at all times,
Find the probability that:
a. There will be more requests for coolers.
b. ii) A customer who requests will get one.
10. It has been found that 80% of printers used on home computers operate
correctly at the time of installation. A particular dealer sells 10 units during a given
month.
i. Find the probability that at least nine printer operate correctly on installation.
ii. Consider 5 months, in which 10 units are sold per month. What is the
probability that at least nine units operate correctly in each of the 5
month?

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 11. There is rainfall in a certain place is 10 days in every thirty days. Find the probability
that:
i. There is rainfall on at least 3 days of a given week.
ii. The first four days of a given week will be wet and the remaining days dry.
12. A department in a workshop has10 machines which may need adjustment from time
to time during the day. Three of these machines are odd; each having a probability of
1/11 of needing adjustment during the day and 7 are new, having corresponding
probabilities of 1/21. Assuming that the machine needs adjustments on the same
day, determine the probability that on a particular day.
i. Just 2 old and no new machines need adjustment.
ii. Just 2 machines need adjustment which is of the same type.
13. A wireless set is manufactured with 25 soldered joints each. On an average one
joint in 500 are defective. How many sets can be expected to be free from
defective joints in a consignment of 10,000 sets?
14. Red blood deficiency may be determined by examining a specimen of the blood
under the microscope. Suppose a certain small fixed volume contains on an
average 20 red calls for a normal person. Using poison distribution, obtain the
probability that a specimen from a normal person will contain less than 15 red
cells.
15. An insurance company has discovered that only 0.1% of the population is
involved in a certain type of accident each year. If its 10,000 policy holders
more randomly selected from the population, what is the probability that not more
than 5 of its clients will be involved is such an accident next year?
16. A company finds that the time taken by one of its engineers to complete a repair
job has a normal distribution with mean 40 minutes and S.D 5 minutes. State what
proportion of jobs take:
i. Less than 35 minutes.
ii. More than 48 minutes.

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 CHAPTER 7
7. SAMPLING AND SAMPLING DISTRIBUTION
7.1 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.

7.2 Objectives
After completing this chapter, you should be able to

 Demonstrate knowledge of the four basic sampling methods.

 Recognize faulty questions on a survey and other factors that can bias responses.
 Solve problems, using simulation techniques.
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.

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 7.2Errors 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 in
appropriate 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 (reason) for Sampling

- Reduced cost
- Greater speed
- Greater accuracy
- Greater scope
- More detailed information can be obtained.
There are two types of sampling.

7.3 Random Sampling or probability sampling.

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
7.3.1Simple 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.
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 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.

7.3.2Stratified 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, 29 to 39); Occupation (blue-collar,
professional, other).

7.3.3Cluster 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 within 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 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.

7.3.4 Systematic Sampling:

A complete list of all elements within 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.

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 Let
N
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 ) .

The j th unit is selected at first and then ( j  k )th , ( j  2k )th ,....etc until the
required sample size is reached.

7.4 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.

Example:

 Judgment sampling.
 Convenience sampling
 Quota Sampling.
7.4.1 Judgment Sampling
In this case, the person taking the sample has direct or indirect control over which items
are selected for the sample.

7.4.2 Convenience Sampling

In this method, the decision maker selects a sample from the population in a manner that
is relatively easy and convenient.

7.4.3 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.

[Link] simple random sampling is used

 We have Nn possible samples if sampling is with replacement.

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 N
 We have   possible samples if sampling is without replacement.
n
2. After this on wards we consider that samples are drawn from a given
population using simple random sampling.
7.5 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.
7.6 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

 Populationmean    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
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  We have N n  52  25 possible samples since sampling is with replacement.
Step 1: Draw all possible samples:

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

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 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  
X i f i 250
  10  
 i
f 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

2
X  2

n
2. If sampling is without replacement

2  N n
X 2
 
n  N 1 
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 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 size,

2
i.e.  X 
2

n
2
 X ~ N ( , )
n
X 
Z  ~ N (0,1)
 n

7.7 Central Limit Theorem

 and finite variance  , the sampling

2
Given a population of any functional form with mean

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 is
n
large.

