Statics and Probability Ch1-9

Introduction to Statistics and probability
CHAPTER ONE
INTRODUCTION TO CONCEPT OF STATISTICS
Objectives of this chapter:

to introduce the concept of statistics
to introduce classes of statistics
to introduce stages of statistical investigations
to point some uses and limitations of use of statistics
to make aware of different measurement scales
1.1 Definition and classification of Statistics
Definition: 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): 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.
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.
Inferential statistics utilizes sample data to make decision for entire data set.
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1. Of 50 randomly selected students at biology department of Addis Ababa university 28 of

which are female. An example of inferential statistics is the following statement: "56% of
students at biology department of Addis Ababa University are female."
We have no information about all students at biology department of Addis Ababa
University, just about the 50. We have taken that information and generalized it to talk
about all students at biology department of Addis Ababa University.
2. ―There is a definitive relationship between smoking and lung cancer‖. This statement is
the result of continuous research of many samples taken and studied. Therefore, it
is an inference made from sample results.
3. As a result of recent reduction in oil production by oil producing nations , we
can expect the price of gasoline to double up in the next year.(It is an inference
from sample survey).
4. As a result of recent survey of public opinion, most Americans are in favor of
building additional nuclear power plant.(Inference)
5. If an instructor of Introduction to Statistics calculates one of his/her classes to describe
the performance of that class, he/she is doing decretive statistics; where as if he/she uses
this average grade of all classes, he/she doing inferential statistics.
1.2 Stages of Statistical Investigation
Before we deal with statistical investigation, let us see what statistical data mean. Each and every
numerical data can‘t be considered as statistical data unless it possesses the following criteria.
These are:
The data must be aggregate of facts
They must be affected to a marked extent by a multiplicity of causes
They must be estimated according to reasonable standards of accuracy
The data must be collected in a systematic manner for predefined purpose
The data should be placed in relation to each other
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A statistician should be involved at all the different stages of statistical investigation when
planning to conduct scientific research. This includes formulating the problem, and then
collecting, organizing (classifying), presenting, analyzing and interpreting of statistical data.
Formulating the problem:- First research must emanate if there is a problem. At this stage the
investigator must be sure to understand the problem and then formulate it in statistical term.
Clarify the objectives very carefully. Ask as many questions as necessary because ―An
approximate answer to the right question is worth a great deal more than a precise answer to the
wrong question.‖ -The first golden rule of applied mathematics-
Therefore,
Get a clear understanding of the physical background to the situation under study;
Clarify the objectives;
Formulate the objective in statistical terms
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.
Exercise: Discuss the advantage and disadvantage of the above three methods with respect to
each other.
Organization of data: Summarization of data in some meaningful way, e.g table form
Presentation of the data: The process of re-organization, classification, compilation, and
summarization of data to present it in a meaningful form.
Analysis of data: The process of extracting relevant information from the summarized data,
mainly through the use of elementary mathematical operation.
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.
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1.3 Definition of some Statistical terms
a. 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 AAU 3101 course in this term.
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 survey: 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.
i. Data:- Data as a collection of related facts and figures from which conclusions may be drawn.
Activities1: write similarities vs differences of the following concepts in space provided.

Concepts Similarity difference
Sample & population --------------------------------- -------------------------------------
-------------------------------- ---------------------------------------
---------------------------------- ---------------------------------------
Census survey & sampling------------------------------- ---------------------------------------

--------------------------------- ---------------------------------------
------------------------------ ------------------------------------------
Parameter & statistic ----------------------------------- ------------------------------------------

-------------------------------- ------------------------------------------
-------------------------------- -----------------------------------------
Data & variable --------------------------------- -------------------------------------------
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----------------------------------- --------------------------------------------
------------------------------------ --------------------------------------------
1.4 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 include
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.)
1.5 Applications, Uses and Limitations of Statistics
Applications of statistics:
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.
Uses of statistics:
The main function of statistics is to enlarge our knowledge of complex phenomena. The
following are some uses of statistics:
It presents facts in a definite and precise form.
Data reduction.
Measuring the magnitude of variations in data.
Furnishes a technique of comparison
Estimating unknown population characteristics.
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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).
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
were it falls - immediately ahead or a mile downs the road.
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: Oi, 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(Oi) - 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 ).
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
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they be given the value zero. Defining O0 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.
Scale Type
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
and each possessed different properties of measurement systems.
1. Nominal Scales
Nominal scales are measurement systems that possess none of the three properties stated above.
Level of measurement which classifies data into mutually exclusive, all inclusive categories in
which no order or ranking can be imposed on the data.
No arithmetic and relational operation can be applied.
Examples:
o Political party preference (Republican, Democrat, or Other,)
o Sex (Male or Female.)
o Marital status(married, single, widow, divorce)
o Country code
o Regional differentiation of Ethiopia(region 1, 2,….,9)
2. 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.
Level of measurement; which classifies data into categories that can be ranked, 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.
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Examples:
o Letter grades (A, B, C, D, F).
o Rating scales (Excellent, Very good, Good, Fair, poor)
o Military status
3. Interval Scales
Interval scales are measurement systems that possess the properties of Order and distance, but
not the property of fixed zero.
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 oF.
4. Ratio Scales
Ratio scales are measurement systems that possess all 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.
Level of measurement which classifies data that can be ranked, differences are meaningful,
and there is a true zero. True ratios exist between the different units of measure.
All arithmetic and relational operations are applicable.
Examples:
o Weight
o Height
o Number of students
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o Age
Exercises
The following questions 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.
1. Your checking account number as a name for your account.
2. Your checking account balance as a measure of the amount of money you have in that
account.
3. The order in which you were eliminated in a spelling bee as a measure of your spelling
ability.
4. Your score on the first statistics test as a measure of your knowledge of statistics.
5. Your score on an individual intelligence test as a measure of your intelligence.
6. The distance around your forehead measured with a tape measure as a measure of your
intelligence.
7. 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.
8. Times for swimmers to complete a 50-meter race
9. Months of the year Meskerm, Tikimit…
10. Socioeconomic status of a family when classified as low, middle and upper classes.
11. Blood type of individuals, A, B, AB and O.
12. Pollen counts provided as numbers between 1 and 10 where 1 implies there is almost no
pollen and 10 that it is rampant, but for which the values do not represent an actual counts of
grains of pollen.
13. Regions numbers of Ethiopia (1, 2, 3 etc.)
14. The number of students in a college;
15. the net wages of a group of workers;
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CHAPTER TWO
INTRODUCTION TO METHODS OF DATA COLLECTION AND PRESENTATION
Objectives of this chapter are:

to introduce the methods of data collection techniques
to show different methods of data display
to maximize the students data handling abilities through different tabular and graphical tools
2.1 Methods Of Data Collection

We have already explained what it means by statistical data. Numerical facts or measurements
obtained in the course of enquiry in to a phenomenon, marked by uncertainty, constitute
statistical data. The statistical data may be already available or may have to be collected by an
investigator or an agency. Data termed primary when the reference is to data collected for the
first time by the investigator and is termed secondary when the data are taken from records or
data already available.
Method of primary data collection
In primary data collection, you collect the data yourself using methods such as interviews,
observations, laboratory experiments and questionnaires. The key point here is that the data you
collect is unique to you and your research and, until you publish, no one else has access to it.
There are many methods of collecting primary data and the main methods include:
Questionnaire: It is a popular means of collecting data, but is difficult to design and often
require many rewrites before an acceptable questionnaire is produced.
Advantages:
Can be used as a method in its own right or as a basis for interviewing or a telephone survey.
Can be posted, e-mailed or faxed.
Can cover a large number of people or organizations.
Wide geographic coverage.
Relatively cheap.
No prior arrangements are needed.
Avoids embarrassment on the part of the respondent.
Respondent can consider responses.
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Possible anonymity of respondent.

No interviewer bias.
Disadvantages:
Historically low response rate (although inducements may help).
Time delay whilst waiting for responses to be returned
Require a return deadline.
Several reminders may be required.
Assumes no literacy problems.
No control over who completes it.
Not possible to give assistance if required.
Replies not spontaneous and independent of each other.
Respondent can read all questions beforehand and then decide whether to complete or not.
For example, perhaps because it is too long, too complex, uninteresting, or too personal.
Interviewing is a technique that is primarily used to gain an understanding of the underlying
reasons and motivations for people‘s attitudes, preferences or behavior. Interviews can be
undertaken on a personal one-to-one basis or in a group. They can be conducted at work, at
home, in the street or in a shopping center, or some other agreed location.
Advantages:
Serious approach by respondent resulting in accurate information.
Good response rate.
Completed and immediate.
Possible in-depth questions.
Interviewer in control and can give help if there is a problem.
Can investigate motives and feelings.
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Can use recording equipment.
Characteristics of respondent assessed – tone of voice, facial expression, hesitation, etc.
If one interviewer used, uniformity of approach.
Used to pilot other methods.
Disadvantages:
Need to set up interviews.
Time consuming.
Geographic limitations.
Can be expensive.
Normally need a set of questions.
Respondent bias – tendency to please or impress, create false personal image, or end
interview quickly.
Embarrassment possible if personal questions.
Transcription and analysis can present problems– subjectivity.
If many interviewers, training required.
Observation: It involves recording the behavioral patterns of people, objects and events in a
systematic manner.
Diaries: A diary is a way of gathering information about the way individuals spend their time
on professional activities. They are not about records of engagements or personal journals of
thought! Diaries can record either quantitative or qualitative data, and in management
research can provide information about work patterns and activities.
Laboratory experiment: Conducting laboratory experiments on fields of chemical, biological
sciences and so on.
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Methods of secondary data collection
Secondary data analysis can be literally defined as second-hand analysis and is the analysis of
data or information that was either gathered by someone else (e.g., researchers, institutions, other
NGOs, etc.) or for some other purpose than the one currently being considered, or often a
combination of the two.
Some of the sources of secondary data are government document, official statistics, technical
report, scholarly journals, trade journals, review articles, reference books, research institutes,
universities, hospitals, libraries, library search engines, computerized data base and world wide
web ( ).
Advantage of secondary data
Secondary data may help to clarify or redefine the definition of the problem as part of the
exploratory research process.
Time saving
Does not involve collection data
Provides a larger database as compared to primary data
Disadvantage of secondary data
Lack of availability
Lack of relevance
Inaccurate data
Insufficient data
Variables and Attributes
A variable in statistics is any characteristic, which can take on different values when data are
collected. A quantitative or qualitative characteristic that varies from observation to observation
in the same group is called a variable. In case of quantitative variables, observations are made
using interval scales whereas in case qualitative variables nominal scales are used.
Conventionally, the quantitative variables are termed as variables and qualitative variables are
termed as attributes.The variables itself can be classified as continuous and discrete variables.
A) Continuous Variables: - are usually obtained by measurement not by counting. These are
variables which assume or take any decimal value when collected. The variables like age,
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time, height, income, price, temperature, and etc are all continuous since the data collected
from such variables can take decimal values.
Example variables such as age, height, length, volume, rate, time, amount of rainfall,
etc. are continuous variables.
B) Discrete Variables: - are obtained by counting. A discrete variable takes always whole
number values that are counted.
Example: Variables such as number of students, number of errors per page, number of accidents
on traffic line, number of defective or non defective items produced in production line.
Methods of Sampling
The various methods of sampling can be grouped under two broad heads:
1. Probability sampling (also known as random sampling) and
2. Non-probability (or non-random) sampling.
Random sampling techniques (probability sampling techniques) give a non- zero chance for all
elements to be included in the sample. In other words, there is no personal bias regarding the
selection. Five common random sampling techniques are:
Simple Random sampling
Systematic Random sampling
Stratified Random sampling
Cluster Random sampling
Multi-stage sampling
Non-random sampling technique is mostly known as non-probability sampling techniques and
in this case not all elements of a population have a known chance of inclusion or if some
outcomes have a zero chance of being selected as a sample. The most familiar examples of non-
random sampling techniques are:
Quota sampling
Convenience sampling
Volunteer sampling
Purposive sampling
Note: Data which are primary for one may be secondary for the other.
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2.2 Methods Of Data Presentation
So far you know how to collect data. So what do we do with the collected data next? Now you
have to 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.
This chapter introduces tabular and graphical methods commonly used to summarize both
qualitative and quantitative data. Tabular and graphical summaries of data can be obtained in
annual reports, newspaper articles and research studies. Everyone is exposed to these types of
presentations, so it is important to understand how they are prepared and how they will be
interpreted.
Modern statistical software packages provide extensive capabilities for summarizing data and
preparing graphical presentations. MINITAB, SPSS and STATA are three packages that are
widely available.
 Having collected and edited the data, the next important step is to organize it. That is to present it
in a readily comprehensible condensed form that aids in order to draw inferences from it. It is
also necessary that the like be separated from the unlike ones.
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:
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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.
Frequency distribution: is the organization of raw data in table form using classes and
frequencies.
2.2.1 Frequency Distribution
A frequency distribution is the organization of raw data in table form, using classes and
frequencies. There are three basic types of frequency distributions, and there are specific
procedures for constructing each type. The three types are categorical, ungrouped and grouped
frequency distributions.
The reasons for constructing a frequency distribution are as follows:

