Professional Documents
Culture Documents
Fund-Statistics CorrectedVersion
Fund-Statistics CorrectedVersion
INTRODUCING STATISTICS
1.0 INTRODUCTION
1
with methods of planning experiments for obtaining data
and drawing conclusion or making useful decisions on
the basis of available data. The subject itself may be split
into
(a) Statistical inference
(b) Descriptive statistics
(c) Sampling, and
(d) Decisions analysis
2
Data classification is done in many ways. Data can be
said to be either internal or external, primary or
secondary cross-sectional or time series. Other
classification is to treat data as either qualitative or
quantitative. Finally, data can be either discrete or
continuous.
Table 1.1
7
had inevitably lost some interest.Another practical
advantage is that a sample coverage often allows a
higher overall level of accuracy than full enumeration.
Since the number of units are few, the quality of the field
work is at a higher level, more checks and test for
accuracy can be performed at all stages and more care
can be given to editing and analysis.
8
2. STRATIFIED RANDOM SAMPLING
This sampling design involves dividing the whole
N population elements into L parts or sub regions
called strata and applying simple random sampling
to each stratum. Stratified sampling is useful when
we have a heterogeneous population. The
population is now split into parts that are internally
homogeneous.
3. CLUSTER SAMPLING
Cluster sampling occurs where clusters of
individual elements (units) are chosen at random,
and all units in the drawn clusters are measured.
This is normally the situation where it is difficult or
at times impossible to select individual items but
where every item in the chosen clusters can be
measured. A typical example is that it may be
difficult to obtain a random sample of fish since
this would involve numbering the individual fish
and selecting n of them at random.
4. SYSTEMATIC SAMPLING
This involves taking measurements at places
and/or times following a spatial or temporal
pattern. In the case of spatial pattern, readings or
measurements may be taken at equidistant
intervals along a line or a grid pattern. For
temporal pattern, measurements of observation
may be taken at equal time intervals. This may be
the case in pollution studies where time and
location are significant in determining the level,
pattern or intensity of contamination or pollution of
somebody of water like a lake , river experimental
pond
9
5 TWO-STAGE SAMPLING.
The first stage consists of dividing the population
into primary units and a sample of primary units is
obtained by simple random sampling. The second
stage is to take a random sample of
measurements from each unit in the original
sample. A typical example is getting soil samples
(primary units) at random and then selecting one
or more aliquots at random from each soil sample.
Multi-stage sampling is an extension of two-stage
sampling involving three or more stages.
1. HAPHAZARD SAMPLING
This type of sampling subscribes to the idea that
place or time of sampling does not matter. The
philosophy encourages taking samples at
convenient times and locations. This results in
having biased estimates of population parameters.
It is useful when the target population is
completely homogeneous.
2. JUDGEMENT SAMPLING
The sample is obtained by subjective selection of
population units by an individual. This type of
design is useful when the target population is
clearly defined, homogeneous and completely
accessible so that one does not have the problem
of sample selection bias. At times, especially in
environmental modeling, some samples are
selected for some reasons which are different from
10
the interest of using them for making inference to
a wider population.
3. QUOTA SAMPLING
This is a type of stratified sampling in which the
selection within strata is non-random element
inherent in this sampling constitutes its greatest
weakness.
11
leading organization supplying international
information.
12
Problem Set 1
4. Define
(a) Population
(b) Sample
5. Define
(b) Parameter
parameter
13
6. Write briefly on the following;
sampling
14
CHAPTER 2
2.0 INTRODUCTION
= X6 + X7 + X8 + X9 + X10
= X1 + X2 +…+ Xn
17
Rule 1. The sum of a constant added together n times
is equal to n times that constant. Symbolically, if c is a
constant
= nc
Thus, if c = 10 and n = 4
= n = (25)(20) = 500
c = 5(3 + 6 + 7 + 9)
= 5 (25) = 125
= X1 + X2 + X3 + X4
= 3 + 6 + 7 + 9 = 25
19
To show the sum of the values of a variable when a
constant (c = 2) has been added to each,
= (3 + c) + (6 +c) + (7 + c) + (9 +c)
= (3+2) + (6+2) + (7+2) + (9 + 2)
= (5 + 8 + 9 + 11)
= 33
+ nc = (3 + 6 + 7 + 9) + 4(2)
= 25 + 8
= 33
Symbolically.
= - nc
20
= (-1) + (4) + (5) + (7)
= 17
- nc = ( 3 + 6 +7 + 9) - 4(2)
= 25 - 8 = 17
21
depend on different levels of numerical information
contained in a data set and the mathematical operations
that can be meaningfully performed on the numbers.