Summary

• To obtain information and make inferences about a large population, researchers select
a sample. A sample is a subgroup of the population. Using a sample rather than a
population, researchers can save time and money, get more detailed information, and get
information that otherwise would be impossible to obtain.

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 • The four most common methods researchers use to obtain samples are random,
systematic, stratified, and cluster sampling methods. In random sampling, some type of
random method (usually random numbers) is used to obtain the sample. In systematic
sampling, the researcher selects every kth person or item after selecting the first one at
random. In stratified sampling, the population is divided into subgroups according to
various characteristics, and elements are then selected at random from the subgroups. In
cluster sampling, the researcher selects an intact group to use as a sample. When the
population is large, multistage sampling (a combination of methods) is used to obtain a
subgroup of the population.

• Researchers must use caution when conducting surveys and designing questionnaires;
otherwise, conclusions obtained from these will be inaccurate.

• Most sampling methods use random numbers, which can also be used to simulate many
real-life problems or situations.

The purpose of simulation is to duplicate situations that are too dangerous, too costly, or
too time-consuming to study in real life. Most simulation techniques can be done on the
computer or calculator, since they can rapidly generate random numbers, count the
outcomes, and perform the necessary computations. Sampling and simulation are two
techniques that enable researchers to gain information that might otherwise be
unobtainable.

Exercises 7
1) Suppose that the population distribution of the gripping strengths of industrial
workers is known to have a mean of 110 and standard deviation of 10. For a random
sample of 75 workers, what is the probability that the sample mean gripping strength
will be
a) Between 109 and 112
b) Greater than112?
2) The amount of sulphur in a daily emission from a factory has a normal distribution
with mean of 134 pounds and a standard deviation of 22pounds. For a day selected
randomly, find the probability that the mean amount of sulphur emission will be less
than 130 pounds.

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 3) A population consists of the four numbers, 3,7,11, 13 and 15. Consider all possible
samples of size 2 drawn from this population without replacement.
Find

a) The sampling distribution of sample means

b) The mean of sample means
c) The standard deviation of the sample means.

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 CHAPTER 8
8. ESTIMATION AND HYPOTHESIS TESTING
8.1 Introduction
Researchers are interested in answering many types of questions. For example, a scientist
might want to know whether the earth is warming up. A physician might want to know
whether a new medication will lower a person‟s blood pressure. An educator might wish
to see whether a new teaching technique is better than a traditional one. A retail merchant
might want to know whether the public prefers a certain color in a new line of fashion.
Automobile manufacturers are interested in determining whether seat belts will reduce
the severity of injuries caused by accidents. These types of questions can be addressed
through statistical hypothesis testing, which is a decision-making process for evaluating
claims about a population. In hypothesis testing, the researcher must define the
population under study, state the particular hypotheses that will be investigated, give the
significance level, select a sample from the population, collect the data, perform the
calculations required for the statistical test, and reach a conclusion. Hypotheses
concerning parameters such as means and proportions can be investigated.

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.

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 Inference
Analyzed
Populatio
n

Numerica
Sample
l data

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

8.2 Objectives
After completing this chapter, the student should be able to:

 Understand the definitions used in hypothesis testing.

 State the null and alternative hypotheses.
 Find critical values for the z-test.
 State the five steps used in hypothesis testing.
 Test means when sis known, using the z-test.
 Test means when population variance unknown, using the t-test.
 Test proportions, using the z-test.
 Test variances or standard deviations, using the chi-square test.
 Test hypotheses, using confidence intervals.
 Explain the relationship between type I and type II errors and the power of a test.
8.3 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.

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 8.3.1Point Estimation
It is a procedure that results in a single value as an estimate for a parameter.

8.3.2 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. 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.

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 8.4Point and Interval estimation of the population mean: µ
8.4.1 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 the population

 xi
means,  .That is X  is a point estimator of the population mean.
n
i. 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"?

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 distribution as n gets
n
large.

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 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 measureof 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
size 1   such

P( Z 2  Z  Z 2 )  1  
Where   is the probability that the parameterlies outsidethe int erval
Z 2  s tan ds for the s tan dard normal var iableto the right of which
 2 probability 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 a1001   % conifidence int erval for 

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 a1001   % conifidenc e int erval for 

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 Here are the z values corresponding to the most commonly used confidence levels.