 To organize the data in a meaningful, intelligible way.
 To enable the reader to determine the nature or shape of the distribution
 To facilitate computational procedures for measures of average and spread
 To enable the researcher to draw charts and graphs for the presentation of data
 To enable the reader to make comparisons between different data set
There are three basic types of frequency distributions

 Categorical frequency distribution
 Ungrouped frequency distribution
 Grouped frequency distribution
There are specific procedures for constructing each type.
1) Categorical frequency Distribution:

Used for data that can be place in specific categories such as nominal, or ordinal. e.g. marital
status.
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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 Tally Frequency Percent

(1) (2) (3) (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;
fi
% * 100 Where fi= frequency of the ith 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 of 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.
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Class Tally Frequency Percent

(1) (2) (3) (4)
M 5 20
////
S //// // 7 28
D //// // 7 28
W //// 6 24
2) 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.
-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
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.
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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.
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, -----.
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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.
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.
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.
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5. The classes must be equal in width. The exception here is the first or last class. It is
possible to have ―below ..." or "... and above" class. This is often used with ages.
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 up, not
R
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.
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
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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
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
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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 R.f. C.R.f. (less
limit Mark than type) than type) than 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
2.2.2 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.
Diagrams are appropriate for presenting discrete data.
The three most commonly used diagrammatic presentation for discrete as well as
qualitative data are:
o Pie charts
o Pictogram
o Bar charts
24
1. 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 sector * 360
thewholequantity
Example: Draw a suitable diagram to represent the following population in a town.
Men Women Girls Boys
2500 2000 4000 1500
Solutions:
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.
Class Frequency Percent Degree
Men 2500 25 90
Women 2000 20 72
Girls 4000 40 144
Boys 1500 15 54
CLASS
Boy s Men
Girls Wo m en
2. Pictogram
25
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: a deck contains 52 playing cards, of which 13 are the same kind and 2 kinds have the
same color.
♠♠♠♠♠♠♠♠♠♠♠♠♠
♣♣♣♣♣♣♣♣♣♣♣♣♣
♥♥♥♥♥♥♥♥♥♥♥♥♥
♦♦♦♦♦♦♦♦♦♦♦♦♦
3. Bar 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
 Deviation o0r two way bar chart
 Broken bar chart
 Component or sub divided bar chart.
 Multiple bar charts.
26
a. Simple Bar Chart: - It is 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
Sales by product in 1957
30
25
Sales in $
20
15
10
5
0
A B C
product
b. 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.
27
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
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
c. 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.
28
Solution:
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
Graphical Presentation of data

- The histogram, frequency polygon and cumulative frequency graph or ogive 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.
29
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.
F
R Frequen
E cy
Q polygon
U
E
N
C
y
CLASS BOUNDER
Example: Construct a histogram to represent the previous data (example *).
Frequency Polygon:
- 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 *).
Solutions:
30
4
Value Frequency
0
2. 5 8. 5 14 .5 20 .5 26 .5 32 .5 38 .5 44 .5
Class Mid points
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.
Less than Ogive

20
F
r
15
e
q
u
10
e
n
c
5 y
More than Ogive
0
5.5 11.5 17.5 23.5 29.5 35.5 41.5
Class Boundaries
Example: Draw an ogive curve (less than type) for the above data. (Example *)
31
Excises: Consider the following set of data and construct

11 29 6 33 14 21 18 17 22 38
31 22 27 19 22 23 26 39 34 27
a) The simple frequency distribution table
b) The grouped frequency distribution table
c) Pie chart from grouped table
d) Bar chart from grouped table
e) Histogram
f) Frequency polygon
g) Ogjve curves, both less than and greater than
32
CHAPTER THREE
MEASURES OF CENTERAL TENDENCY

To rise students data analysis ability
To represent bulky data set by single average
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 posses 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.
Objectives:
 To comprehend the data easily.
 To facilitate comparison.
 To make further statistical analysis.
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.
33
Very often in statistics an algebraic expression of the form X1+X2+X3+...+XN is used in a

formula to compute a statistic. It is tedious to write an expression like this very often, so
mathematicians have developed a shorthand notation to represent a sum of scores, called
the summation notation.
The symbol
N
Xi
i 1
is 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:
34
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.
For example:
Properties of Summation
n
1. k nk where k is any constant
i 1
n n
2. kX i k Xi where k is any constant
i 1 i 1
n n
3. (a bX i ) na b Xi where a and b are any constant
i 1 i 1
n n n
4. (Xi Yi ) Xi Yi
i 1 i 1 i 1
The sum of the product of the two variables could be written:
Example: considering the following data determine

X Y
5 6
7 7
7 8
6 7
8 8
35
5
a) Xi
i 1
5
b) Yi
i 1
5
c) 10
i 1
5
d) (Xi Yi )
i 1
5
e) (Xi Yi )
i 1
5
f) X i Yi
i 1
5
2
g) Xi
i 1
5 5
h) ( X i )( Yi )
i 1 i 1
Solutions:
5
a) Xi 5 7 7 6 8 33
i 1
5
b) Yi 6 7 8 7 8 36
i 1
5
c) 10 5 *10 50
i 1
5
d) (Xi Yi ) (5 6) (7 7) (7 8) (6 7) (8 8) 69 33 36
i 1
5
e) (Xi Yi ) (5 6) (7 7) (7 8) (6 7) (8 8) 3 33 36
i 1
5
f) X i Yi 5* 6 7 * 7 7 *8 6 * 7 8*8 241
i 1
5
2
g) Xi 52 72 72 62 82 223
i 1
36
5 5
h) ( X i )( Yi ) 33 * 36 1188
i 1 i 1
3.2 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
The Median
Quantiles (Quartiles, Deciles and Percentiles)
The choice of these averages depends up on which best fit the property under discussion.
The Arithmetic Mean
Is defined as the sum of the magnitude of the items divided by the number of items.
The mean of X1, X2 ,X3 …Xn is denoted by A.M ,m or X and is given by:
X1 X2 ... Xn
X
n
n
Xi
i 1
X
n
If X1 occurs f1 times
If X2occurs f2 times
.
.
.
If Xn occurs fn times
k
fi X i k
i 1
Then the mean will be X k , where k is the number of classes and fi n
fi i 1
i 1
Example: Obtain the mean of the following number

2, 7, 8, 2, 7, 3, 7
37
Solution:
Xi fi Xi f i
2 2 4
3 1 3
7 3 21
8 1 8
Total 7 36
4
fi X i
i 1 36
X 4
5.15
7
fi
i 1
Arithmetic Mean for Grouped Data
If data are given in the shape of a continuous frequency distribution, then the mean is obtained as
follows:
k
fi X i th th
X i 1
k
, Where Xi =the class mark of the i class and fi = the frequency of the i class
fi
i 1
Example: calculate the mean for the following age distribution.

Class frequency
6- 10 35
11- 15 23
16- 20 15
21- 25 12
26- 30 9
31- 35 6
Solutions:
First find the class marks
Find the product of frequency and class marks
Find mean using the formula.
38
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
6
fi X i
i 1 1575
X 6
15.75
100
fi
i 1
Exercise:
1.Marks 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.
39
di Xi A
Xi di A
n n
Xi (d i A)
i 1 i 1
X
n n
n
di
i 1
X A
n
X A d
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 Xi A Xi di A
k k
fi X i f i (d i A)
i 1 i 1
X
n n
k
fi di
i 1
X A X A d
n
 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)
X i 1 i i i 1 i i
n n
k
f wd
X A i 1 i i
n
X A wd
Where: X i is the original class mark for the ith class.
40
d i is the transformed class mark for the ith class. (i 1,2,..., k )
A is an assumed mean usually the mean of the class marks.
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, di 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.
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
(Xi X) 0.
i 1
2. The sum of the squared deviations of a set of items from their mean is the minimum. i.e.
n n
( Xi X )2 (Xi 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
41
Then the mean of all the observation in all groups often called the combined mean is given
by:
k
Xini
X1n1 X 2 n 2 .... X k n k i 1
Xc k
n1 n 2 ...n k
ni
i 1
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.
Solutions:
Females Males
X1 60 X2 72
n1 30 n2 70
X 1 n1 X 2 n2 X i ni
i 1
Xc 2
n1 n2 ni
i 1
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 65.Latter it was discovered that
one weight was misread as 40 instead of 80 k.g. Calculate the correct average weight.
Solutions:
42
(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
Solutions:
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?
Solutions:
a).NewMean OldMean 10 500 10 510
b).NewMean 5 * OldMean 5 * 500 2500
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.
43
 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 i Wi
i 1
Xw n
Wi
i 1
Example:
A student obtained the following percentage in an examination:
English 60, Biology 75, Mathematics 63, Physics 59, and chemistry 55.Find the students
weighted arithmetic mean if weights 1, 2, 1, 3, 3 respectively are allotted to the subjects.
Solutions:
5
X i Wi
i 1 60 * 1 75 * 2 63 * 1 59 * 3 55 * 3 615
Xw 5 61.5
1 2 1 3 3 10
Wi
i 1
Merits and Demerits of Arithmetic Mean

