Statistics for Business and Economics (14e, Metric Version)

Statistics for
Business and Economics (14e)
Metric Version

Anderson, Sweeney, Williams, Camm, Cochran, Fry, Ohlmann

© 2020 Cengage Learning

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e, Metric Version)

Chapter 3 - Descriptive Statistics:

Numerical Measures
3.1 - Measures of Location
3.2 - Measures of Variability
3.3 - Measures of Distribution Shape, Relative
Location, and Detecting Outliers
3.4 - Five-Number Summaries and Box Plots
3.5 - Measures of Association Between Two Variables
3.6 - Data Dashboards: Adding Numerical Measures
to Improve Effectiveness

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 Statistics for Business and Economics (14e, Metric Version)

Numerical Measures
• If the measures are computed for data from a
sample, they are called sample statistics (樣本統計
量).
• If the measures are computed for data from a
population, they are called population parameters
(母體參數).
• A sample statistic is referred to as the point
estimator (點估計式) of the corresponding
population parameter.

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 Statistics for Business and Economics (14e, Metric Version)

Measures of Location
• Mean (平均)
• Median (中位數)
• Mode (眾數)
• Weighted Mean (加權平均)
• Geometric Mean (幾何平均)
• Percentiles (百分位)
• Quartiles (四分位)

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 Statistics for Business and Economics (14e, Metric Version)

Mean (平均)
• Perhaps the most important measure of location is the mean.
• The mean provides a measure of central location.
• The mean of a data set is the average of all the data values.
• The sample mean 𝑥ҧ is the point estimator of the population
mean, 𝜇.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
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 Statistics for Business and Economics (14e, Metric Version)

Sample Mean (樣本平均) 𝑥ҧ

Seventy efficiency apartments were randomly sampled in a
college town. The monthly rents for these apartments are listed
below.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
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 Statistics for Business and Economics (14e, Metric Version)

Median (中位數) (1 of 4)

• The median of a data set is the value in the middle when the
data items are arranged in ascending order.
• Whenever a data set has extreme values, the median is the
preferred measure of central location.
• The median is the measure of location most often reported
for annual income and property value data.
• A few extremely large incomes or property values can inflate
the mean.

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 Statistics for Business and Economics (14e, Metric Version)

Median (2 of 4)

Here we have an odd number (奇數) of observations:

7 observations:
26, 18, 27, 12, 14, 27, and 19.
Rewritten in ascending order: 12, 14, 18, 19, 26, 27,
and 27.
The median is the middle value in this list, so the
median = 19.

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 Statistics for Business and Economics (14e, Metric Version)

Median (3 of 4)

Here we have an even number (偶數) of

observations:
8 observations:
26, 18, 27, 12, 14, 27, 19, and 30.
Rewritten in ascending order:
12, 14, 18, 19, 26, 27, 27, and 30.
The median is the average of the two middle values
in this list, so the median = (19 + 26)/2 = 22.5.

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 Statistics for Business and Economics (14e, Metric Version)

Median (4 of 4)

Example: Apartment Rents

Notice that there are 70 values provided which are in ascending
order.
Averaging the 35th and 36th values: Median (575 + 575)/2 = 575.
• 525 • 530 • 530 • 535 • 535 • 535 • 535 • 535 • 540 • 540
• 540 • 540 • 540 • 545 • 545 • 545 • 545 • 545 • 550 • 550
• 550 • 550 • 550 • 550 • 550 • 560 • 560 • 560 • 565 • 565
• 565 • 570 • 570 • 572 • 575 • 575 • 575 • 580 • 580 • 580
• 580 • 585 • 590 • 590 • 590 • 600 • 600 • 600 • 600 • 610
• 610 • 615 • 625 • 625 • 625 • 635 • 649 • 650 • 670 • 670
• 675 • 675 • 680 • 690 • 700 • 700 • 700 • 700 • 715 • 715

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e, Metric Version)