100(1   ) %   2 Z 2

90 0.10 0.05 1.645

95 0.05 0.025 1.96
99 0.01 0.005 2.58
Case 2: 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.

Example:

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:

X  32,   4.2, 1    0.95    0.05,  2  0.025

 Z  2  1.96 from table.
 The requiredint erval will be X  Z 2  n
a)
 32  1.96 * 4.2 25
 32  1.65
 (30.35, 33.65)

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 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 requiredint 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.

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 8.5 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.
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:
8.5.1 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.

8.5.2Alternative 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.

8.6 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

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 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,

cannot be minimized at the same time. 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.
8.6.1 General steps in hypothesis testing:
1. The first step in hypothesis testing is to specify the null hypothesis (H0) and the
alternative hypothesis (H1).
[Link] next step is to select a significance level, 
[Link] the sampling distribution of the estimator.
[Link] fourth step is to calculate a statistic analogous to the parameter specified by the
null hypothesis.
[Link] the critical region.
[Link] decision.
[Link] of the result.
8.7 Hypothesis testing about the population means:
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
Case 1: When sampling is from a normal distribution with  2 known
The relevant test statistic is Z  X  
 n

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 After specifying  we have the following regions (critical and acceptance) on the
standard normal distribution corresponding to the above three hypothesis.
Summary Table for the decision rule
H0 Reject H0 if Accept H0 if Inconclusive if

  0 Z cal  Z 2 Z cal  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

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

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   0 tcal  t tcal  t tcal  t

X  0
Where: t cal 
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)

Step 3: Select an appropriate test statistics

t- Statistic is appropriate because population variance is not known and the sample size is also
small.
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 Step 4: identify the critical region.

Here we have two critical regions since we have two tailed hypothesis.

The critical region is tcal  t0.005 (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

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 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:

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.

Activity

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.

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 8.8 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.

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 Rr

Total C1 C2 Cj N

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 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 
 ~  ( r 1)(c 1)
r c
 cal   
2 2

i 1 j 1  eij 

Where Oij  the number of units that belongto categoryi of A and j of B.

eij  Expected frequencythat belongto categoryi 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:

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 H 0 : Thereis no association between A and B.
H1 : not H 0 ( Thereis association between A and B).

8.9 Decision Rule

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) .

 (Oij  eij ) 2 
 2 ( r 1)(c 1) at 
r c
 Reject H 0 if  cal   
2


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 : Thereis no association between Father and Son regardingboldness.

H1 : not H 0

First calculate the row and column totals

R1  144, R2  156, C1  150, C2  150

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 Then calculate the expected frequencies( eij‟s)

Ri * C j
eij 
n

R1 * C1 144 *150
 e11    72
n 300

R1 * C2 144 *150
e12    72
n 300

R2 * C1 156 *150
e21    78
n 300

R2 * C2 156 *150
e22    78
n 300
Obtain the calculated value of the chi-square.

2 2  (Oij  eij ) 2 
 2
cal    
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  2 cal   02.05 (1)

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 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 31 59 27
and 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:

H 0 : There is no associatio n between the size of the family and the level of
education attained by fathers.
H1 : 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.

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 2 3  (Oij  eij ) 2 
 2
cal    
i 1 j 1 e 
 ij

(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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 Summary
 This chapter introduces the basic concepts of hypothesis testing. A statistical
hypothesis is a conjecture about a population. There are two types of statistical
hypotheses: the null and the alternative hypotheses. The null hypothesis states that
there is no difference, and the alternative hypothesis specifies a difference. To test
the null hypothesis, researchers use a statistical test. Researchers compute a test
value from the sample data to decide whether the null hypothesis should be
rejected. Statistical tests can be one-tailed or two-tailed, depending on the
hypotheses.
 The null hypothesis is rejected when the difference between the population
parameter and the sample statistic is said to be significant. The difference is
significant when the test value falls in the critical region of the distribution. The
critical region is determined by a, the level of significance of the test. The level is
the probability of committing a type I error. This error occurs when the null
hypothesis is rejected when it is true.
 A second kind of error, the type II error, can occur when the null hypothesis is not
rejected when it is false.
• There are two common methods used to test hypotheses; they are the traditional method
and the P-value method.