Merits:
It is rigidly defined.
It is based on all observation.
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.
44
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.
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 * X 2 * ... * X n
 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
ni1
The logarithm of the G.M of a set of observation is the arithmetic mean of their logarithm.
n
1
G.M Anti log( log X i )
n i 1
Example:
Find the G.M of the numbers 2, 4, 8.
Solutions:
3 3
G.M n X1 * X 2 * ... * X n 2*4*8 64 4
Remark: The Geometric Mean is useful and appropriate for finding averages of ratios.
The Harmonic Mean
The harmonic mean of X1, X2 , X3 …Xn is denoted by H.M and given by:
45
n
H .M n
, This is called simple harmonic mean.
1
i 1 Xi
In a case of frequency distribution:
k
n
H .M k
,n fi
fi i 1
i 1 Xi
If observations X 1 , X 2 ,..., X n have weights W1 ,W2 ,..., Wn respectively, then their harmonic mean
is given by
n
Wi
i 1
H .M n
, This is called Weighted Harmonic Mean.
Wi
i 1 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
2
H.M 12km / hr
1 1
10 15
The Mode
- 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.
46
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 X 1 , X 2 ,..., X n is usually denoted by X̂ .
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:
X̂ = the mode of the distribution
W = the size of the modal class
f mo = frequency of the modal class
f1 =frequency of the class preceding to the modal class

f 2 = frequency of the class following the modal class
1 f mo f1
2 f mo f2
Note: The modal class is a class with the highest frequency.
Example: Following is the distribution of the size of certain farms selected at random from a
district. Calculate the mode of the distribution.
47
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
Solutions:
45-55 is the modal class, since it is a class with the highest frequency
Lmo 45
w 10
1 f mo f1 2
2 f mo f2 26
f mo 31
f1 29
f2 5
ˆ 45 10 2
X
2 26
45.71
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
48
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.
The Median
In a distribution median, denoted by X̂ , 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 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 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
49
~ 1
X (X n X n )
2 [2] [
2
1]
1
( X [3] X [ 4 ] )
2
1
( 5 6 ) 5.5
2
b) Order the data :1, 2, 3, 5, 8
Here n=5
~ X
X n 1
[ ]
2
X[3]
3
Median for grouped data
If data are given in the shape of continuous frequency distribution, the median is defined as:
~ w n
X Lmed ( c)
f med 2
Where
Lmed = lower class boundary of the median class
W = the size of the median class

n = total number of observations
c = the cumulative frequency (less than type) preceding to the median class
f med = the frequency of the median class
Remark: The median class is the class with the smallest cumulative frequency (less than type)
greater than or equal to n 2 .
Example: Find the median of the following distribution.
Class Frequency
40-44 7
45-49 10
50
50-54 22
55-59 15
60-64 12
65-69 6
70-74 3
Solutions:
First find the less than cumulative frequency.
Identify the median class.
Find median using formula.
Class Frequency Cumu.Freq

(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.
L 49.5, w 5
med
n 75, c 17, f 22
med
51
~
X L w ( n c)
med f 2
med
49.5 5 (37.5 17)
22
54.16
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.
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 are quartiles,
deciles, and percentiles and are collectively known as quantiles.
1 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 Q1, 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 Q3 has 75% items whose values are less than or equal to it.
To find Qi (i=1, 2, 3) we count iN 4 of the classes beginning from the lowest class.
52
For grouped data: we have the following formula
Q L w ( iN c) , i 1,2,3
i Qi f 4
Qi
Where
LQi = lower class boundary of the i th quartile class
W = the size of the quartile class

N = total number of observations
c = the cumulative frequency (less than type) preceding to the i th quartile class
f Qi = the frequency of the i th quartile class
Remark:
The quartile class (class containing Qi ) is the class with the smallest cumulative frequency (less
than type) greater than or equal to iN 4 .
2 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 D1, D2,…, D9 often
called the first, the second,…, the ninth deciles respectively.
To find Di (i=1, 2,..9) we count iN 10 of the classes beginning from the lowest class.
For grouped data: we have the following formula
w iN
Di LD i ( c) , i 1,2,...,9
f Di 10
Where
LDi = lower class boundary of the i th Deciles class
W = the size of the i th Deciles class

c = the cumulative frequency (less than type) preceding to the i th Deciles class
f Di = the frequency of the i th Deciles class
53
Remark:
The i th Deciles class (class containing Di) is the class with the smallest cumulative frequency
(less than type) greater than or equal to iN 10 .
3 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, 2,..,99) we count iN 100 of the classes beginning from the lowest class.
- For grouped data: we have the following formula
w iN
Pi L Pi ( c) , i 1,2,..., 99
f Pi 100
Where
LPi = lower class boundary of the i th percentile class
W = the size of the i th percentile class

c = the cumulative frequency (less than type) preceding to the i th percentile class
f Pi = the frequency of the i th percentile class
Remark:
The percentile class (class containing Pi ) is the class with the smallest cumulative frequency (less
than type) greater than or equal to iN 100 .
Example: Considering the following distribution

Calculate:
a) All quartiles.
b) The 7th decile.
c) The 90th percentile.
54
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
Solutions:
First find the less than cumulative frequency.
Use the formula to calculate the required quantile.
Values Frequency Cum.Freq (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
55
a) Quartiles:
i. Q1
determine the class containing the first quartile.
N
123.25
4
170 180 is the class containingthe first quartile.
w N
Q1 LQ1 ( c)
LQ 170 , w 10 fQ 4
1
1
N 493 , c 88 , fQ 72 10
1 170 (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 sec ond quartile.
LQ 2
190 , w 10
N 493 , c 244 , fQ 2
107
w 2* N
Q2 LQ ( c)
2
fQ 42
10
170 ( 246 .5 244 )
72
190 .23
iii. Q3
Determine the class containing the third quartile.
56
3* N
369.75
4
200 210 is the class containingthe third quartile.
LQ 3
200 , w 10
N 493 , c 351 , fQ
3
49
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 7
190 , w 10
N 493 , c 244 , fD 7
107
w 7* N
D7 LD ( c)
7
f D 10
7
10
190 (345.1 244)
107
199.45
c) P90
determine the class containing the 90th percentile.
57
90 * N
443.7
100
220 230 is the class containingthe 90 th percentile.
LP 90
220 , w 10
N 493 , c 434 , fP
90
3107
w 90 * N
P90 LP ( c)
90
fP 100
90
10
220 (443.7 434)
31
223.13
Activity2: Compute D5, D6 P70, P80, P81 and P91

Also compare
i) Q1, and P25
j) Q2, D5, and P50
k) Q3 and P75
58
CHAPTER FOUR
MEASURES OF DISPERSION (VARIATION)

To rise students data analysis ability
To represent bulky data set by single average
To compare variability’s of different data sets
To measure particular observations standard potions relative to average
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.
Objectives of measuring Variation:
To judge the reliability of measures of central tendency

To control variability itself.
To compare two or more groups of numbers in terms of their variability.
To make further statistical analysis.
4.2 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
59
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.
4.3 Types of Measures of Dispersion
Various measures of dispersions are in use. The most commonly used measures of dispersions
are:
1) Range and relative range
2) Quartile deviation and coefficient of Quartile deviation
3) Mean deviation and coefficient of Mean deviation
4) Standard deviation and coefficient of variation.
1. The Range (R)
The range is the largest score minus the smallest score. It is a quick and dirty 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 smallest observation
Range for grouped data:
If data are given in the shape of continuous frequency distribution, the range is computed as:
60
R UCLk LCL1 , UCLk is upperclasslim it of the last class.

UCL1 is lower class lim it of the first class.
This is some times expressed as:
R Xk X1 , X k is class mark of the last class.

X 1 is classmark of the first class.
Merits and Demerits of range
Merits:
It is rigidly defined.
It is easy to calculate and simple to understand.
Demerits:
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.
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. Find the relative range of the above two distribution.(exercise!)
2. If the range and relative range of a series are 4 and 0.25 respectively. Then what is the value
of:
61
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 sametime , one can obtainthe following value
L 10 and S 6
3. The Quartile Deviation (Semi-inter quartile range), 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
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- 150 17
150- 160 29
160- 170 42
62
170- 180 72
180- 190 84
190- 200 107
200- 210 49
210- 220 34
220- 230 31
230- 240 16
240- 250 12
Solutions:
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
Remark: Q.D or C.Q.D includes only the middle 50% of the observation.
4. 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
63
n
Xi X
i 1
M .D( X )
n
For the case of frequency distribution it is given as:
k
fi X i X
i 1
M .D( X )
n
General Steps to calculate M.D ( X ):
1. Find the arithmetic mean, X

2. Find the deviations of each reading from X .
3. 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
~ i 1
M .D( X )
n
k ~
fi X i X
~ i 1
M .D( X )
n
~
General Steps to calculate M.D ( X ):
~
1. Find the median, X
64
~
2. Find the deviations of each reading from X .
c) Mean Deviation about the mode
Denoted by M.D( X̂ ) and given by
n
Xi ˆ
X
ˆ)
M.D( X i 1
n
k
fi X i Xˆ
M .D ( Xˆ ) i 1
n
Steps to calculate M.D ( X̂ ):
1. Find the mode, X̂