NOMINAL SCALE
Measurements on a nominal scale are from observations
of unordered variables (or categories) where numerical
values are assigned to represent various classes. We
encounter this when categorizing sex, political affiliation,
ethnic nationality, colour, religion etc.
ORDINAL SCALE
We use this level of measurement when we attach order
or level of relevance of one class relative to another. The
numbers used in ordinal scales are nonquantitative (non
numeric). They indicate only position in an ordered
series and not “how much” of a difference exists between
successive points on the scale. For example, three
students may be ranked A, B and C with 80, 65 and 55
as actual marks respectively. Though the first is rank 1,
the second 2 and the third 3, we cannot tell the difference
between 1 and 2 without the actual scores.
INTERVAL SCALE
RATIO SCALE
Ratios scales are ones in which a true zero origin exists.
Examples include actual number of purchases by a lady
in a given visit to a supermarket, of kilometers traveled
number of years of university education and number of
children in a family.
One’s age is a number that starts from zero.
23
value. It is also not wise to believe that discrete variables
necessarily involve only whole numbers. Nevertheless,
most of the discrete variables encountered in real life are
usually expressed in terms of whole numbers.
2.5 ROUNDING
Rounding of numbers involve representing a given
number with the required number of decimal places and
or significant figures for a required level of accuracy to be
attained. Let us consider a few examples.
24
47.546 becomes 47.55
47.542 becomes 47.54
2.987 becomes 2.99
3.534 becomes 3.53
3.532 becomes 3.53
Examples are
47.535 becomes 47.54
47.51501 becomes 47.52
Y = F(X)
n
Pr = n!
(n – r)!
Solution
(i) Permutations: n = 3, r = 2 therefore
3
P2 = 3!
(3-2)! = 6
3
C2 = 3!
2!(3-2)! = 3!
2! = 3
28
Problem Set 2
(i) (ii)
(iii) (iv)
i=1
5 Find the values of f(x,y) when ( x, y) = (1, 2,), (3,5),
(0,6), ( 7,2) given that f(x,y) = 3xy + x2 + y2
6 Draw a table of values for the function f(x) = 5x + 2
for x = 0,1,2, 3, 4, 5, 6, 7
7 Using the tables of values in question 2.6 plot the
graph of y against x.
29
8 Round off the figures 97, 1136, 47, 80, 106 to (i)
the nearest 10 (ii) one significant figure. Compute
the absolute error, relative error and percentage
error in each case.
9 Distinguish between continuous and discrete
variables. Give examples of five continuous and
five discrete variables
10 Explain the following (a) percentage (b) rate (c)
ratio. Give an example to illustrate.
11 Find out the number of men and women in your
class. Then answer the following questions.
30
CHAPTER 3
3 .0 INTRODUCTION
In this chapter, we shall consider among others, pictorial
and graphical techniques of presenting data. Data need
to be arranged and presented in a suitable format before
the information contained in the data can be given some
meaningful interpretation. This should be so irrespective
of the data source.
31
3.1 SOME METHODS OF DATA PRESENTATION
In order to communicate some useful information in a
company, be it annual account/ budget to the public, say,
in a national daily, presentation may be made using text
method, tables of figures (numbers) or pictorially using
charts and graphs with tables and comments (reports).
TEXT METHOD
This is a method, most often adopted by journalists in
their reports in dailies and magazines. The method of
presentation is that the data is not separated from the
written report. A typical example may take the form below
SEMI-TEXT METHOD
Here we combine text and table in order to present the
data.
32
Example 3.2: Students’ admission into ABC University
last year was as follows:
Management and Social science 500
Engineering 500
Education 350
Science 350
Science 350
Law 350
Agriculture and environmental sciences 450
Out of 2500 students admitted, 100 were later sent away
for using forged SSC certificates”
TABLE PRESENTATION
A table is a rectangular arrangement of data, with
headings for different rows and columns. More
elaborately a statistical table has the following features.
(a) Table number. This is a number giving the
position of a particular table among other tables in
the chapter.
(b) Title: This is a brief description of the objective of
the table.
(c) Stub and Caption: Stub is the first column that
contains headings for the rows. The heading for
the columns forms the captions while the data
(figures) constitute the body of the table.
(d) Source: This is a short note, normally at the
bottom of the table to indicate the source of the
data .
(e) Units: The units, be it for currency, space and
time should be indicated. Table with 10 -3 means
every entry should be multiply by 10-3 if we have
‘000,000, we have to multiply all entries by
1000,000.
33
(f) Approximations and Omissions can be
explained as footnotes.
34
Examples 3.4: Construct an array (in ascending order) of
the ages 28, 20, 19, 51, 40, 18, 22 of staff in the
Marketing Department of Stern Motors. Find also the
range of the data.