• All hypothesis-testing situations using the traditional method should include the
following steps:

1. State the null and alternative hypotheses and identify the claim.
2. State an alpha level and find the critical value(s).
3. Compute the test value.
4. State critical value
5. State rejection region
6. Make the decision to reject or not reject the null hypothesis.
7. Summarize the results.

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 • The z-test is used to test a mean when the population standard deviation is known.

When the sample size is less than 30, the population values need to be normally
distributed.

The standard deviation of the population was 3 minutes.

Important Formulas

• When the population standard deviation is not known, researchers use a t-test to test a
claim about a mean. If the sample size is less than 30, the population values need to be
normally or approximately normally distributed.

• A single variance can be tested by using the chi-square test.

• There is a relationship between confidence intervals and hypothesis testing. When the
null hypothesis is rejected, the confidence interval for the mean using the same level of
significance will not contain the hypothesized mean. When the null hypothesis is not
rejected, the confidence interval, using the same level of significance, will contain the
hypothesized mean.

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 Exercise 8
1. An electrical firm manufactures light bulbs that have a length of life that is
approximately normally distributed with a standard deviation of 40 hours. If a random
sample of 30 bulbs has an average life of 780 hours, find a 99% confidence interval
for the population mean of all bulbs produced by this firm.
2. A random sample of 400 households was drawn from a town and a survey generated
data on weekly earning. The mean in the sample was Birr 250 with a standard
deviation Birr 80. Construct a 95% confidence interval for the population mean
earning.
3. A major truck has kept extensive records on various transactions with its
customers. If a random sample of 16 of these records shows average sales of
290 liters of diesel fuel with a standard deviation of 12 liters, construct a 95%
confidence interval for the mean of the population sampled.
4. The manufacturer of a certain type of battery is trying to estimate the lifetime of the
battery. He believes each battery will last for a random amount of time that has a
N(µ,100) distribution. (The lifetimes are measured in hours.) He carries out an
experiment to estimate µ. A sample of 400 batteries is tested and their lifetimes are
measures. The (sample) mean lifetime is found to be 74.2 hours. Calculate a 95%
confidence interval for µ. How do you interpret this interval?
5. A biostatistician intends to estimate µ, the mean blood pressure of women
between the ages of 45 and 50. She takes a random sample of 20 women and
measures their blood pressure. Based on past experience she believes the
measurements will follow a N(µ, 100) distribution. (Measurements are in mm
mercury.) Suppose she discovers the sample mean is equal to 136.9 mm mercury.
Find a 95% confidence interval for µ.
6. A biologist measured a random sample of 12 fossil skeletons of an extinct species of
bird. He found that their skulls had a mean length of 6.34cm and a standard
deviation of 0.45cm. He believes that the lengths of the skulls follow a
normal distribution. Use the data to obtain a 95% confidence interval for the mean of
this distribution.

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 7. A machine is set up such that the average content of juice per bottle equals µ. A
sample of 100 bottles yields an average content of [Link] a 90% and a
95% confidence interval for the average content. Assume that the population
standard deviation σ= 5cl.
8. What sample size is required to estimate the average contents to within 0.5cl at the
95% confidence level? (= + or - 0.5 cl) Assume that the population standard
deviation σ= 5cl.
9. A machine is set up such that the average content of juice per bottle equals µ. A
sample of 36 bottles yields an average content of48.5cl. Test the hypothesis that the
average content per bottle is 50cl at the 5% significance level. Assume that the
population standard deviation σ= 5cl.
10. A machine is set up such that the average content of juice per bottle equals µ. A
sample of 100 bottles yields an average content of 48.8cl. Test the hypothesis that the
average content per bottle is 50cl at the 5% significance level. Compare the
conclusion to that based on the 36 bottles sample. Assume that the population
standard deviation σ= 5cl.
11. A machine is set up such that the average content of juice per bottle equals µ. A
sample of 36 bottles yields an average content of [Link] you reject the
hypothesis that the average content per bottle is less than or equal to 45cl in favor of
the alternative that it exceeds 45cl (5% significance level)? Assume that the
population standard deviation σ= 5cl.
12. The manager claims that the average content of juice per bottle is less than 50cl. The
machine operator disagrees. A sample of 100 bottles yields an average content of 49cl
per bottle. Does this sample allow the manager to claim he is right (5%
significance level)? Assume that the population standard deviation σ= 5 cl.
13. Out of a sample of 80 customers 60 of them reply they are satisfied with the
service they received .Calculate a 95% confidence interval for the proportion
of satisfied customers .