2. Find the deviations of each reading from X̂ .
Examples:
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
65
Remark: Mean deviation about the median is always minimum.
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
M .D( Xˆ ) 1.4
C.M .D( Xˆ ) 0.28
Xˆ 5
Exercise: Identify the merits and demerits of Mean Deviation
5 The Variance
a) Population Variance
67
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".
2 1
Population Varince (Xi ) 2 , i 1,2,..... N
N
For the case of frequency distribution it is expressed as:
2 1
Population Varince fi ( X i ) 2 , i 1,2,.....k
N
b) 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 S2 (Xi X ) 2 , i 1,2,....., n
n 1
For the case of frequency distribution it is expressed as:
1
Sample Varince S 2 fi ( X i X ) 2 , i 1,2,.....k
n 1
We usually use the following short cut formula.
n
2
Xi nX 2
S2 i 1
, for raw data.
n 1
k
2
fi X i nX 2
S2 i 1
, for frequencydistribution.
n 1
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.
2
Populations tan dard deviation
Samples tan dard deviation s S2
68
Examples: 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.
Xi(C.M) 42 47 52 57 62 67 72 Total
fi(Xi- X)2 1183 640 198 60 588 864 867 4400
Solutions:
Xi 5 10 12 17 Total
(Xi- X)2 36 1 1 36 74
1. X 11
n
(Xi X )2
74
S2 i 1
24.67.
n 1 3
S S2 24.67 4.97.
2. X 55
Class Frequency
40-44 7
45-49 10
50-54 22
55-59 15
60-64 12
65-69 6
70-74 3
69
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
( X i X )2 ( X i A) 2
1. ,A X
n 1 n 1
2. For normal (symmetric distribution the following holds.
a. Approximately 68.27% of the data values fall within one standard deviation of the mean. i.e.
with in (X S, X S)
b. Approximately 95.45% of the data values fall within two standard deviations of the mean. i.e.
with in (X 2S , X 2S )
c. Approximately 99.73% of the data values fall within three standard deviations of the mean.
i.e. with in ( X 3S , X 3S )
2. 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 S
b) kX1 , kX 2 , .....kX n kS
c) a kX1 , a kX 2 , .....a kX n k S
Exercise: Verify each of the above relationship, considering k and a as constants.
70
4.4 Chebyshev's Theorem
For any data set ,no matter what the pattern of variation, the proportion of the values that fall
with in k standard deviations of the mean or (X kS , X kS ) will be at least 1 1 k 2 ,

where k is an number greater than 1. i.e. the proportion of items falling beyond k standard
deviations of the mean is at most 1 k 2
Example: Suppose a distribution has mean 50 and standard deviation 6.What percent of the
numbers are:
a) Between 38 and 62
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
k 12 S 12 6 2
 Applying the above theorem at least (1 1 k 2 ) * 100% 75% of the numbers lie between 38
and 62.
b) Similarly done.
c) It is just the complement of a) i.e. at most 1 k 2 *100% 25% of the numbers lie less than 32
or more than 62.
d) Similarly done.
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.
71
a. If 10 is 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 = kS 2*3 6

2. a. They will remain the same.
b. New standard deviation kS 5 *10 50
Exercise:
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.
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
In which firm A or B is there greater variability in individual wages?
72
Solutions:
Calculate coefficient of variation for both firms.
SA 10
C.VA *100 *100 19.05%
XA 52.5
SB 11
C.VB *100 *100 23.16%
XB 47.5
Since C.VA < C.VB, in firm B there is greater variability in individual wages.
2. 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)
4.5 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.
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.
73
Examples:
1. Two sections were given introduction to statistics examinations. The following information
was given.
Value Section 1 Section 2
Mean 78 90
Stan. Deviation 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.
XA X1 90 78
ZA 2
S1 6
XB X2 95 90
ZB 1
S2 5
 Student A performed better relative to his section because the score of student A is 2 standard
deviation above the mean score of his section. while, the score of student B is only 1 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:
Value Group one Group two
Mean 10.4 min 11.9 min
Stan.dev. 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?
74
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
XA X1 9.2 10.4
ZA 1
S1 1.2
XB X2 9.3 11.9
ZB 2
S2 1.3
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.
4.6 Measure of shape
4.6.1 Moments
- If X is a variable that assume the values X1, X2,…..,Xn then
1. The rth moment is defined as:
r r r
r X1 X2 ... X n
X
n
n
r
Xi
i 1
n
- For the case of frequency distribution this is expressed as:
k
r
fi X i
Xr i 1
n
75
- 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)
- Denoted by Mr and defined as:

n n
(Xi X )r (Xi X )r
i 1 (n 1) i 1
Mr
n n n 1
k
fi ( X i X )r
i 1
Mr
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 Denoted by Mr is defined as:
n n
(Xi A) r (Xi A) r
' i 1 (n 1) i 1
Mr
n n n 1
k
fi ( X i A) r
' i 1
Mr
n
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.
76
n
r
Xi
Xr i 1
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
(Xi X )r
i 1
Mr
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
(Xi A) r
i 1
Mr
n
' (2 3)3 (3 3)3 (7 3)3
M3 21
3
4.6.2 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.
77
Mean Mode 3 * ( Mean Median )

Measures of Skewness
Normal
Mode=mean=median
Right(+) skewed Distribution
Left(-)skewedDistribution
- Denoted by 3
- 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 M3
3 32
.
M2 ( 2 )3 2 3
78
Where is the population standard deviation.
The shape of the curve is determined by the value of 3
If 3 0 then the distribution is positivelyskewed.
If 3 0 then the distribution is symmetric.
If 3 0 then the distribution is negativelyskewed.
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?
Solutions:
Use the Pearsonian coefficient of skewness
Mean Mode 32 30.5
3 0.15
S tan dard deviation 10
3 0 The distribution is positivelyskewed.
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.
Solutions:
~
Given: 3 0.5, X Q2 11 Required: Q1 Q3
and
Q1 Q3 28.......... .......... .......(*)
(Q3 Q2 ) (Q2 Q1 ) Q3 Q1 2Q2

3 0.5
Q3 Q1 Q3 Q1
79
Substituting the given values, one can obtain the following

Q3 Q1 12.......... .......... .......... .....(**)
Solving (*) and (*) simultaneously we obtain the following values
Exercise
3. Some characteristics of annually family income distribution (in Birr) in two regions is 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?
4. 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.
5. 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?
80
4.6.3 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
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.
The moment coefficient of kurtosis:
Denoted by 4 and given by
M4 M4
4 2 4
M2
Where: M 4 is the fourth moment about the mean
M 2 is the second moment about the mean

is the population standard deviation
The peakdness depends on the value of 4 .
If 4 3 then the curve is leptokurtic.

If 4 3 then the curve is mesokurtic.
If 4 3 then the curveis platykurtic.
81
Examples:
1. If the first four central moments of a distribution are:
M1 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:
a) M3 60
3 32
0.94 0
M2 163 2
The distribution is negatively skewed.

M4 162
4 2
0.6 3
b) M2 162
The curve is platykurtic.
2. The median and the mode of a mesokurtic distribution are 32 and 34 respectively. The 4 th
moment about the mean is 243. Compute the Pearsonian coefficient of skewness and identify
the type of skewness. Assume (n-1 = n).
3. 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? Solutions (exercise).
82
CHAPTER FIVE
ELEMENTARY PROBABILITY THEORY

To introduce probability concepts
To measure confidence or uncertainty levels of situations
To introduce counting techniques of events
To capable students to differentiate independent and dependent events
5.1 Introduction
If an experiment is conducted under homogeneous and similar conditions, we come across two
types of situations or phenomena. The results or the outcome is unique or certain which are
called as deterministic phenomena by which the result can be predicted certainly from an
experiment performed. For instance, in case of ohm‘s law voltage, V = I*R, Force, F = m
1 2
*a , the distance (S) covered by a particle after a time t is given by S= Vt at ,…, etc are
2
deterministic phenomena because if we know the right hand side, we certainly determine the
left hand side.
The results or the outcomes of an experiment are not unique, but can be one of the several
possible outcomes; this type of model is called probabilistic or non-deterministic phenomena.
Example -In random tossing of a coin, we are not sure of getting head or tail.
- A sex of new born baby may be male or female
A manufacturer cannot be ascertained (sure) of the future demand of his product with certainty.
As everybody knows our world is a full of uncertainty ,even ,no one knows exactly what
comes after a minute, an hour…etc. but we can guess the chance that something will happen.
The word probability or chance is very commonly used in day-to-day conversation, and
generally, people have some idea what it means. Terms like possible, probable, or likely and so
on, have all similar meanings.
Probability: can be defined as a measure of the likelihood that a particular event will occur or it
is a science of decision making with calculated risk in face of uncertainty. It is a numerical
measure with a value between 0 and 1 of such likelihood. Where the probability of zero
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indicates that the given event cannot occur and the Probability of one assures certainty of such an
occurrence.
5.2 Definitions Of Some Probability Terms
A) Experiment: An experiment is any activity that generates outcome(s). For example, tossing
of a fair coin is considered as a statistical experiment. For example, tossing of a fair coin, rolling
a die etc.
-Any process of observation or measurement or any process which generates well defined
outcome.
-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.
C) Outcome :The result of a single trial of a random experiment
D) Sample Space: Set of all possible outcomes of a probability experiment
E) 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 space or impossibleevent
Remark: If S (sample space) has n members then there are exactly 2n subsets or events.
F) Equally Likely Events: Events which have the same chance of occurring.
G) Complementary Event: the complement of an event A means non-occurrence of A and is denoted
by A' , or Ac , or A contains those points of the sample space which don’t belong to A.
H) Elementary Event: an event having only a single element or sample point.
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I) Mutually Exclusive Events: Two events which cannot happen at the same time.
J) Independent Events: Two events are independent if the occurrence of one does not affect the
probability of the other occurring.
K) 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}
b) S={(HH),(HT),(TH),(TT)}
c) S={t /t≥0}
 Sample space can be
 Countable ( finite or infinite)
 Uncountable.
5.3 Fundamental Principles of Counting Techniques
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
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- Combination rule
If the number of possible outcomes in an experiment is small, it is relatively easy to list and
count all possible events. When there are large numbers of possible outcomes an enumeration of
cases is often difficult, tedious, or both. Therefore, to overcome such problems one can use
various counting techniques or rules.
Addition rule:
Suppose that a procedure designated by 1, can be performed in n 1 ways. Assume that second
procedure designated by 2 can be performed in n 2 ways. Suppose further more that it is not possible
both procedures 1 and 2 are performed together. The number of ways in which we can perform 1 or 2
procedures is n 1 + n 2 ways. This can be generalized as follows if there are k procedures and i th
procedure may be performed in n i ways, i=1, 2, …, k , then the number of ways in which we perform
k
procedure 1 or 2 or … or k is given by n 1 +n 2 +…+ n k = ni , assuming that no two procedures
i 1
performed together.
Example 5.1 Suppose that we are planning a trip and are deciding between bus and train
transportation. If there are 3 bus routes and 2 train routes to go from A to B, find the available
routes for the trip. There are 3+2 = 5 possible routes for someone to go from A to B.
The Multiplication 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?
Solutions:
Tea
Bread
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Cake
Sandwich
Coeffee
Bread
Cake
Sandwitch
Milk
Bread
Cake
Sand witch
 There are nine possibilities.
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.
Solutions
a)
1st digit 2nd digit 3rd digit 4th digit
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5 5 5 5
There are four steps

1. Selecting the 1st digit, this can be made in 5 ways.
2. Selecting the 2nd digit, this can be made in 5 ways.
3. Selecting the 3rd digit, this can be made in 5 ways.
4. Selecting the 4th digit, this can be made in 5 ways.
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
1. Selecting the 1st digit, this can be made in 5 ways.
2. Selecting the 2nd digit, this can be made in 4 ways.
3. Selecting the 3rd digit, this can be made in 3 ways.
4. Selecting the 4th digit, this can be made in 2 ways.
5 * 4 * 3 * 2 120 differentcards are possible.
Permutation
An arrangement of n objects in a specified order is called permutation of the objects.