Solution: The required array in ascending order is the
set 18, 19, 20, 22, 28, 40, 51 and the range of the data
set is 51-18 = 33.
CLASSIFICATION
This comes in to save time and paper space when the
array is long. Before data can be tabulated, interpreted
and presented it must be classified. Classification is the
process of relating the individual items within a collected
data set and defining of various categories for them
(these separate items) in the table.
36
Cars 50
Lorries 23
Motorcycle 7
Buses 4
Buses IIII 4
37
In practice, it is common to meet a class interval, which
has neither upper class limit nor lower class limit. Such a
class interval is called an open class interval. Let us look
at Table 3.5 below on employees’ ages in Stem Motors.
41
The relative frequency of a class is the frequency of that
class divided by the total frequency of all classes and is
usually expressed as a percentage.
As an example, the relative frequency of the class 101 –
120 in Table 3.2 is 620/1000 = 62%. The relative
frequencies of all classes sum to 1 or 100%.
Relative frequency distribution is obtained by replacing
class frequencies, by relative frequencies.The relative
frequency distribution means the same as percentage
distribution or relative frequency table
43
More than 80.5 950
More than 100.5 805
More than 120.5 185
More than 140 .5 35
More than 160.5 0
Problem Set 3
1. State at least three essential factors that should be
incorporated in any type of data presentation.
2. Explain the following terms:
a) Raw Data
b) Array
c) Tabulation
44
d) Classification
e) Frequency Distribution Table
3. a) Arrange the numbers 18,46, 39, 29, 7, 49,
12, 58, 35, 23, in an array and
b) Determine the range.
67 85 74 82 68 89 62 88 94
77 86 64 67 82 73 84 54 61
74 79 88 73 60 93 71 60 75
62 65 75 87 74 63 95 78 73
65 77 82 75 95 77 69 74 60
95 77 89 61 75 96 60 79 71
80 62 68 97 79 85 76 65 76
65 80 73 57 88 78 62 76 74
86 68 74 81 73 63 73 76
45
e) the marks of the five lowest ranking
candidates,
f) how many candidates scored marks of 65 or
higher,
g) how many candidates scored marks below 75
h) what percentage of candidates scored marks
higher than 75 but not higher than 95,
i) Which marks did not appear?
CHAPTER 4
GRAPHICAL TECHNIQUES
4.0 INTRODUCTION
Tables, reports and frequency distributions are
some of the basic methods of presenting raw data.
The next stage is to present data graphically and
diagrammatically to make the immediate impact,
illustrate the information and bring out the salient
points.
4.1 CHARTS
46
LINE CHARTS: These are the simplest diagrams
to represent a frequency distribution, where the
length of each line is proportional to the frequency.
PIE CHART
A pie chart is a circle divided into sectors to
represent each item or variable. Each sector of
the circle should have an area proportional to the
quantity of the variable.
48
4 To compare two totals the areas of the pie
charts should be in proportion to the totals
of the data.
49
Therefore the first pie chart will have a radius of 2cm and
the second pie char a radius of 2.4cm with the
appropriate segments for the three variables.
BAR CHARTS
400
-5 -4 -3 -2 -1 0 1 2 3 4 5
Chemicals
51
Construction
Machines
Textiles
52
53
2005 2006 2007
Figure 4..3: The Compound Bar Chart: Output for an
Electrical Company.
2005
54
2006
2007
Television
Radios
Cell phones
Figure 4.4: The Component Bar Chart: Output for an
Electrical Company.
HISTOGRAMS
The histogram is an extension of the line chart.
A histogram or frequency histogram consists of a set of
rectangles having
55
In the course of constructing histogram we first of all
construct a frequency distribution table so that a large
data set can be put into a more manageable form. This
without doubt involves some loss of information. Over
the years similar techniques have been proposed and
found to provide a useful and quickly formed pictorial
representation of the data set. This representation is
quite adequate for preliminary exploratory purposes of
small data sets without any loss of the numerical values
of the variable involved.
28 45 13 54 22 35 38 26 47
23 18 25 27 33 35 16 46 22
29 39
Experimental
Results Tally Frequency
10-19 III 3
20-29 IIIII III 8
30-39 IIIII 5│
40-49 III 3
50-59 I 1
Where the tally pictures the overall pattern of the data
like a histogram (or bar chart) lying on its side. By
56
considering Problem Set, problem 6 this notion shall be
revived for elaboration to enhance our understanding of
the similarity between stem – leaf plot and the histogram.
