..
.. SLIDES . BY
. John Loucks
..
.. St. Edward’s
.. University
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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1
or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 3, Part B
Descriptive Statistics: Numerical
Measures
Measures of Distribution Shape, Relative
Location, and Detecting Outliers
Five Number Summaries and Box Plots
Measures of Association Between Two
Variables
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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2
or duplicated, or posted to a publicly accessible website, in whole or in part.
Measures of Distribution Shape,
Relative Location, and Detecting Outliers
Distribution Shape
z-Scores
Empirical Rule
Detecting Outliers
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3
or duplicated, or posted to a publicly accessible website, in whole or in part.
Distribution Shape: Skewness
An important measure of the shape of a
distribution is called skewness.
The formula for the skewness of sample data is
3
n xi x
Skewness
(n 1)(n 2) s
Skewness can be easily computed using
statistical software.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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4
or duplicated, or posted to a publicly accessible website, in whole or in part.
Distribution Shape: Skewness
Symmetric (not skewed)
• Skewness is zero.
• Mean and median are equal.
.35
Skewness =
0
Relative Frequency
.30
.25
.20
.15
.10
.05
0
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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5
or duplicated, or posted to a publicly accessible website, in whole or in part.
Distribution Shape: Skewness
Moderately Skewed Left
• Skewness is negative.
• Mean will usually be less than the median.
.35
Skewness = - .31
Relative Frequency
.30
.25
.20
.15
.10
.05
0
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
Slide
6
or duplicated, or posted to a publicly accessible website, in whole or in part.
Distribution Shape: Skewness
Moderately Skewed Right
• Skewness is positive.
• Mean will usually be more than the median.
.35
Skewness = .31
Relative Frequency
.30
.25
.20
.15
.10
.05
0
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
Slide
7
or duplicated, or posted to a publicly accessible website, in whole or in part.
Distribution Shape: Skewness
Highly Skewed Right
• Skewness is positive (often above 1.0).
• Mean will usually be more than the median.
.35
Skewness = 1.25
Relative Frequency
.30
.25
.20
.15
.10
.05
0
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
Slide
8
or duplicated, or posted to a publicly accessible website, in whole or in part.
Distribution Shape: Skewness
Example: Apartment Rents
Seventy efficiency apartments were
randomly
sampled in a college town. The monthly rent
prices
425 430 430 435 435 435 435 435 440 440
for the apartments are listed below in ascending
440 440 440 445 445 445 445 445 450 450
order.
450 450 450 450 450 460 460 460 465 465
465 470 470 472 475 475 475 480 480 480
480 485 490 490 490 500 500 500 500 510
510 515 525 525 525 535 549 550 570 570
575 575 580 590 600 600 600 600 615 615
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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9
or duplicated, or posted to a publicly accessible website, in whole or in part.
Distribution Shape: Skewness
Example: Apartment Rents
.35 Skewness = .92
Relative Frequency
.30
.25
.20
.15
.10
.05
0
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
Slide
10
or duplicated, or posted to a publicly accessible website, in whole or in part.
z-Scores
The z-score is often called the standardized value.
It denotes the number of standard deviations a data
value xi is from the mean.
xi x
zi
s
Excel’s STANDARDIZE function can be used to
compute the z-score.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
z-Scores
An observation’s z-score is a measure of the relative
location of the observation in a data set.
A data value less than the sample mean will have a
z-score less than zero.
A data value greater than the sample mean will hav
a z-score greater than zero.
A data value equal to the sample mean will have a
z-score of zero.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
z-Scores
Example: Apartment Rents
• z-Score of Smallest Value (425)
xi x 425 490.80
z 1.20
s 54.74
Standardized Values for Apartment Rents
-1.20 -1.11 -1.11 -1.02 -1.02 -1.02 -1.02 -1.02 -0.93 -0.93
-0.93 -0.93 -0.93 -0.84 -0.84 -0.84 -0.84 -0.84 -0.75 -0.75
-0.75 -0.75 -0.75 -0.75 -0.75 -0.56 -0.56 -0.56 -0.47 -0.47
-0.47 -0.38 -0.38 -0.34 -0.29 -0.29 -0.29 -0.20 -0.20 -0.20
-0.20 -0.11 -0.01 -0.01 -0.01 0.17 0.17 0.17 0.17 0.35
0.35 0.44 0.62 0.62 0.62 0.81 1.06 1.08 1.45 1.45
1.54 1.54 1.63 1.81 1.99 1.99 1.99 1.99 2.27 2.27
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Empirical Rule
When the data are believed to approximate a
bell-shaped distribution …
The empirical rule can be used to determine the
percentage of data values that must be within a
specified number of standard deviations of the
mean.
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Empirical Rule
For data having a bell-shaped distribution:
68.26% of the values of a normal random variable
are within+/- 1 standard deviation of its mea
95.44% of the values of a normal random variable
are within +/- 2 standard deviations of its mea
99.72% of the values of a normal random variable
are within +/- 3 standard deviations of its mea
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Empirical Rule
99.72%
95.44%
68.26%
m
x
m – 3s m – 1s m + 1s m + 3s
m – 2s m + 2s
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Detecting Outliers
An outlier is an unusually small or unusually large
value in a data set.
A data value with a z-score less than -3 or greater
than +3 might be considered an outlier.
It might be:
• an incorrectly recorded data value
• a data value that was incorrectly included in the
data set
• a correctly recorded data value that belongs in
the data set
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Detecting Outliers
Example: Apartment Rents
• The most extreme z-scores are -1.20 and 2.27
• Using |z| > 3 as the criterion for an outlier, there
are no outliers in this data set.