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!*k 2 * ... * k n
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
2.
Here n 10
Of which 2 are C , 2 are O, 2 are R ,1E ,1T ,1I ,1N
K1 2, k 2 2, k3 2, k 4 k5 k6 k7 1
U sin g the 3rd rule of permutation , there are
10!
453600 permutations.
2!*2!*2!*1!*1!*1!*1!
Exercises:
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
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
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i. Begins with a consonant?

ii. Ends with a vowel?
iii. Has a consonant and vowels alternating?
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.
Solutions:
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.
Combination Rule
n
The number of combinations of r objects selected from n objects is denoted by n Cr or and
r
is given by the formula:
n n!
r (n r )!*r!
Examples:
1. In how many ways a committee of 5 people be chosen out of 9 people?
Solutions:
n 9, r 5
n n! 9!
126 ways
r (n r )!*r! 4!*5!
90
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.
Solutions:
n 15 of which 2 are defectiveand 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:
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 3
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Exercises:
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?
5.4 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.
5.4.1 The classical approach
This approach is used when:

- 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:
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NA No. of outcomes favourableto A n( A)

P( A)
N Total number of outcomes n( S )
Examples:
1. A fair die is tossed once. What is the probability of getting
a) Number 4?
b) An odd number?
c) An even number?
d) 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
NA n( A) 1
n( A)
P( A) 16
n( S )
b) Let A be the event of odd numbers
A 1,3,5
NA n( A) 3
n( A)
P( A) 36 0.5
n( S )
c) Let A be the event of even numbers
A 2,4,6
NA n( A) 3
n( A)
P( A) 3 6 0.5
n( S )
d) Let A be the event of number 8
A Ø
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NA n( A) 0
n( A)
P( A) 06 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.
30 50
Total way in which A occur * NA 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
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.
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30 50
0 10
30 50
*
n( A) 0 10
P ( A) 0.00624
n( S ) 80
10
Exercises:
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?
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.
5.4.2 The Frequentist 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 favourable 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.
95
NA 60
P( A) lim 0.0006
N N 100,000
5.4.3 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.
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.
Remark: Venn-diagrams can be used to solve probability problems.
In general p( A B) p( A) p( B) p( A B)
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Subjective Approach
A probability derived from an individual's personal judgment about whether a specific outcome
is likely to occur. Subjective probabilities contain no formal calculations and only reflect the
subject's opinions and past experience. Subjective probabilities differ from person to
person. Because the probability is subjective, it contains a high degree of personal bias. An
example of subjective probability could be asking Arsenal fan, before the football season
starts, the chances of Arsenal winning the world champions. While there is no absolute
mathematical proof behind the answer to the example, fans might still reply in actual percentage
terms, such as the Arsenal having the 95% chance of winning the world champions.
Events as a set: If A and B are two events then
 A  B: the happening of at least event A or B.
 A  B: the simultaneously happening of both events A and B.
 Ac : A does not happen (complement of event A).
 Ac  Bc: neither A nor B happens
 Ac  B: B occurs alone or exactly B occurs or only B occurs.
 (A  Bc)  (Ac  B): exactly one of the two events A and B happens
The probability of occurrence of at least one of the two events A and B is given by:
P (A  B) P( A) P( B) P( A  B) if A and B are mutually exclusive events, then
P(A  B)= P(A)+P(B)
5.5 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 dependant 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
97
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
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
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given p ( A) 0.25, p( B) 0.75, p A B 0.20

Re quired p B A
p A B 0.20
pB 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
given p ( A) 0.60, p A B 0.54

Re quired p B A
p A B 0.54
pB A 0.90
p A 0.60
3. 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?
Solution; Exercise
Note; for any two events A and B the following relation holds.
pB p B A .p A p B A' . p A'
Probability of Independent Events
Two events A and B are independent if and only if pA B p A .p B
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Here pAB p A, PB A pB
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 pA B
a. pA B p B A .p A 4 10 3 9 2 15
b. pA B p A .p B 4 10 4 10 4 25
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CHAPTER SIX
RANDOM VARIABLES AND PROBABILITY DISTRIBUTIONS

To introduce probability distributions
To measure confidence or uncertainty levels of situations through distributions
To summarize probabilities of common natures in distributions
To capable students to differentiate discrete or continuous random variables
6.1 Introduction
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. X is a function X: S  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, 4, 5}
X assumes a specific number of values with some probabilities.
Random variables are of two types:
1. Discrete random variable: 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.
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Number of defective items in a given company.

Number of bacteria per two cubic centimeter of water.
2. Continuous random variable: are variables that can assume all values between any two give
values.
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 is 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
PX x 18 38 38 18
Probability distribution is denoted by P for discrete and by f for continuous random variable.
Properties of Probability Distribution:
1.
P( x) 0, if X is discrete.
f ( x) 0, if X is continuous.
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P X x 1 , if X is discrete.
x
2.
f ( x)dx 1 , if is continuous.
x
Note:
1. If X is a continuous random variable then
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.
6.2. Introduction to expectation

Definition:
1. 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
2. Let X be a continuous random variable assuming the values in the interval (a, b) such that
103
b b
f ( x)dx 1 , then E( X ) x f ( x)dx
a a
Examples:
1. What is the expected value of a random variable X obtained by tossing a coin three times
where X is the number of heads
Solution:
First construct the probability distribution of X
X x 0 1 2 3
PX x 18 38 38 18
E( X ) X 1P( 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$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
PX x 0.1 0.2 0.3 0.2 0.15 0.05
What is expected that an average donor to contribute?
Solution:
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X x $1 $2 $5 $10 $15 $20 Total
PX 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
Mean and Variance of a random variable

Let X is given random variable.
1. The expected value of X is its mean Mean of X E(X )
2. The variance of X is given by:
Variance of X var( X ) E ( X 2 ) [ E ( X )]2
Where:
n
2
E( X 2 ) xi P ( X xi ) , if X is discrete
i 1
x 2 f ( x)dx , if X is continuous.
x
Examples:
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
PX 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
2. 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
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There are some general rules for mathematical expectation, Let X and Y are random variables
and k is a constant.
1. E(k ) k ,
2. Var (k ) 0,
3. E(kX ) kE( X )
4. Var (kX ) k 2Var ( X )
5. E( X Y ) E( X ) E(Y )
6.3. Common Probability Distributions
6.3.1 Common Discrete Probability Distributions
a. 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.
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Definition: The outcomes of the binomial experiment and the corresponding

probabilities of these outcomes are called Binomial Distribution.
Let P the probability of success
q 1 p the probability of failure on any given trial
Then the probability of getting x successes in n trials becomes:
n x n x
P( X x) p q , x 0,1,2,...., n
x
And this is some times 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 x n x
P( X x) p q , x 0,1,2,3,4.
x
4
P( X 3) 0.5 4 0.25
3
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?
107
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 x n x
P( X x) p q , 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
c) P(X 3) ?
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
d) P(X 5) ?
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P( X 5) 1 P( X 5)
1 {P( X 5) P( X 6)}
1 (0.010 0.001)
0.989
Exercises:
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
b. Poisson Distribution
The Poisson distribution is also used to represent the probability distribution of a discrete random
variable. It is employed in describing random events that occur rarely over a continuum of time
or space. The Poisson distribution bears a close similarity to the binomial distribution.
Suppose that we are interested in the number of occurrences of an event E in a time period of
length t. This time period can be split into n equal intervals, each of length t/n. These n intervals
can be treated as n trials by Bernoulli process. But there is difficult. Since the event occurs at
various points of time, it can occur twice or more in one of the trials of length t/n.
109
In case of binomial distribution the event is dichotomous, and hence there is no possibility of
such multiple occurrences within a single trial. In order to overcome this difficulty we make n
larger and larger. When n is large, the trials are shorter in terms of length of time. As a result, the
probability of occurrence of an event in a single trial would be smaller. It is equivalent of saying
that it is a rare event. The binomial distribution can still be used to represent the distribution of
such random events. However, the computations become tedious since n is very large. This can
be explained by example.
Suppose that the number of insects caught in a trap is being studied and that the data are
collected on the number of insects caught per hour. Assume that the probability that an insect
will be caught in any single minute is 0.06. Assume further that the events of insects being
trapped are mutually independent and the probability p = 0.06 remains same for all the minutes.
We may use the binomial distribution to calculate the number of insects caught per hour by
considering each minute as a separate Bernoulli trial. If x is the number of insects caught in a
60 x 60 x
minute then we have: P[X=x] = 0.06 0.94
x
Instead of dividing the hour into minutes the seconds may be used as basic units. Then the value
of p would be reduced to, p=0.06/60=0.001. Considering each second as a Bernoulli trial, we
would have a sample size 60 60=3600 for a period of one hour. The binomial distribution
3600 x 3600 x
would now be: P[X=x] = 0.001 0.999
x
Thus when n becomes larger and larger the computations using binomial become tedious.
n x n x
Fortunately, it has been shown by Poisson that the value of p q approaches the value of
x
X np
np e
, when n becomes large and p becomes small in such a way that the equality, np =
x!
is maintained.
x
e
The Poisson distribution is given by the pmf, P[X=x] = . Where, = np = mean number of
x!
times an event occurs. x = the number of times an event occur. e= Naperian base = 2.7182…
110
The value of e can be obtained directly from mathematical tables. In case of Poisson
distribution the counts of alternative events, i.e., failures are not of interest. This is a contrast
between binomial and Poisson distributions. For Poisson distribution all that we need is np, the
mean number of successes. We need not know about n and p individually. Thus, the Poisson
distribution is determined by the parameter . .The special property of Poisson distribution is that
its mean and variance are same to . i.e. mean = variance = . (in magnitude)
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!
2. 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
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a. 6 or fewer
b. 7 or more
c. Exactly 8……. (Exercise)
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:
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
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6.3.2 Common Continuous Probability Distributions
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
2
Where E ( X ), Variance( X )
2
and are the Parametersof the Normal Distribution.
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.