10-19 3 8 6
20-29 8 2 6 3 5 7 2 9
30-39 5 8 3 5 9
40-49 5 7 6
50-59 4
1 3 8 6
2 8 2 6 3 5 7 2 9
3 5 8 3 5 9
4 5 7 6
5 4
57
a stem and each digit on a stem to the right of the vertical
line is a leaf. To the left of the vertical line are stem
labels, which in our example, are 1*, 2*… and 5* , or 1,
2…..and 5,
Essentially, a stem – and – leaf plot presents the same
picture as the corresponding tally, yet it retains all the
original information. For instance, if a stem-and-leaf plot
has the stem
1.2* │ 5 6 3 0 7
The corresponding data are 1.25, 1.26, 1.23, 1.20 and
1.27 If a stem-and-leaf plot has the stem
0.3** │18 05 66 79
With two-digit leaves, the corresponding data are 0.318,
0.305, 0.366 and 0.379.
4.2 GRAPHS
We shall consider a set of graphs that are connected with
frequencies in one way or the other. Some of them are
frequency polygon and commutative frequency polygon
or ogive.
FREQUENCY POLYGON
58
A frequency polygon is a line graph of class frequency
plotted against class mark. It can be obtained by
connecting midpoints of the tops of the rectangles in the
histogram.
59
Problem Set 4
83,105,108,110,110,110,113,116,123,123,123,123 122,
126,126,126,126,126,126,130,134,134,134,141,141,
141, 145,155, 160,164 170,176,176,180,180, 180, 207
(c) Rotate your plot in (b) by 90º so that the stem 8/2
is the first and 20/7 last
60
CHAPTER 5
61
NUMERICAL TECHNIQUES
5.0 INTRODUCTION
Averages are used all the time in everyday life and work.
The statement that `inflation has risen by 5% in the last
year` is usually qualified by the word average``. The
average consumer is said to buy more this than last
year.,, the average temperature has risen or fallen. It is
also common to tal of average height of people… the
average price of electrical goods… and so on.
Example 5.1
10 candidates scored an average mark of 72 in Lagos
centre in an aptitude test for top positions in a certain
company. At Abuja, the average score for 10 candidates
was 82. The overall average is 77 and each candidate’s
score can be compared to this value.
Example 5.2
Two firms A and B may pay very widely varying wages to
similar types of employees. In firm A, wages may vary
between N450 a week and N1250: in firm B, wages may
vary between N850 and N1500. Both firms may have an
average wage of N1000 for this type of employee..
63
Example 5.3
It may be recorded that a shop that is for sale has
average weekly sales of N200000. This provides
an immediate idea of the size of the business,
although sales might have been N700000 in
Christmas week and N80000 in the worst week.
Example 5.4
If the average wage in a factory is N5000 and there are
3000 employees, then it can be deduced that the weekly
wage bill is N15000000.
Example 5.5
The statement ` I think that on average I use about 30
litres of petrol a week`, is using the average as an
estimate.
Example 5.6
Two companies A and B may both have average annual
profits of £ 5000,000 over the last five years. However,
when their actual records are inspected it may be found
that the companies’ performances are very different.
64
CompanyA: 11000000 8000000 3500000 2000000 500000
= (5.1)
Solution
The arithmetic mean of the numbers 15, 17, 18, 20, 30 is
= = = 20
65
THE ARITHMETIC MEAN OF A FREQUENCY
DISTRIBUTION
= (5.2)
Example 5.8:
Find the arithmetic mean for the price of transistor radios
in Table 5.1.
= A + (5.3)
= A + (5.4)
.where
cui = di = Xi – A (5.5)
Formula (5.4) is called the coding method for computing
the mean. It is a very short method and should be used
always for grouped data with equal class interval sizes.
THE MEDIAN
68
Example 5.10: The set of number 5, 5, 7, 9, 11, 12, 15,
18 has median ½ (9 + 11) = 10
XMED = L0 + (5.6)
69
Example 5.13: The set 20, 30, 40, 40, 40, 50, 70, 70, 95
has two modes 40 and 70 and is called a bimodal
distribution.
XMODE = L0 + (5.7)
(5.11)
71
Example 5.15. The harmonic mean of the numbers
2, 3, 5, is
H = = 2.90
H ≤G≤X (5.12)
73
Data values are not only clustered around a central point,
but also spread out around it.
THE RANGE
MD = (5.13)
74
Mean Deviation , MD =
MD = (5.14)
.where
n=
Q = ( Q3 - Q1)/2 (5.15)
s = (5.16)
s = (5.17)
76
VARIANCE
COEFFICIENT OF VARIATION
STANDARD SCORE
The variable (5.20)
is called a standardized variable. It is a dimensionless
quantity (i.e. is independent of units used).