Mode (眾數)
• The mode of a data set is the value that occurs with greatest
frequency.
• The greatest frequency can occur at two or more different
values.
• If the data have exactly two modes, the data are bimodal (雙
峰).
• If the data have more than two modes, the data are
multimodal (多峰).
The mode is
550.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e, Metric Version)

Weighted Mean (1 of 3)

• In some instances, the mean is computed by giving each observation a weight that
reflects its relative importance.
• The choice of weights depends on the application.
• The weights might be the number of credit hours earned for each grade, as in
GPA.
• In other weighted mean computations, quantities such as kilograms, dollars, or
volume are frequently used.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e, Metric Version)

Weighted Mean (2 of 3)

Ron Butler, a home builder, is looking over the expenses he

incurred for a house he just built. For the purpose of pricing
future projects, he would like to know the average wage
($/hour) he paid the workers he employed. Listed below are the
categories of workers he employed, along with their respective
wage and total hours worked.

Worker Wage ($/hr) Total Hours

Carpenter (木匠) 21.60 520
Electrician (電工) 28.72 230
Laborer (勞工) 11.80 410
Painter (油漆工) 19.75 270
Plumber (水管工) 24.16 160

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e, Metric Version)

Weighted Mean (加權平均) (3 of 3)

Example: Construction Wages

Worker X subscript i W subscript i W subscript i baseline

baseline baseline X subscript i baseline

Carpenter 21.60 520 11,232.0

Electrician 28.72 230 6,605.6
Laborer 11.80 410 4,838.0
Painter 19.75 270 5,332.5
Plumber 24.16 160 3,865.6
EMPTY CELL EMPTY CELL
1,590 31,873.7

FYI, the equally-weighted (simple) mean = $21.21

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e, Metric Version)

Geometric Mean (1 of 2)

• The geometric mean is calculated by finding the nth root of the

product of n values.
• It is often used in analyzing growth rates in financial data (where
using the arithmetic mean will provide misleading results).
• It should be applied anytime you want to determine the mean
rate of change over several successive periods (be it years,
quarters, weeks, . . .).
• Other common applications include: changes in populations of
species, crop yields, pollution levels, and birth and death rates.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e, Metric Version)

Geometric Mean (2 of 2)

Example: Rate of Return

The average growth rate per period is (0.97752 – 1)(100) =

–2.248%.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
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 Statistics for Business and Economics (14e, Metric Version)

Percentiles (百分位)
• A percentile provides information about how the data are spread
over the interval from the smallest value to the largest value.
• Admission test scores for colleges and universities are frequently
reported in terms of percentiles.
• The 𝑝th percentile of a data set is a value such that at least p
percent of the items take on this value or less and at least (100 –
𝑝) percent of the items take on this value or more.
• Arrange the data in ascending order (升冪).
• Compute 𝐿𝑝 , the location of the 𝑝th percentile.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e, Metric Version)

80th Percentile
Example: Apartment Rents

The 80th percentile is the 56th value plus 0.8 times the
difference between the 57th and 56th values.
So the 80th percentile = 635 + 0.8(649 – 635) = 646.2.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e, Metric Version)

80th Percentile, Part 2

Example: Apartment Rents

“At least 80% of the “At least 20% of the

items take on a items take on a
value of 646.2 or less.” value of 646.2 or more.”

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
a password-protected website or school-approved learning management system for classroom use.
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 Statistics for Business and Economics (14e, Metric Version)

Quartiles (四分位數)
Quartiles are specific percentiles.
1. First Quartile = 25th Percentile
2. Second Quartile = 50th Percentile = Median
3. Third Quartile = 75th Percentile

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 Statistics for Business and Economics (14e, Metric Version)

Third Quartile (75th Percentile)

Example: Apartment Rents

The 75th percentile is the 53rd value plus 0.25 times the
difference between the 54th and 53rd values.
The 75th percentile = third quartile = 625 + 0.25(625 – 625) = 625.

© 2020 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on
a password-protected website or school-approved learning management system for classroom use.
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