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 14. Random samples of 200 men, all retired were classified according to education and
number of children is as shown below.
Education level

No. of Children
0-1 2-3 Over 3
Elementary 14 37 32
Secondary and above 31 59 27

Test the hypothesis that the size of the family is independent of the level of
education attained by fathers. (Use 5% level of significance)

15. From a normal population with the standard deviation is 4.2. A sample of size
25 are taken with mean of 32. Find a 99% confidence interval for the population
mean.

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 CHAPTER 9
9. SIMPLE LINEAR REGRESSION AND CORRELATION
9.1 Introduction
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 relationship
which are described in the regression equation.

We say there is correlation when the two series of items vary together directly or
inversely.

9.2 Objectives
After completing this chapter, students should be able to:

 Draw a scatter plot for a set of ordered pairs.

 Compute the correlation coefficient.
 Compute the equation of the regression line.
 Compute the coefficient of determination.
 Compute the standard error of the estimate.
 Find a prediction interval.
 Be familiar with the concept of multiple regression.
9.3 Simple Correlation
Suppose we have two variables X  ( X 1 , X 2 ,...X n ) and
Y  (Y1 , Y2 ,...Yn )

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  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:

1) Income and expenditure

2) Number of hours spent in studying and the score obtained
3) Height and weight
4) 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:

[Link] and supply

[Link] 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

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 Y2=be the rate of getting a scholar ship.

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.

[Link]:
The correlation that arises by chance is called spurious correlation.

Examples:

1. Price of teff in Addis Ababa and grade of students in USA.

2. 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 i  X )(Yi  Y ) and the short cut formula is
 i
( X  X ) 2
 i
(Y  Y ) 2

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

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

Remark:

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

Interpretation of r

[Link] positive linear relationship ( if r  1)

[Link] Positive linear relationship ( if r is between 0 and 1)

[Link] linear relationship ( if r  0)

[Link] Negative linear relationship ( if r is between -1 and 0)

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 [Link] negative linear relationship ( if r  1)
Examples:

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

Student Mid [Link] Final [Link]

(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

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

Activity

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.(

X: 650 654 720 456 536 853 735 650 536 666

Y: 450 523 235 398 500 632 500 635 450 360

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 D i
iii. Use the following formula

6 Di
2
rs  1 
n(n 2  1)
Where rs  coefficien t of rank correlatio n
D  the difference between paired ranks
n  the number of pairs

Example:

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 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 Y R1-R2 D2

(R1) (R2) (D)

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.

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 9.4 Simple Linear Regression
Simple linear regression refers to the linear relationship 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  Dependentvar iable
X  independent var iable
  Re gression cons tan t
  regressionslope
  randomdisturbance term
Y ~ N (  X ,  2 )
 ~ N (0,  2 )

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

 The least square method
 The maximum likelihood method
 The method of moments
The above model is estimated by:

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

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 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) Draw scatter diagram

b) Calculate a simple correlation coefficient
c) Fit a regression line of Statistics on Accounting using least square estimates.
d) Predict the score of Statistics if the score of accounting is 85.
Solution:

Accounting Statistics
X Y

1 74.00 81.00

2 93.00 86.00

3 55.00 67.00

4 41.00 35.00

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 5 23.00 30.00

6 92.00 100.00

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

a.

Figure 9.1 Scatter Diagram of raw data.

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 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

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

b)

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 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).
c)

Using OLS:

 Yˆ  7.0194  0.9560 X is the estimated regressionline.