MOMENTS
If X1, X2,…. Xn are the n values assumed by the variable
X, the quantity
Xr = X1r + Xr2 +…+ Xrn = (5.21)
78
Mr = (5.22)
= (5.23)
(5.24)
79
SKEWNESS
One of the ways to look at the shape of a distribution
is the extend to which it departs from symmetry.
Skewness of a data set is the degree of departure from
symmetry. We have two kinds of skewness for any
unimodal distribution- a unimodal distribution is either
skewed to the right (positive skewness) or skewed to the
left (negative skewness).
There are many measures of skewness. Some of
these are as follows:
1. Pearson’s first coefficient of skewness 1 ,given by
(5.25)
(5.26)
(5.28)
80
In order to determine positive and negative skewness,
it is common to use 2 as defined in Equation (5.26).
When mean > median, 2 > 0 and we have positive
skewness. When mean < median, 2 < 0 and we have
negative skewness. Positive and negative skewness are
illustrated in Figure 5.1 and Figure 5.2
KURTOSIS
Kurtosis of a distribution is the extend of its of
peakedness . We have basically, three kinds of
peakedness. They are
81
(a) Leptokurtic Peak (b) Platykurtic Peak
82
platykurtic distribution and zero for the normal
distribution.
Problem Set 5
83
(e) Calculate the standard deviation for the
distribution.
2. Tonye has a batting average of 32 with a standard
deviation of 13. Koye has an average of 47 with a
standard deviation of 18. Which is the more
consistent player?
3. Find Pearson’s (a) first and (b) second coefficient
of skewness for the distribution of Table 5.2
4. Find
(a) moment coefficient of skewness
(b) moment coefficient of kurtosis for the
distribution of scores of students in Biology test
62 92 90 85 53
64 87 80 77 58
95 90 64 60 70
86 70 67 74 86
5. Find the
(a) Harmonic mean
(b) Geometric mean
(c) Arithmetic mean for the data of question 4 and
comment on your result.
6. Find the mean, mode and median for the data in
Table 3.2 and comment on your results.
7. Find the 1st and 3rd quartiles for data in Table 3.2
84
CHAPTER 6
PROBABILITY
6.0 INTRODUCTION
85
1. In measuring the likelihood of occurrence of an
event.
2. In measuring the level of uncertainty or risk we are
likely to encounter in decision making and
3. in bridging the gap between descriptive statistics
and inferential statistics, thereby making us
comfortable enough to handle decision issues
both in theory and practice.
86
Example 6.1 Flip a fair coin once. Construct the sample
space. Enumerate the simple (elementary ) events of the
experiment.
87
Solution: The values of X corresponding to the
outcomes E1, E2, E3, and E4 are 2, 1, 1 and 0.
P(A) = m/n
The probability of non-occurrence of the event (called its
failure) denoted by P(Ac) = 1- m/n
Ω = {1, 2, 3, 4, 5, 6} ,
= 3/6 = ½
Solution
(a) The probability of a “3”, showing up in 6000 tosses
of the die is equal to the relative frequency in the
89
tossing experiment. Hence the required
probability is
1092/6000 = 0.182
(b) Probability of a 3 in 12000 tosses
SUBJECTIVE PROBABILITY
Subjective probability is one that is based on the
personal belief or feelings of the person who
assigns the probability and is useful in dealing with
events that cannot be repeated and as such, are
generally cannot be given frequency
interpretation.This probability is also applicable
when there is little or no past information or
experience. Suppose we are to choose one out of
four candidates as a professor for a chair in
environmental physics. All four have good
personality, good communication skill, highly
knowledgeable in their areas as seen during oral
interview and equally impressive track records
over the years. The chances that each of them
will be a good professor may require assigning a
subjective probability that could be nothing more
90
than a good guess. For instance “what is the
probability that it will rain tomorrow”? One person
may say the answer is 0.5 and another may
believe that it is 0.7; all estimates emanating from
personal feelings.
AXIOMATIC PROBABILITY
The classical definition involves using the
expression “equally likely” which is the same as
“equally probable”. This makes us guilty of
circular reasoning. There is also vagueness in the
use of the word “large”. The subjective approach
is equally not reliable since it is based on personal
feelings of those assigning probabilities. Due to
these drawbacks mathematicians and other
researchers have resorted to the axiomatic
approach as the only philosophically satisfactory
way to define probability. In the axiomatic
approach we simply state what probability is by
enumerating the rules (axioms) that it follows. We
state axiomatic probability as follows:
Probability is a function P(.) which depends on event
(set). A such that the following axioms hold.
1. 0 ≤ P(A) ≤ 1
2. P(Ω) = 1
91
3. P(A1 U A2 U….) = P(A1) + (A2)+... where A1, A2,
…,. are mutually exclusive events and Ω is the
sample space.