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
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X
Z
1 2
1 2
z
f ( z) e
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=0and 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 )
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:
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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:
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
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P(0 Z z ) 0.4726 and from table

P(0 Z 1.92) 0.4726
z 1.92.....uniquenessof Areea.
b) The area to the left of z is 0.9868

Solution
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 86.0
Solution
X is normal with mean, =80, and standard 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 62.4.Find its standard deviation if 20.0% of the area under
the normal curve lies to the right of 72.9
Solution
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
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0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09
0.0 0.0000 0.0040 0.0080 0.0120 0.0160 0.0199 0.0239 0.0279 0.0319 0.0359
0.1 0.0398 0.0438 0.0478 0.0517 0.0557 0.0596 0.0636 0.0675 0.0714 0.0753
0.2 0.0793 0.0832 0.0871 0.0910 0.0948 0.0987 0.1026 0.1064 0.1103 0.1141
0.3 0.1179 0.1217 0.1255 0.1293 0.1331 0.1368 0.1406 0.1443 0.1480 0.1517
0.4 0.1554 0.1591 0.1628 0.1664 0.1700 0.1736 0.1772 0.1808 0.1844 0.1879
0.5 0.1915 0.1950 0.1985 0.2019 0.2054 0.2088 0.2123 0.2157 0.2190 0.2224
0.6 0.2257 0.2291 0.2324 0.2357 0.2389 0.2422 0.2454 0.2486 0.2517 0.2549
0.7 0.2580 0.2611 0.2642 0.2673 0.2704 0.2734 0.2764 0.2794 0.2823 0.2852
0.8 0.2881 0.2910 0.2939 0.2967 0.2995 0.3023 0.3051 0.3078 0.3106 0.3133
0.9 0.3159 0.3186 0.3212 0.3238 0.3264 0.3289 0.3315 0.3340 0.3365 0.3389
1.0 0.3413 0.3438 0.3461 0.3485 0.3508 0.3531 0.3554 0.3577 0.3599 0.3621
1.1 0.3643 0.3665 0.3686 0.3708 0.3729 0.3749 0.3770 0.3790 0.3810 0.3830
1.2 0.3849 0.3869 0.3888 0.3907 0.3925 0.3944 0.3962 0.3980 0.3997 0.4015
1.3 0.4032 0.4049 0.4066 0.4082 0.4099 0.4115 0.4131 0.4147 0.4162 0.4177
1.4 0.4192 0.4207 0.4222 0.4236 0.4251 0.4265 0.4279 0.4292 0.4306 0.4319
1.5 0.4332 0.4345 0.4357 0.4370 0.4382 0.4394 0.4406 0.4418 0.4429 0.4441
1.6 0.4452 0.4463 0.4474 0.4484 0.4495 0.4505 0.4515 0.4525 0.4535 0.4545
1.7 0.4554 0.4564 0.4573 0.4582 0.4591 0.4599 0.4608 0.4616 0.4625 0.4633
1.8 0.4641 0.4649 0.4656 0.4664 0.4671 0.4678 0.4686 0.4693 0.4699 0.4706
1.9 0.4713 0.4719 0.4726 0.4732 0.4738 0.4744 0.4750 0.4756 0.4761 0.4767
2.0 0.4772 0.4778 0.4783 0.4788 0.4793 0.4798 0.4803 0.4808 0.4812 0.4817
2.1 0.4821 0.4826 0.4830 0.4834 0.4838 0.4842 0.4846 0.4850 0.4854 0.4857
2.2 0.4861 0.4864 0.4868 0.4871 0.4875 0.4878 0.4881 0.4884 0.4887 0.4890
2.3 0.4893 0.4896 0.4898 0.4901 0.4904 0.4906 0.4909 0.4911 0.4913 0.4916
2.4 0.4918 0.4920 0.4922 0.4925 0.4927 0.4929 0.4931 0.4932 0.4934 0.4936
2.5 0.4938 0.4940 0.4941 0.4943 0.4945 0.4946 0.4948 0.4949 0.4951 0.4952
2.6 0.4953 0.4955 0.4956 0.4957 0.4959 0.4960 0.4961 0.4962 0.4963 0.4964
2.7 0.4965 0.4966 0.4967 0.4968 0.4969 0.4970 0.4971 0.4972 0.4973 0.4974
2.8 0.4974 0.4975 0.4976 0.4977 0.4977 0.4978 0.4979 0.4979 0.4980 0.4981
2.9 0.4981 0.4982 0.4982 0.4983 0.4984 0.4984 0.4985 0.4985 0.4986 0.4986
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3.0 0.4987 0.4987 0.4987 0.4988 0.4988 0.4989 0.4989 0.4989 0.4990 0.4990
From the table of Normal curves it can be seen that 68.26% of the area lies within the range of
, 95.46% within the range of 2 , and 99.74% within the range of 3 . This is an
important property of normal distribution which is frequently used in statistical inference.
The normality of a distribution can be tested using several methods. Three important methods
can be mentioned. They are graphic methods, Pearson‘s test and goodness of fit. On the basis of
Pearson‘s coefficients, 1 & 2 we can say whether a distribution is normal or not. If
1 0& 2 = 3, the distribution is said to be normal. (See chapter four about skewness and
kurtosis)
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
6. 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.
Solution (Exercise)
2. Chi-Square Distribution: 2
Distribution
The square of a standard normal variable is called a chi-square variate with one degree of
freedom. Thus if is a random variable following normal distribution with mean and standard
119
deviation , then is a standard normal variate. is a chi-square variate with 1 degree
of freedom. If are independent random variables following normal distribution

with means and standard deviations respectively then the variate
2
this is the sum of
the square of independent standard normal variates, follows chi-square distribution with
degree of freedom.
Applications of chi-square distribution
Chi-square distribution has a number of applications. Some of which are listed below
Chi-square test of goodness of fit
Chi-square test for independence of attributes
To test whether the population has a specified value of the variance
3. Student’s distribution
In probability and statistics, Student's t-distribution (or simply the t-distribution) is a
probability distribution that arises in the problem of estimating the mean of a normally
distributed population when the sample size is small. It is the basis of the popular Student's t-
tests for the statistical significance of the difference between two sample means, and for
confidence intervals for the difference between two population means. The Student's t-
distribution is a special case of the generalized hyperbolic distribution.
The derivation of the t-distribution was first published in 1908 by William Sealy Gosset, while
he worked at a Guinness Brewery in Dublin. Due to proprietary issues, the paper was written
under the pseudonym Student. The t-test and the associated theory became well-known through
the work of R.A. Fisher, who called the distribution "Student's distribution".
Student's t-distribution is the probability distribution of the ratio
where
Z is normally distributed with expected value 0 and variance 1;

V has a chi-square distribution with ν degrees of freedom;
Z and V are independent.
120
Derivation
Suppose X1, ..., Xn are independent random variables that are normally distributed with expected
value μ and variance σ2. Let
be the sample mean, and
be the sample variance. It can be shown that the

random variable
has a chi-square distribution with n − 1 degrees of freedom. It is readily

shown that the quantity
is normally distributed with mean 0 and variance 1, since the sample

mean is normally distributed with mean μ and standard error . Moreover, it is
possible to show that these two random variables—the normally distributed one and the
chi-square-distributed one—are independent. Consequently the pivotal quantity,
which differs from Z in that the exact standard deviation is replaced by the random variable ,
has a Student's t-distribution as defined above. Notice that the unknown population variance σ2
does not appear in T, since it was in both the numerator and the denominators, so it canceled.
Technically, has a distribution by Cochran's theorem. Gosset's work showed
that T has the probability density function
with ν equal to n − 1.
This may also be written as
Where B is the Beta function. The distribution of T is now called the t-distribution. The
parameter ν is called the number of degrees of freedom. The distribution depends on ν, but not μ
or σ; the lack of dependence on μ and σ is what makes the t-distribution important in both theory
and practice.
121
CHAPTER SEVEN
SAMPLING AND SAMPLING DISTRIBUTION

To introduce sampling techniques
To measure confidence or uncertainty levels of statistic to estimate parameter
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.
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.
6. Errors in sample survey:
122
There are two types of errors

a) Sampling error:
- 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 for Sampling
- Reduced cost
- Greater speed
- Greater accuracy
- Greater scope
- More detailed information can be obtained.
- There are two types of sampling.
7.2 Random Sampling or probability sampling
- 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
1. Simple Random Sampling:
- 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. Or
- All elements in the population have the same pre-assigned non-zero probability to be included in
to the sample.
123
- Simple random sampling can be done either using the lottery method or table of random
numbers.
2. Stratified 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).
3. Cluster 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 with in 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.
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.
- Let
124
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) .
th
- The j unit is selected at first and then ( j k )th , ( j 2k )th ,....etc until the required
sample size is reached.
7.3 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.
Examples:
Judgment sampling.
Convenience sampling
Quota Sampling.
1. Judgment Sampling
In this case, the person taking the sample has direct or indirect control over which items are
selected for the sample.
2. Convenience Sampling
In this method, the decision maker selects a sample from the population in a manner that is
relatively easy and convenient.
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.
1. Suppose simple random sampling is used
We have Nn possible samples if sampling is with replacement.
125
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.
7.4 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.
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
2
population Variance 8
Take samples of size 2 with replacement and construct sampling distribution of the sample mean.
126
Solution:
N 5, n 2
 We have Nn 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
6 1
7 2
8 3
127
9 4
10 5
11 4
12 3
13 2
14 1
a) Find the mean of X, say X
X i fi 250
X
10
fi 25
2
b) Find the variance of X , say X
2 (Xi X
)2 fi 100 2
X
4
fi 25
Remark:
1.In general if sampling is with replacement
2
2
X
n
2. If sampling is without replacement
2
2 N n
X
n N 1
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 posses 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
128
3. The variance of X is equal to the population variance divided by the sample size, i.e.
2
2
X
n
2
X ~ N( , )
n
X
Z ~ N (0,1)
n
7.5 Central Limit Theorem
2
Given a population of any functional form with mean and finite variance , the sampling
distribution of X , computed from samples of size n from the population will be approximately
2
normally distributed with mean and variance n , when the sample size is large.
As the sample size increases, the shape of the distribution of the sample means taken from a
population with mean and standard deviation of will approach a normal distribution. As
previously shown, this distribution will have a mean and a standard deviation .
The central limit theorem can be used to answer question about sample means in the same
manner that the normal distribution can be used to answer questions about individual values. The
only difference is that a new formula must be used for the values. It is
Note that: is the sample mean and the denominator is the standard error of the mean.
When using the central limit theorem, one must remember two things:
1. When the original variable is normally distributed, the distribution of the sample means
will be normally distributed, for any sample size
129
2. When the distribution of the original variable departs from normality, a sample size of 30
or more is needed to use the normal distribution as an approximation for the distribution
of the sample mean. The larger the sample, the better the approximation will be
Example 7.1: The blood cholesterol levels of a population of workers have mean 202 and
standard deviation 14. If a sample of 36 workers is selected, approximate the probability that the
sample mean of their blood cholesterol levels will lie between 198 and 206.
Solution: It follows from the central limit theorem that is approximately normal with mean
and standard deviation . Thus the standardize variable
has an approximately standard normal distribution. To compute ,

first we must write the inequality in terms of the standardized variable . This results in
the equality
7.6 Size of Sample

