Statistics for Business and Economics James T. MCCLAVE

Contents

Preface xiii

vii

Statistics, Data, and Statistical Thinking 1

1.1 The Science of Statistics 3

1.2 Types of Statistical Applications in Business 4

1.3 Fundamental Elements of Statistics 6

1.4 Processes (Optional) 10

1.5 Types of Data 13

1.6 Collecting Data: Sampling and Related Issues 14

1.7 Business Analytics: Critical Thinking with Statistics 21

STATISTICS IN ACTION: A 20/20 View of Surveys: Fact or Fiction? 1

ACTIVITY 1.1: Keep the Change: Collecting Data 30

ACTIVITY 1.2: Identifying Misleading Statistics 30

USING TECHNOLOGY: Accessing and Listing Data; Random Sampling 31

1

Methods for Describing Sets of Data 39

2.1 Describing Qualitative Data 41

2.2 Graphical Methods for Describing Quantitative Data 51

2.3 Numerical Measures of Central Tendency 63

2.4 Numerical Measures of Variability 74

2.5 Using the Mean and Standard Deviation to Describe Data 81

2.6 Numerical Measures of Relative Standing 89

2.7 Methods for Detecting Outliers: Box Plots and z-Scores 94

2.8 Graphing Bivariate Relationships (Optional) 104

2.9 The Time Series Plot (Optional) 109

2.10 Distorting the Truth with Descriptive Techniques 111

STATISTICS IN ACTION: Can Money Buy Love? 39

ACTIVITY 2.1: Real Estate Sales 124

ACTIVITY 2.2: Keep the Change: Measures of Central Tendency and Variability 124

USING TECHNOLOGY: Describing Data 125

MAKING BUSINESS DECISIONS: The Kentucky Milk Case—Part I (Covers Chapters 1 and 2) 130

2

Probability 132

3.1 Events, Sample Spaces, and Probability 134

3.2 Unions and Intersections 148

3.3 Complementary Events 151

3.4 The Additive Rule and Mutually Exclusive Events 153

3.5 Conditional Probability 160