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 Figure 9.2 Scatter Diagram and Regression Line

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

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

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.

2
i 1 X i  147,000,000 i 1Yi  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 we
2
use a measure called coefficient of determination ( r )

 (Yˆ  Y ) 2
i.e r  2

 (Y  Y ) 2
Where r  the simple correlatio n coefficient.
r2 gives the proportion of the variation in Y explained by the regression of Y on X.

1  r 2 gives the unexplained proportion and is called coefficient of indetermination.

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 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 S
i. r  XY  r 2  X2 Y 2
S X SY S X SY
bS X rS
ii. r b Y
SY SX

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 Summary
• Many relationships among variables exist in the real world. One way to determine
whether a linear relationship exists is to use the statistical techniques known as
correlation and regression. The strength and direction of a linear relationship are
measured by the value of the correlation coefficient. It can assume values between and
including -1 and +1. The closer the value of the correlation coefficient is to -1 or +1, the
stronger the linear relationship is between the variables. A value of -1 or +1 indicates a
perfect linear relationship. A positive relationship between two variables means that for
small values of the independent variable, the values of the dependent variable will be
small, and that for large values of the independent variable, the values of the dependent
variable will be large. A negative relationship between two variables means that for small
values of the independent variable, the values of the dependent variable will be large, and
that for large values of the independent variable, the values of the dependent variable will
be small.

• Remember that a significant relationship between two variables does not necessarily
mean that one variable is a direct cause of the other variable. In some cases this is true,
but other possibilities that should be considered include a complex relationship involving
other (perhaps unknown) variables, a third variable interacting with both variables, and a
relationship due solely to chance.

• Relationships can be linear or nonlinear. To determine the shape, you draw a scatter plot
of the variables. If the relationship is linear, the data can be approximated by a straight
line, called the regression line, or the line of best fit. The closer the value of r is to -1 or
+1, the more closely the points will fit the line.

 The coefficient of determination is a better indicator of the strength of a linear

relationship than the correlation coefficient. It is better because it identifies the
percentage of variation of the dependent variable that is directly attributable to the
variation of the independent variable. The coefficient of determination is obtained by
squaring the correlation coefficient and converting the result to a percentage.

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 Exercise 9
1. The following are advertised sale prices of color televisions in Addis with different
size.

Size (inches) 9 20 27 31 35 40 60
Sale Price ($) 147 197 297 447 1177 2177 2497

a) Decide which variable should be the independent variable and which should be
the dependent variable.
b) Make a scatter plot of the data.
c) Does it appear from inspection that there is a relationship between the
variables?
d) Calculate the least squares line. Put the equation in the form of: y= a+ bx
e) Find and interpret the correlation coefficient.
f) Find the estimated sale price for a 32 inch television
g) What is the slope of the least squares (best-fit) line? Interpret the slope.
1. The monthly income (X) and monthly food expenditure (Y) of 11 households (in
hundreds of (birr) are taken randomly to fit linear relationship between the two
variables.
X 3.8 4.5 2.5 4.8 7.7 5.0 12.6 8.5 5.5 7.1 3.5
Y 3.1 3.6 2.3 3.7 4.6 4.1 6.5 5.1 4.0 4.1 3.2

Compute and interpret

a) The Coefficient of correlation, r.

b) The coefficient of determination, r2

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 ANSWER FOR SELECTED EXERCISE
Exercise 1

2. i) 20 students he meets walking on the campus late at night

ii) All Hawassa University students

iii) NO!, the sample is not a representative sample

3. C. Yes. The implied population is the responses (watch/not watch) of all TV owners in
Addis Ababa

4. a. The weight of each pineapple in the experimental field and/or the maximum
girth of each pineapple in the experimental field.

b. The taste [color] of every pineapple in the field

5. Identify the misuse of statistics in the following cases.

a. We doubt about the mechanisms how the mission is measured and quantified.
This leads miss use of statistical figures.

b. This value is on average, because all individual has not CGPA

3.00. There is a student who has scored above 3.00 and below

3.00.

6. State the level of measurement for each of the following:

i. Ordinal scale

h. Nominal scale

i. Nominal scale

j. Ordinal scale

k. Ordinal scale

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 l. Ratio Scales

m. Interval scale.