94
Example 6.8. In the experiment of tossing
two fair die once, what is the probability of
obtaining either sum of 9 or a sum of 11?
Solution
P(A) = 1040/2000 = 0.52
P(B) = 140/2000 = 0.57
97
P( ). = Probability that a person is a banker given
that the person is a female.
= 80/1040 = 1/13
Alternatively, using the definition of conditional probability
we see that
P(AnB) = 80/2000
P(A) = 1040/2000
P( ). = P(AnB) / P(A)
= 80/1040 = 1/13
Solution
AnB = {1}
P(A) = 3/6 = ½ and P(B) 2/6 = 1/3
P(AnB) = 1/6
Example 6.14.
Consider a box containing 6 white balls and 4 black balls.
2 balls are drawn at random. What is the probability that
the first ball is white and the second black if drawing is?
99
(a) With replacement
(b) Without replacement
Solution
Let A be the event “first ball is white” and B the
event “the second ball is black”. Then AnB is the
event “ 1st ball is white and 2nd ball is black”
101
From the probability tree, we have Path1, Path 2, …,Path
9 and the sample space Ω is
= 3 + 3 = 6 = 3
14 14 14 7
102
6.12 BAYE’S THEOREM
THEOREM 6.1.
For any events A and B,
103
Equation (6.10) is total probability theorem and Equation
(6.11) is a Baye’s formula when Ω is partitioned into two
events B1 and B2.
Observe that
A = (AnB1) U (AnB2)
105
P(A) = P(AnB1) U (AnB2)
= P(B1) P(A│B1) + P(B2) P(A│B2)
= 1 5 + 1 3
2 11 2 9
= 13/33
= 0.3939
= ½ 5/11
(½ ) ( 5/11) + ( ½ ) (3/9)
= 5 13 = 15
22 33 26
106
=
Example 6.18.
In a certain factory machines B1, B2 and B3 are all
producing electric bulbs of the same dimension,
machines B1, B2 and B3 produce 3, 2 and 1% defective
bulbs respectively. Of the total production of bulbs in the
factory, machine B1 produce 36%, machine B2 produces
24% and machine B3 produces 40%. If a bulb is selected
at random in a day, what is the probability that it is
107
defective?. If a selective bulb is defective what is the
probability that it was produced by machine B3?
Solution
Let B1 be the event that a bulb is produced by machine
B1, B2 and B3 are similarly defined. Also let D be the
event that a bulb is defective. The probability that a
selected bulb is defective is P (D) = P(B 1) P(D│ B1) +
P(B2) P(D│ B2) + P(B3)P(D│ B3)
36 3 + 24 2 + 40 1 =
100 100 100 100 100 100
96
100000
= 0.0196
If the selected bulbs are defective the probability that it
was produced by machine B3 is
P(B3│D) = P(B3) P(D│B3)
P(D)
= 40 1 196 = 40
100 100 10000 196
= 0.2040
6.14 THE NOTION OF PROBABILITY DISTRIBUTION
f(x) =
110
1. The total area bounded by the curve of the pdf and the
X axis is one.
112
If p is the probability that a man wins a
construction contract of D naira, the mathematical
expectation or simply expectation is pD naira.
113
Problem Set 6
1. If a letter is taken at random from the word
“POLYANTHUS’ what is the chance that it is a
vowel?
2. Bola chooses at random a number between 1 and
300. What is the probability that the number is
divisible by 4?
3. What is the probability that a number chosen at
random from the integers between 1 and 10
inclusive is either a prime or a multiple of 3.
4. Find the probability of selecting a figure which is a
parallelogram from a square, a rectangle, a
rhombus, kite and a trapezium.
5. A box contains 6 red pens and 9 blue pens. If one
pen is picked at random, what is the probability
that it is a red pen?
6. In an urn containing 6 red, 3 white and 2 yellow
balls, a ball is randomly selected, what is the
probability that the selected ball is white?
7. The following table gives the numbers of students
present in forms 5A and 5B of a Secondary School a
certain day.
Form 5A Form 5B
Number of boys 14 10
Number of girls 6 5
The bell goes for lunch and students come out of their
classroom at random. Find the probability that the first
student to come out is:
(i) a boy from 5B
(ii) a girl
(iii) from form 5A
(iv) a boy from 5B or a girl.
114
8. Find the probability that a number selected at
random from 41 to 56 is a multiple of 9.
9. What is the probability that an integer selected
from the set of integers 20,20,…30 is a prime
number?
10. A fair die is rolled once, what is the probability or
obtaining a number less than 3?
11. What is the probability of having an even number
in single toss of a fair die?