An important decision that has to be taken in adopting a sampling technique is about the size of
the sample. Size of sample means the number of sampling units selected from the population for
investigation. Experts have expressed different opinions on this point. For example, some have
suggested that the sample size should be 5 per cent of the size of population while others are of
the opinion that sample size should be at least 10 per cent. However, these views are of little use
in practice because no hard and fast rule can be laid down that sample size should be 5 per cent,
10 per cent or 25 per cent of the universe size. It may point out that more size alone does not
ensure representativeness. A smaller sample, but well selected sample, may be superior to a
larger but badly selected sample. If the size of the sample is small it may not represent the
universe and the inference drawn about the population may be misleading. On the other hand, if
the size of sample is very large, it may be too burdensome financially, require a lot of time and
may have serious problems of managing it. Hence the sample size should neither be too small
130
nor too large. It should be ‗optimum‘. Optimum size, according to Parten, is one that fulfils the
requirements of efficiency, representativeness, reliability and flexibility.
The following factors should be considered while deciding the sample size: The size of the
Universe, The Resources Available, The Degree of Accuracy or Precision Desired, Homogeneity
or Heterogeneity of the Universe, Nature of Study, Method of Sampling Adopted, and Nature of
Respondents.
Determination of Sample Size
A number of formulae have been devised for determining the sample size depending upon the
availability of information. A few formulae are given below:
2
zs
n= , Where
d
n = Sample size
z= Value at a specified level of confidence or desired degree of precision.
s= Standard deviation of the population
d= Difference between population mean and sample mean.
Example Determine the sample size if s = 6, population mean = 25, sample mean = 23 and the
desired degree of precision is 99 per cent.
2
ZS
n= , s= 6, d= 25-23 = 2, z = 2.576 (at 1% level the z value is 2.576)
d
2
2.576 6
Substituting the values: n 7.7282 59.72 or 60
2
131
CHAPTER EIGHT
ESTIMATION AND HYPOTHESIS TESTING
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.
Data analysis is the process of extracting relevant information from the summarized data.
8.1 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.
1) Point Estimation
It is a procedure that results in a single value as an estimate for a parameter.
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.
132
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.
Point and Interval estimation of the population mean: µ

 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 means, .That is
xi
X is a point estimator of the population mean.
n
 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
133
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 n , and approaches a normal distribution as n gets large. 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 that P ( Z Z Z 2 ) 1
2
Where: is the probability that the parameter lies outside the interval
134
Z 2 stands for the standard normal variable to 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 a (1 )100% confidence interval 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 a (1 )100% confidence interval for . 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:
2
If sample size is small and the population variance, 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 a100 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.
Examples:
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.
135
Solution:
a)
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
32 1.96 * 4.2 25
32 1.65
(30.35, 33.65)
b)
X 32, 4.2, 1 0.99 0.01, 2 0.005

Z 2 2.58 from table.
The requiredint 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 from table.
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)
136
That is, we can be 95% confident that the mean decrease in blood pressure is between 1.28 and
3.28 points.
8.2 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:
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.
Alternative 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.
Types and size of errors:

- Testing hypothesis is based on sample data which may involve sampling and non sampling
errors.
137
- 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
- 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, can not 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.
General steps in hypothesis testing:

1. The first step in hypothesis testing is to specify the null hypothesis (H0) and the alternative
hypothesis (H1).
2. The next step is to select a significance level,
3. Identify the sampling distribution of the estimator.
4. The fourth step is to calculate a statistic analogous to the parameter specified by the null
hypothesis.
5. Identify the critical region.
6. Making decision.
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7. Summarization of the result.
Hypothesis testing about the population mean, :
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. H0 : 0 vs H1 : 0
2. H0 : 0 vs H1 : 0
3. H0 : 0 vs H1 : 0
CASES:
2
Case 1: When sampling is from a normal distribution with known
- The relevant test statistic is
X
Z
n
- After specifying we have the following regions (critical and acceptance) on the standard
normal distribution corresponding to the above three hypothesis.
Summary table for 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
139
X 0
Where: Z cal
n
2
Case 2: When sampling is from a normal distribution with 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
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 2
Z cal , if is known.
n
X 0 2
, if is unknown.
S n
- The decision rule is the same as case I.
140
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
H0 : 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.
Step 4: identify the critical region.
Here we have two critical regions since we have two tailed hypothesis
The critical region is t cal t 0.005 (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
tcal 0.76
S n 0.25 10
Step 6: Decision
Accept H0 , since tcal is in the acceptance region.
141
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
H0 : 1600 vs H1 : 1600
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.
3. 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
142
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.
Solution (exercise)
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.
B1 B2 . . Bj . Bc Total
A B
A1 O11 O12 O1j O1c R1
A2 O21 O22 O2j O2c R2
.
.
Ai Oi1 Oi2 Oij Oic Ri
.
.
Ar Or1 Or2 Orj Orc
Total C1 C2 Cj N
143
- 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.
2
- The statistic is given by:
2
r c (Oij eij ) 2 2
cal ~ ( r 1)(c 1)
i 1j 1 eij
Where Oij the numberof unitsthat 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.
Cj the j th columntotal.
n total number of oservations
Remark:
r c r c
n Oij eij
i 1j 1 i 1j 1
- The null and alternative hypothesis may be stated as:

H 0 : There is no association between A and B.
H1 : not H 0 ( There is association between A and B).
144
Decision Rule:
2
- Reject H0 for independency at level of significance if the calculated value of exceeds the
tabulated value with degree of freedom equal to (r 1)(c 1) .
2
r c (Oij eij ) 2 2
Reject H 0 if cal ( r 1)( c 1) at
i 1j 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.
Bold Not
Father Son
Bold 85 59
Not 65 91
Using 5% test whether there is association between father and son regarding boldness
Solution:
H 0 : There is no association between Father and Son regarding boldness.

H1 : not H 0
- First calculate the row and column totals

R1 144, R2 156, C1 150, C2 150
- Then calculate the expected frequencies( eij‘s)
Ri * C j
eij
n
R1 * C1 144 *150
e11 72
n 300
145
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 2 (Oij eij ) 2
cal
i 1j 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
2
0.05 (1) 3.841 from table.
2 2
- The decision is to reject H0 since cal 0.05 (1)
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
146
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 association between the size of the family and the level of
educationattained 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.
2
2 3 (Oij eij ) 2
cal
i 1j 1 eij
(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
2
0.05 (2) 5.99 from table.
147
2 2
- The decision is to reject H0 since cal 0.05 (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.
148
CHAPTER NINE
SIMPLE LINEAR REGRESSION AND CORRELATION ANALYSIS
9.1 Introduction
Regression analysis, in the general sense, means the estimation of or prediction of the unknown
values of one variable from known values of the other variable. In Regression analysis there are
two types of variables. The variable whose value is influenced or to be predicted is called
dependent (regressed or explained) variable and the variable which influences the values or is
used for prediction, is called independent variable (regressor or Predictor or explanatory). If the
Regression curve is a straight line, we say that there is linear relationship between the variables
under study, non-linear elsewhere.
When only two variables are involved, the functional relationship is known as simple regression.
If the relationship between the two variables is a straight line, it is known as simple linear
regression; otherwise it is called as simple non-linear regression. When there are more than two
variables and one of them is assumed dependent upon the other, the functional relationship
between the variables is known as multiple regressions. Moreover, correlation analysis is
concerned with mathematical measure of the extent or degree of relationship between two
variables.
Example
Regression analysis is performed if one wants to know relationship between
a) Income Vs consumption
b) Sales of ice-cream Vs temperature of the day
c) Industrial production Vs consumption of electricity
d) Yield of crops Vs amount of rainfall or type of fertilizer or humidity,..., etc.
149
9.2. 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 relation ship, it is advisable to prepare scatter plot before fitting the model.
- The linear model is given by:
Y= X
Where, = y intercept or regression constant,

= slope of the line or regression coefficient,
= Random disturbance term (Error term) = (y- ŷ ).
Basic Assumptions of SLR

1. There is linear relationship between dependent variable y and explanatory variable x
2
2. Expected value of error term is zero and its variance is constant ( ). Hence error term is
2
approximately normally distributed with mean zero and constant variance ( ).
2
i.e. ~ N (0, )
The y-intercept and the slope are the population parameters. We generally obtain the
estimates of and from the sample. The estimator of and are denoted by ˆ and ˆ ,
respectively. Thus the fitted regression line is
ŷ = ˆ + ˆ x
The values of ˆ and ˆ are obtained using the method of least squares. According to the
principle of least squares, one should select a and b such that e 2 will be as small as possible,
that is, we minimize SSE= e 2 = S= y ˆ ˆx 2
150
To minimize this function, first we take the partial derivatives of SSE with respect to ˆ and ˆ .
Then the partial derivatives are equal to zero separately. These will result in the equations known
as normal equations.
For the straight line, y= ˆ + ˆ x the normal equations are
y nˆ ˆx
xy ˆ x ˆ x2
By solving these normal equations, we can get the values of ˆ and ˆ .

The best estimate of b is given by
x y
xy n xy x y
ˆ n
2 2
2
x n x2 x
x
n
And, the best estimate of is given by
ˆ y ˆx
The regression line indicates the average value of the dependent variable Y associated with a
particular value of the independent variable X. The slope ˆ , hereafter referred to as regression
coefficient which indicates the change in Y with a unit change in X.
Example1
The following table gives the ages and blood pressure of 10 women
Age(x) 56 42 36 47 49 42 60 72 63 55
Blood 147 125 118 128 145 140 155 160 149 150
pressure(y)
a) Determine the least square regression equation of blood pressure on age of women
b) Estimate the blood pressure of a women whose age is 45 years.
Solution
151
x 522 y = 1417 xy =75188 x = 52.2
x 2 = 28348 y 2 = 202493 y 141.7
The estimated value of ˆ and ˆ can be obtained as respectively
ˆ n xy x y 10 * 75188 522 *1417

2 2
1.11
n x ( x) 10 * 28348 (522) 2
The best estimate of is given by

ˆ y bx 141.7 1.11 52.5 83.76
a) The least square regression equation of blood pressure on age of women is given by
ŷ = ˆ + ˆx , where ŷ is estimated blood pressure and x is age of woman

=83.76+1.11x
b) Estimated blood pressure of a woman whose age 45 years is given as follows.
When x= 45
ŷ = ˆ + ˆx
=83.76+1.11*45=133.71
Example2. From the following data obtain the regression equation of Y on X
Sales(X) : 91 97 108 121 67 124 51 73 111 57

Purchase(Y)): 75 75 69 97 70 91 39 61 80 47
Solution
n= 10 , x 900
,
y 700 , xy 66900 , x2 87360
ˆ n xy x y 10 * 66900 900 * 700

2 2
0.61
n x ( x) 10 * 87360 (900) 2
1 n n
1
ˆ y bx ( yi b xi ) (700 0.61 900) 15.1
n i i 1 10
152
y 15.1 0.61x
9.3 Correlation Analysis