Exercise 2

4.

Class(1) Tally (2) Frequency(3) Percent(4)

M 5 20
////
S //// // 7 28
D //// // 7 28
W //// 6 24

5.

Number of children 2 3 4 5 6 7 8 Total

Number of family 5 7 8 4 1 2 3 30
6.

Classes Frequency
23 - 26 3
27 - 30 4
31 - 34 3
35 - 38 5
39 - 42 5
Total 20

7.

Mark Tally Frequency

60 // 2
62 / 1
63 / 1
65 / 1

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 70 //// 4
74 / 1
75 // 2
76 / 1
80 /// 3

Exercise 3

5. Q1 =34.17, Q3 = 57.5, D4 = 50, P75 = Q3 = 57.5

7. Q1 =34.5, Q3 =57.83, D4 =42.17, D6 =50.3, P40 =42.17, P80 =60.93

8. Mean=68, Median=72, Mode= 80

9. Mean = 111.6$, G.M. = 56.00$, H.M = 28.9$, G.M. is best

10. Median = 31.7, Q1 =25.9, Q3 = 36.8

11. H.M. = 3.2, quantities 8 and 2

12. Mode = 5

13. 22.5

Exercise 5

1. 97/200

2. 1/6

3. 4/21

4. 23/40

6.13/15

7. 60/36!

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 8. 0.046

9. 0.5

10. 9/19

11. 6/43, 12/43, 25/43

13. 0.344814. 0.3623, 0.4058, 0.2319

15. 4/65

Exercise 6

3. A=3 and 0.117.

8 i) 2 ii) 0.6778

9. iii) 0.1875 iv) 0.8125

10. i) 0.3758 ii) 0.0075

11. i) 0.4295 ii) 0.0037

12. i) 0.016 ii) 0.044

13. 9512

e 20 20
14 x

14. 
x 0 x!

15. 0.06651

16. i) 0.159 ii) 0.055

Exercise 7

1. a) 0.7633 b)0.0418

2. 0.57

Exercise 8

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 1. (761.19, 798.81)

2. (242.16, 257.84)

3. (283.61, 296.39

7. (47.18, 48.82), (47.02, 48.98)

8. 384

9. H0 is not rejected

10. H0 is not rejected

11. H0 is rejected

12. H0 is rejected

13. (0.654, 0.846)

14 The decision is to reject H0 and conclude that there is association.

 2
cal  63,  tabulate
2

  02.05, 2  5.99

15. A 99% confidence interval for the population mean is (29.8328, 34.1672)

Exercise 9

1. c) Yes

d). y = - 745 + 54.8 x

e) r=0.89, the two variables have strong positive linear relation.

f) 1008.6

g) 54.8 as the size of the television increases by one inch, the average price increases
by 54.8 units.

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 2. b) yes c) y =65.0876+7.0948

e) r =0.9761,the two variables have strong positive linear relation

f) 72.2 cm

j) Slope = 7.0948. As the age of boy increases by one year, the average height

increases by 7.0948 cm.

3. a) r =0.976 (the two variables have strong positive linear relation.)

b) r2 =0.95, 95% of the variation in monthly food expenditure (Y) is explained

by the simple linear regression of monthly food expenditure on monthly income.

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 References
 Eshetu Wencheko (2000). Introduction to Statistics. Addis Ababa University Press.
 Bluman, A.G. (1995). Elementary Statistics: A Step by Step Approach (2nd Ed.).Wm.
C. Brown Communications, Inc.
 Freund, J.E and Simon, G.A. (1998). Modern Elementary Statistics (9th Ed.). .
 Gupta, C.B. and Gupta, V. (2004). An Introduction to Statistical Methods. Vikas
Publishing House, Pvt. Ltd, India.
 Spiegel, M.R. and Stephens, L.J. (2007). Schaum's Outline Series (4th Ed.). McGraw-
Hill, New York.

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 Appendix: Tables
A. The Standard Normal Distribution Table

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 B. The Student’s t-distribution Table

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 C. The Chi-Square distribution Table

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