Standardized Values for Apartment Rents
-1.20 -1.11 -1.11 -1.02 -1.02 -1.02 -1.02 -1.02 -0.93 -0.93
-0.93 -0.93 -0.93 -0.84 -0.84 -0.84 -0.84 -0.84 -0.75 -0.75
-0.75 -0.75 -0.75 -0.75 -0.75 -0.56 -0.56 -0.56 -0.47 -0.47
-0.47 -0.38 -0.38 -0.34 -0.29 -0.29 -0.29 -0.20 -0.20 -0.20
-0.20 -0.11 -0.01 -0.01 -0.01 0.17 0.17 0.17 0.17 0.35
0.35 0.44 0.62 0.62 0.62 0.81 1.06 1.08 1.45 1.45
1.54 1.54 1.63 1.81 1.99 1.99 1.99 1.99 2.27 2.27
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Five-Number Summaries
and Box Plots
Summary statistics and easy-to-draw graphs can be
used to quickly summarize large quantities of data.
Two tools that accomplish this are five-number
summaries and box plots.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Five-Number Summary
1 Smallest Value
2 First Quartile
3 Median
4 Third Quartile
5 Largest Value
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Five-Number Summary
Example: Apartment Rents
Lowest Value = 425 First Quartile = 445
Median = 475
Third Quartile = 525 Largest Value = 615
425 430 430 435 435 435 435 435 440 440
440 440 440 445 445 445 445 445 450 450
450 450 450 450 450 460 460 460 465 465
465 470 470 472 475 475 475 480 480 480
480 485 490 490 490 500 500 500 500 510
510 515 525 525 525 535 549 550 570 570
575 575 580 590 600 600 600 600 615 615
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Box Plot
A box plot is a graphical summary of data that is
based on a five-number summary.
A key to the development of a box plot is the
computation of the median and the quartiles Q1 and
Q3.
Box plots provide another way to identify outliers.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Box Plot
Example: Apartment Rents
• A box is drawn with its ends located at the first an
third quartiles.
• A vertical line is drawn in the box at the location of
the median (second quartile).
40 42 45 47 50 52 55 57 60 62
0 5 0 5 0 5 0 5 0 5
Q1 = 445 Q3 = 525
Q2 = 475
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Box Plot
Limits are located (not drawn) using the
interquartile range (IQR).
Data outside these limits are considered
outliers.
The locations of each outlier is shown with the
symbol * .
continued
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Box Plot
Example: Apartment Rents
• The lower limit is located 1.5(IQR) below Q1.
Lower Limit: Q1 - 1.5(IQR) = 445 - 1.5(80) = 325
• The upper limit is located 1.5(IQR) above Q3.
Upper Limit: Q3 + 1.5(IQR) = 525 + 1.5(80) = 645
• There are no outliers (values less than 325 or
greater than 645) in the apartment rent data.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Box Plot
Example: Apartment Rents
• Whiskers (dashed lines) are drawn from the
ends
of the box to the smallest and largest data
values
inside the limits.
40 42 45 47 50 52 55 57 60 62
0 5 0 5 0 5 0 5 0 5
Smallest value Largest value
inside limits = 425 inside limits = 615
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Measures of Association
Between Two Variables
Thus far we have examined numerical methods used
to summarize the data for one variable at a time.
Often a manager or decision maker is interested in
the relationship between two variables.
Two descriptive measures of the relationship
between two variables are covariance and correlation
coefficient.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Covariance
The covariance is a measure of the linear association
between two variables.
Positive values indicate a positive relationship.
Negative values indicate a negative relationship.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Covariance
The covariance is computed as follows:
( xi x )( yi y ) for
sxy
n 1 samples
( xi x )( yi y ) for
xy populations
N
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Correlation Coefficient
Correlation is a measure of linear association and not
necessarily causation.
Just because two variables are highly correlated, it
does not mean that one variable is the cause of the
other.
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Correlation Coefficient
The correlation coefficient is computed as follows:
sxy xy
rxy xy
sx s y x y
for for
samples populations
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Correlation Coefficient
The coefficient can take on values between -1 and +1
Values near -1 indicate a strong negative linear
relationship.
Values near +1 indicate a strong positive linear
relationship.
The closer the correlation is to zero, the weaker the
relationship.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Covariance and Correlation Coefficient
Example: Golfing Study
A golfer is interested in investigating the
relationship, if any, between driving distance
and 18-hole score.
Average Driving Average
Distance (yds.) 18-Hole Score
277.6 69
259.5 71
269.1 70
267.0 70
255.6 71
272.9 69
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Covariance and Correlation Coefficient
Example: Golfing Study
x y (xi x) (yi y) (xi x)(yi y)
277.6 69 10.65 -1.0 -10.65
259.5 71 -7.45 1.0 -7.45
269.1 70 2.15 0 0
267.0 70 0.05 0 0
255.6 71 -11.35 1.0 -11.35
272.9 69 5.95 -1.0 -5.95
Average 267.0 70.0 Total -35.40
Std. Dev. 8.2192.8944
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.
Covariance and Correlation Coefficient
Example: Golfing Study
• Sample Covariance
sxy
(x x)(y y) 35.40
i i
7.08
n 1 6 1
• Sample Correlation Coefficient
sxy 7.08
rxy -.9631
sxsy (8.2192)(.8944)
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied
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or duplicated, or posted to a publicly accessible website, in whole or in part.