12. A die is rolled 200 times, the outcomes obtained
are shown in the table below.
(a) Find the probability of obtaining a 2
(b) What is the probability of obtaining a number less
than 3 ?
13. A create of soft drinks contains 10 bottles Coca-
cola, 8 of Fanta and 6 of Sprite. If one bottle is
selected at random what is the probability that it is
NOT a Coca-cola bottle?
14. If events x and y are mutually
exclusive,
F(X) = 1/3 and P(Y) = 2/5, (i) Find P(XUY) (ii)
P(XnY)
15. Ade and Chike threw a die in
turn. If the die contains the numbers 1,2,3,4,5 and
6, what is the chance that Chike will throw either
a5 or a6?
16. The probability of an event P ¾ while that of
another event Q is 1/6. If the probability of both P
and Q is 1/12, what is the probability of either P or
Q?
17. In a class of 30 students who sat the teachers’
examination in a certain year, 12 passed with
merit, 15 had passes and the rest had credits.
115
Find the probability of selecting at random, (i) a
student with Merit, (ii) a student with a Failure
(iii) a student with a Credit (iv) a student with a
pass or Credit.
18. Mrs Jones is expecting a baby. The probability
that it will be a boy is ½ and the probability that the
baby will have blue eyes is ¼. What is the
probability that she will have a blue – eyed boy?
19. A box contains 2 white and 3 blue identical
marbles. If two marbles are picked at random,
one after the other, without replacement, what is
the probability of picking two marbles of different
colours?
20. If the probability that a civil servant owns a car is
1/6, find the probability that: (i) two civil servants,
A and B, selected at random, each owns a car; (ii)
of two civil servants C and D, selected at random,
only one owns a car, (iii) of three civil servants, x,y
and z, selected at random, only one owns a car.
21. A box contains identical balls of which 12 are red,
16 white and 8 blue. Three balls are drawn from
the box one after the other without replacement.
Find the probability that: (a) three are red; (b) the
first is blue and the other two are red; (c) two are
white and one is blue.
22. What is the probability that a total sum of seven
would appear in two tosses of a fair die?
23. A pair of fair dice each
numbered 1 to 6 is tossed. Find the probability of
getting a sum of at least 9.
24. Rolling two unbiased dice,
what is the chance of the difference in scores
being 4?
116
25. Two numbers 1,2,3 and 4,. What is the probability
that the sum of the numbers removed is even?.
26. Define the following terms;
117
33. An insurance salesman sells policies to 4 men all of
identical age and in good health. According to the
actuarial tables the probability that a man of this
particular age will be alive in 20 years is 3/4. Find the
probability that in 20 years,
118
CHAPTER 7
119
The number X of patients who present themselves for
treatment daily is a discrete random variable. X can
assume the values 0, 1, 2,....., 10
(b)
121
7.3 MATHEMATICAL EXPECTATION
Let X be a discrete random variable which can
assume values, X1 , X2,…..Xk with respective probabilities
P1 ,P2 ,…. Pk such that P1 + P2 +…. Pk = 1. The
mathematical expectation of X, denoted by E(X) is
defined as
(7.5)
where
123
where
124
2 As approximation to other distributions, for example
the hypergeometric distribution.
P(X=5) =
(b) Two flights being late implies that three flights arrive
on time. Hence X=3 and
P(X=3)=
Solution: n= 5, x = 2, p=0.6
125
THE POISSON DISTRIBUTION
126
(d) The variable X can assume integral values from
zero to infinity
P(X=x) = =
(b) P(X= 2) =
127
Example 7.6 Using information in Example 7.5,find the
probability of having at most 2 lost bags in a flight.
P(X=4) = = 0.013
(7.11)
where
N= size of the population
K = number of successes in the population
x = number of successes in the sample
n = sample size or number of trials.
σ2 = n. (7.13)
130
Example 7.7 A pond contains 24 fish, out of which 8 are
marked. A sample of size 5 fish are drawn at random,
what is the probability that 3 of them are marked?
P(x=3) =
Problem Set 7
133
134
CHAPTER 8
8.0 INTRODUCTION
In this chapter, we shall consider, distributions
that depend on continuous random variables. Precisely,
we shall look at the mathematical form for each
distribution considered and applications.
(8.1)
xxxxx
Figure 8.1: Sketch of the Uniform Distribution.
135
Some applications of the rectangular distribution include
random number generation and simulation in general.
= (d- c)/(b-a)
(8.4)
136
(8.5)
and its variance is
(c )
137
Solution: Take it as an exercise.
= mean of X
= variance of X
= 3.14159....
e = 2.71828…
(8.8)
(8.9)
= (8.10)
where and Z = .