Correlation analysis is concerned with measuring the strength (degree) of the relationship
between two or more variables. It is used if we are interested in knowing the extent of
interdependence between two or more variables.
a) Karl Pearson’s coefficient of (simple) correlation
The Karl Pearson correlation coefficient denoted by r ( x, y ) or rxy or simply r, is defined as
the ratio of the covariance between X and Y to the product of their standard deviations:
cov( x, y ) ( xi x)( yi y)
r
x y
( xi x) 2 ( yi y)2
The simplified formula used for computational purpose is

x y
xy n xy x y
r n
x
2
y
2
(n x2 ( x) 2 )(n y2 ( y)2 )
2 2
x y
n n
An increase in one variable may cause an increase in the other variable, or a decrease in one
variable may cause decrease in the other variable. When the variables move in the same direction
like this they are said to be positively correlated. The positive correlation may be termed as
direct correlation. If a decrease in one variable causes an increase in the other variable or visa
versa, the variables are said to be negatively correlated. The negative correlation may be termed
as inverse correlation. In case the two variables are not at all related they are said to be
independent or uncorrelated.
Example
i. Amount of rainfall and yield of crop(up to a point) has positive correlation
153
ii. Price and demand of a commodity has negative correlation.
Properties of simple correlation coefficient

Coefficient of correlation lies between –1≤ r ≤1
If r = 0 indicate that there is no linear relationship between two variables.
If r = -1 or +1 indicate that there is perfect negative (inverse) or positive (direct) linear
relationship between two variables respectively.
A coefficient of correlation(r) that is closes to zero shows the relationship is quite weak,
where as r is closest to +1 or -1, shows that the relationship is strong.
Note that
 The strength of correlation does not depend on the positiveness and negativeness of r .
 The slope of simple linear regression (coefficient of regression) and correlation
coefficient should be the same in sign.
The correlation between two variables is linear if a unit changes in one variable result in a
constant change in the other variable. Correlation can be studied through plotting scattered
diagrams
154
Example1:
Calculate simple correlation coefficient ( r ) for the data on advertising and sales expenditure and
interpret it.
Advertising(x): 39 65 62 90 82 75 25 98 36 78
Sales (y) : 47 53 58 86 62 68 60 91 51 84
Solution
x 650 , y 660 , xy 45604 , x2 47648 , y2 45784

10 * 45604 650 * 660 27040
r 0.78 0.8
(10 * 47648 (650) 2 )(10 * 45784 (660) 2 ) 53980* 22240
There is strong positive (direct) linear relationship between sales and advertisement since simple
correlation coefficient approaches to 1.
Example 2.
Calculate and interpret simple correlation coefficient for data on blood pressure and age of 10
women:
Age(x) 56 42 36 47 49 42 60 72 63 55
Blood pressure(y) 147 125 118 128 145 140 155 160 149 150
Solution
x 522 y = 1417 xy =75188 x = 52.2
x 2 = 28348 y 2 = 202493 y 141.7
10 * 75188 522 *1417 12206

r 0.89 0.9
2 2
(10 * 28348 (522) )(10 * 202493 (1417) ) 10996*17041
 There is strong direct linear relationship between blood pressure and age of women, since
correlation coefficient approaches to +1.
155
b) Coefficient of determination
It is defined as the proportion of the variation in the dependent variable Y that is explained, or
accounted for, by the variation of the independent variable X. Its value is the square of the
coefficient of correlation, thus we denote it by r 2 and it is usually expressed in the form of
percentage.
Example1: Compute and interpret coefficient of determination for the above example on age and
blood pressure.
Solution
Given that simple correlation coefficient between blood pressure and age is 0.89, hence
coefficient of determination is square of the coefficient of correlation ( r 2 )=(0.89)2=79.21%
which implies that 79.21% variation in the blood pressure of women is accounted for, by the
variation of the age of women.
c) Rank Correlation
Sometimes we come across statistical series in which the variables under consideration are not
capable of quantitative measurement, but can be arranged in serial order. This happens when we
dealing with qualitative characteristics(attributes ) such as beauty, efficient, honest, intelligence
….etc., in such case one may rank the different items and apply the spearman method of
rank difference for finding out the degree of relationship. The greatest use of this method
(rank correlation) lies in the fact that one could use it to find correlation of qualitative
variables, but since the method reduces the amount of labor of calculation, it is sometimes
used also where quantitative data is available. It is used when statistical series are ranked
according to their magnitude and the exact size of individual item is not known. Spearman‘s
correlation coefficient is denoted by rs .
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
156
2
6 di
rs 1
n n2 1
Where: rs = Coefficient of rank correlation
d = is the difference between paired ranks

n = the number of pairs
If the actual data is given, rank it in ascending or descending order and follow the above
procedures.
 Note that the values of rank correlation ( rs ) also lies between -1 and +1 inclusive.
Example1.
Ten competitors in a beauty contest are ranked by two judges in the following order. Compute
and interpret opinion of two judges with regard to beauty out looking.
1st judge(x) 1 6 5 10 3 2 4 9 7 7
2nd judge(y) 3 5 8 4 7 10 2 1 6 9
d=(x-y) -2 1 -3 6 -4 -8 2 8 1 -2
d2 4 1 9 36 16 64 4 64 1 4
Solution
d i2 203
2
6 di 6 * 203
rs 1 2
1 0.2303
nn 1 10 102 1
 Hence the pair of judges has opposite (divergent) tastes for beauty since rank correlation
coefficient is negative.
Example 2:
Calculate rank correlation coefficient between advertisement cost and sales from the following
data and interpret it.
Advertisement(x): 39 65 62 90 82 75 25 98 36 78
Sales (y) : 47 53 58 86 62 68 60 91 51 84
157
Solution
Rank of X : 8 6 7 2 3 5 10 1 9 4
Rank of Y : 10 8 7 2 5 4 6 1 9 3
di Xi Yi : -2 -2 0 0 -2 1 4 0 0 1
d i2 : 4 4 0 0 4 1 16 0 0 1
2
di 30
6 d2 6 x 30 2 9
n 10 rs 1 2
1 1 0.82
nn 1 10 102 1 11 11
rs = 0.82; it implies that there is strong positive linear relationship between advertisement cost
and sales since correlation coefficient approaches to +1.
158
Exercise
1. calculate and interpret the Karl Pearson‘s correlation coefficient for the ages of husband and
wife for the data given below
Age of husband 23 27 28 29 30 31 33 35 36 39
Age of wife 18 22 23 24 25 26 28 29 30 32
2. Obtain the regression equation for costs related to age of cars for the following data on the
ages of cars of a certain make and annual maintenance costs. Estimate the maintenance cost
of cars when age of cars is 12 years.
Age of cars(in years)(x) 2 4 6 8

Maintenance cost(in 100 birr)(y) 10 20 25 30
3. Explain the meaning and significance of the concept of simple linear regression and
correlation analysis.
4. How do you interpret a calculated value of Karl person‘s correlation coefficient? Discuss in
particular the values of r= 0, r=-1 and +1.
5. Obtain the regression equation for costs related to age of cars for the following data on the
ages of cars of a certain make and annual maintenance costs. Estimate the maintenance cost
of cars when age of cars is 12 years.
Age of cars(in years)(x) 2 4 6 8

Maintenance cost(in 100 birr)(y) 10 20 25 30
159
6. Assuming that we conduct an experiment with eight fields planted with corn, amount of nitrogen
fertilizer applied is given in kgs and corn yield per hectare, the resulting corn yield and amount of
fertilizer applied shown in the table below .
Amount of Nitrogen 22 26 23 29 20 15 18 32
fertilizer(kg)(x)
Corn yield/hectare(y) 120 130 160 180 120 110 118 190
a) Compute a linear regression equation of corn yield per hectare on amount of nitrogen
fertilizer applied and also by using equation predict corn yield for a field treated with
34kgs of fertilizer.
b) Calculate and interpret simple correlation coefficient between amount of fertilizer applied and
corn yield obtained, also obtain coefficient of determination
7 . The ranks of 15 students in two subjects A and B are given below. Calculate and interpret the
rank correlation coefficient.
Rank in A (x) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Rank in B (y) 10 7 2 6 4 8 3 1 11 15 9 5 14 12 13
160
References
 Bluman, A.G. (1995). Elementary Statistics: A Step by Step Approach (2nd edition).
Wm. C. Brown Communications, Inc.
 Eshetu Wencheko (2000). Introduction to Statistics. Addis Ababa University Press.
 Gupta, C.B. and Gupta, V. (2004). An Introduction to Statistical Methods. Vikas

Publishing House, Pvt. Ltd, India.
 Freund, J.E and Simon, G.A. (1998). Modern Elementary Statistics (9th Edition).
 Snedecor, G.W and Cochran, W.G. (1980). Statistical Methods (7th edition).
 Spiegel, M.R. and Stephens, L.J. (2007). Schaum's Outline of Statistics, Schaum's Outline
Series (4th edition). McGraw-Hill.
 Kinnfe Abraha: Basic Statistics, A textbook for Quantitative Method II
161

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Introduction to Statistics and probability

INTRODUCTION TO CONCEPT OF STATISTICS

Objectives of this chapter:

1.1 Definition and classification of Statistics

Definition: We can define statistics in two ways.

1. Of 50 randomly selected students at biology department of Addis Ababa university 28 of

1.2 Stages of Statistical Investigation

1.3 Definition of some Statistical terms

a. Population: It is the collection of all possible observations of a specified characteristic of

Activities1: write similarities vs differences of the following concepts in space provided.

Census survey & sampling------------------------------- ---------------------------------------

Parameter & statistic ----------------------------------- ------------------------------------------

Data & variable --------------------------------- -------------------------------------------

1.4 Types of Variables or Data

1.5 Applications, Uses and Limitations of Statistics

INTRODUCTION TO METHODS OF DATA COLLECTION AND PRESENTATION

Objectives of this chapter are:

2.1 Methods Of Data Collection

Possible anonymity of respondent.

Historically low response rate (although inducements may help).

Time delay whilst waiting for responses to be returned

Require a return deadline.

Several reminders may be required.

Assumes no literacy problems.

No control over who completes it.

Not possible to give assistance if required.

Replies not spontaneous and independent of each other.

Serious approach by respondent resulting in accurate information.

Good response rate.

Completed and immediate.

Possible in-depth questions.

Interviewer in control and can give help if there is a problem.

Can investigate motives and feelings.

Can use recording equipment.

Characteristics of respondent assessed – tone of voice, facial expression, hesitation, etc.

If one interviewer used, uniformity of approach.

Used to pilot other methods.

Need to set up interviews.

Normally need a set of questions.

Embarrassment possible if personal questions.

Transcription and analysis can present problems– subjectivity.

If many interviewers, training required.

Methods of secondary data collection

2.2 Methods Of Data Presentation

The presentation of data is broadly classified in to the following two categories:

2.2.1 Frequency Distribution

The reasons for constructing a frequency distribution are as follows:

There are three basic types of frequency distributions

There are specific procedures for constructing each type.

1) Categorical frequency Distribution:

Class Tally Frequency Percent

Class Tally Frequency Percent

2) Ungrouped frequency Distribution:

Step 4: Compute the frequency.

Mark Tally Frequency

3) Grouped frequency Distribution:

Guidelines for classes

Steps for constructing Grouped frequency Distribution

1. Find the largest and smallest values

Step 8: tally the data.