Introductory
Business Statistics
, Introductory
Business Statistics
Thomas K. Tiemann
Copyright © 2010 by Thomas K. Tiemann
For any questions about this text, please email:
Editor-In-Chief: Thomas K. Tiemann
Associate Editor: Marisa Drexel
Editorial Assistants: Jaclyn Sharman, LaKwanzaa Walton
The Global Text Project is funded by the Jacobs Foundation, Zurich, Switzerland.
This book is licensed under a Creative Commons Attribution 3.0 License
, This book is licensed under a Creative Commons Attribution 3.0 License
Table of Contents
What is statistics? ............................................................................................................................................ 5
1. Descriptive statistics and frequency distributions................................................................ 10
Descriptive statistics....................................................................................................................................... 12
2. The normal and t-distributions............................................................................................. 18
Normal things................................................................................................................................................. 18
The t-distribution........................................................................................................................................... 22
3. Making estimates...................................................................................................................26
Estimating the population mean.................................................................................................................... 26
Estimating the population proportion........................................................................................................... 27
Estimating population variance..................................................................................................................... 29
4. Hypothesis testing ................................................................................................................ 32
The strategy of hypothesis testing.................................................................................................................. 33
5. The t-test.................................................................................................................................41
The t-distribution............................................................................................................................................ 41
6. F-test and one-way anova......................................................................................................52
Analysis of variance (ANOVA)........................................................................................................................ 55
7. Some non-parametric tests....................................................................................................59
Do these populations have the same location? The Mann-Whitney U test.................................................. 60
Testing with matched pairs: the Wilcoxon signed ranks test........................................................................ 63
Are these two variables related? Spearman's rank correlation..................................................................... 66
8. Regression basics...................................................................................................................70
What is regression? ........................................................................................................................................ 70
Correlation and covariance............................................................................................................................. 79
Covariance, correlation, and regression......................................................................................................... 81
Introductory Business Statistics 3 A Global Text
, This book is licensed under a Creative Commons Attribution 3.0 License
About the author
Author, Thomas K. Tiemann
Thomas K. Tiemann is Jefferson Pilot Professor of Economics at Elon University in North Carolina, USA. He
earned an AB in Economics at Dartmouth College and a PhD at Vanderbilt University. He has been teaching basic
business and economics statistics for over 30 years, and tries to take an intuitive approach, rather than a
mathematical approach, when teaching statistics. He started working on this book 15 years ago, but got sidetracked
by administrative duties. He hopes that this intuitive approach helps students around the world better understand
the mysteries of statistics.
A note from the author: Why did I write this text?
I have been teaching introductory statistics to undergraduate economics and business students for almost 30
years. When I took the course as an undergraduate, before computers were widely available to students, we had lots
of homework, and learned how to do the arithmetic needed to get the mathematical answer. When I got to graduate
school, I found out that I did not have any idea of how statistics worked, or what test to use in what situation. The
first few times I taught the course, I stressed learning what test to use in what situation and what the arithmetic
answer meant.
As computers became more and more available, students would do statistical studies that would have taken
months to perform before, and it became even more important that students understand some of the basic ideas
behind statistics, especially the sampling distribution, so I shifted my courses toward an intuitive understanding of
sampling distributions and their place in hypothesis testing. That is what is presented here—my attempt to help
students understand how statistics works, not just how to “get the right number”.
Introductory Business Statistics 4 A Global Text
Business Statistics
, Introductory
Business Statistics
Thomas K. Tiemann
Copyright © 2010 by Thomas K. Tiemann
For any questions about this text, please email:
Editor-In-Chief: Thomas K. Tiemann
Associate Editor: Marisa Drexel
Editorial Assistants: Jaclyn Sharman, LaKwanzaa Walton
The Global Text Project is funded by the Jacobs Foundation, Zurich, Switzerland.
This book is licensed under a Creative Commons Attribution 3.0 License
, This book is licensed under a Creative Commons Attribution 3.0 License
Table of Contents
What is statistics? ............................................................................................................................................ 5
1. Descriptive statistics and frequency distributions................................................................ 10
Descriptive statistics....................................................................................................................................... 12
2. The normal and t-distributions............................................................................................. 18
Normal things................................................................................................................................................. 18
The t-distribution........................................................................................................................................... 22
3. Making estimates...................................................................................................................26
Estimating the population mean.................................................................................................................... 26
Estimating the population proportion........................................................................................................... 27
Estimating population variance..................................................................................................................... 29
4. Hypothesis testing ................................................................................................................ 32
The strategy of hypothesis testing.................................................................................................................. 33
5. The t-test.................................................................................................................................41
The t-distribution............................................................................................................................................ 41
6. F-test and one-way anova......................................................................................................52
Analysis of variance (ANOVA)........................................................................................................................ 55
7. Some non-parametric tests....................................................................................................59
Do these populations have the same location? The Mann-Whitney U test.................................................. 60
Testing with matched pairs: the Wilcoxon signed ranks test........................................................................ 63
Are these two variables related? Spearman's rank correlation..................................................................... 66
8. Regression basics...................................................................................................................70
What is regression? ........................................................................................................................................ 70
Correlation and covariance............................................................................................................................. 79
Covariance, correlation, and regression......................................................................................................... 81
Introductory Business Statistics 3 A Global Text
, This book is licensed under a Creative Commons Attribution 3.0 License
About the author
Author, Thomas K. Tiemann
Thomas K. Tiemann is Jefferson Pilot Professor of Economics at Elon University in North Carolina, USA. He
earned an AB in Economics at Dartmouth College and a PhD at Vanderbilt University. He has been teaching basic
business and economics statistics for over 30 years, and tries to take an intuitive approach, rather than a
mathematical approach, when teaching statistics. He started working on this book 15 years ago, but got sidetracked
by administrative duties. He hopes that this intuitive approach helps students around the world better understand
the mysteries of statistics.
A note from the author: Why did I write this text?
I have been teaching introductory statistics to undergraduate economics and business students for almost 30
years. When I took the course as an undergraduate, before computers were widely available to students, we had lots
of homework, and learned how to do the arithmetic needed to get the mathematical answer. When I got to graduate
school, I found out that I did not have any idea of how statistics worked, or what test to use in what situation. The
first few times I taught the course, I stressed learning what test to use in what situation and what the arithmetic
answer meant.
As computers became more and more available, students would do statistical studies that would have taken
months to perform before, and it became even more important that students understand some of the basic ideas
behind statistics, especially the sampling distribution, so I shifted my courses toward an intuitive understanding of
sampling distributions and their place in hypothesis testing. That is what is presented here—my attempt to help
students understand how statistics works, not just how to “get the right number”.
Introductory Business Statistics 4 A Global Text
