ECON1203 - Statistics

techniques

Chapter 4 Numerical descriptive

ECON1203 Statistics
Chapter 4 Numerical descriptive techniques
Measures of central location
N

1.

xi

Population mean: = i=1

N
n

2.

xi

Sample mean: x = i=1

n

3.

Median=Middle number when observations are sorted

4.

Mode=Observation with highest frequency

5.

Geometric mean=

i=1

(1+ x i )1

Measures of variability

1.

Range=Largest observationSmallest observation

N

( x i )2

2.

Population variance : 2= i=1

n

3.

Sample variance :s =

( x ix )
i=1

n1

1
=
n1

xi2
i=1

4.

Population standard deviation: = 2

5.

Sample standard deviation : s= s2

6.

( )
xi
i=1

Empirical Rule
1. Approx. 68% of all observations fall within 1 SD of the mean.
2. Approx. 95% of all observations fall within 2 SDs of the mean.
3. Approx. 99.7% of all observations fall within 3 SDs of the mean.
Page 1 of 3

ECON1203 - Statistics
techniques
7.

Chapter 4 Numerical descriptive

Chebysheffs Theorem: The proportion of observations in any sample

or population that lie within

SDs of the mean is at least:

1
[for k > 1]
2
k

8.

Population coefficient of variation :CV =

9.

Sample coefficient of variation :cv=

s
x

Measures of relative standing

1.

Location of a percentile : L P=( n+1 )

2.
3.

P
100

Interquartile range=Q3Q1
Box plot

Measures of linear relationship

N

1.

( x i x)( y i y)

Population c ovariance : xy = i=1

2.

( xi x ) ( y i y )

Sample covariance :s xy = i=1

n1

1
n1

i=1

xi y i i=1

3.

P opulation coefficient of correlation : =

4.

Sample coefficient of correlation :r =

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xi yi

xy
x y

s xy
sx s y

i=1

ECON1203 - Statistics
techniques
5.
6.

Chapter 4 Numerical descriptive

Coefficient of determination: R2=r 2

Least squares method

( ^y =b 0 +b1 x)

The least squares line

[ (
n

squared deviations

b1=

i=1

y i^y i )2

s xy
2

sx

b0 = y b 1 x

Page 3 of 3

minimises the sum of the