139
The value of Z is referred to as Z score or standard
score. Values of Z and associated probabilities are
obtained from table of standard normal distribution called
Z table.
(e) P(24<X<36)
= P[(24-12)/10 <(X-12)/10 < (36-12)/10]
= P(1.2 <Z < 2.4)
= Area between Z=0 and Z=2.4 - area between Z=0 and
Z= 1.2
= 0.4918-0.3849
= 0.1069
=0.5 + 0.5 = 1
EMPIRICAL RULE
142
8.4 CENTRAL LIMIT THEOREM (CLT)
143
(a) Z has the general form
or
144
The Poison distribution with parameter λ has
Mean = E(X) = λ
Variance σ2 = Var(X) =λ
The quantity Z is
=
= 0.5000 + 0.444 = 0.9441
145
Problem Set 8
146
CHAPTER 9
CONFIDENCE INTERVAL
9.0 INTRODUCTION
147
In practice, we encounter both point and interval
estimators in many situations. For instance, tourists
moving from one country to another are concerned about
not only of average temperature (point estimate) but also
of the minimum and maximum temperature of cities to be
visited. Also, an employee leaving his current job for
another is concerned about the new salary brackets
(interval). Will his new salary fall within a reasonable
brackets?
149
9.3 A LARGE-SAMPLE CI FOR A POPULATION MEAN
μ.
Solution
The approximate 95% confidence interval for μ is
= 76 ± 1.96 (4/√50)
= 76 ± 1.11
150
= [74.89, 77.11]
= 76 ± 2.58 (4/√50)
= 76 ± 1.46
= [74.54, 77.46]
151
where is the Z-value corresponding to an area
in the right (upper) tail of a standard normal distribution.
Since p and q are unknown, we estimate them as
and
0.600
152
For a 90% CI, = 0.10 and /2 = 0.05
= 0.600 ± 0.026.
153
(a) is normally distributed if each population has a
normal distributions
(b) has approximately a normal distribution if each of
n1 and n2 is large (using the central limit theorem).
(c) has mean μ1 – μ2
(d) has standard error
SE =
( )±
( )±
A 99% CI for μ1 – μ2 is
1254 ± (184.17)
= 1254 ± 2.58(184.17)
= 1254 ± 475.2
SE =
155
(c) approximately normal distribution when n1 and n2 are
large, due to central limit thermo (the product,
n1q1, n1p1 , n2q2 and n2q2 must each be greater
than 5 to justify the use of normal approximation:
Oto Aka
Sample Size,n
Favouring
consensus
A 99% CI for is
156
=0.12 0.194
= [-0.074, 0.314].
The interval contains the value p 1 – p2=0 which implies
that there may be no difference in proportions.
± =
= [470680, 590980]
where
Solution
159
Pooled variance
A 90% CI for is
161
This formula is known as Satterthwaite’s approximation
some authors and researchers apply this approximation
to estimate degrees of freedom when the ratio of the
larger variance to that of the smaller variance is greater
than 3.
If we fear that the sampled populations might be far from
being normal, whether variances are equal or not we can
use a non-parametric method. One non-parametric
method for comparing two independent samples is the
Wilcoxon rank sum test.
162
experimental ponds. The results are given in Table 9.3
below.
Pond X1 X2 D = X1- X2 D2
1 11.7 11.3 0.4 0.16
2 10.9 10.5 0.4 0.16
3 13.4 12.8 0.4 0.36
4 10.8 10.2 0.6 0.36
5 9.9 9.3 0.6 0.36
Mean 11.34 10.82 0.6 ∑D2= 1.4
A 95% CI for μ1 – μ2 is
= 0.52 ± 0.14
= [0.38, 0.66]
Problem Set 9
1. Define estimator (statistic) and parameter
163
2. When do we say that a point estimator is
(a) unbiased
(b) efficient (best) ?
3. A random sample of 60 first year students in
certain university reveals an average weight of
65kg with standard derivation 1.5kg. Construct a
95 percent confidence interval for the mean weight
of first year students. Repeat your calculations if a
99 percent confidence interval is required.
4. The time in minutes workers in Xcel group spent in
getting to work are given below:
30 40 40 32 33
22 24 46 36 29
41 36 36 44 29
29 35 32 25 28
CHAPTER 10
164
TEST OF HYPOTHESES
166
A two-tailed test and a one- tail test .
167
Table 10.1: All possible decision on a given hypothesis.
State of nature or fact Ho True Ho false
↓ →
Decision
Accept Ho Correct Wrong Decision
Decision Type II error ()
Type I Error
Type I error is the probability of rejecting a true
hypothesis. The size of this error is normally denoted by
.The area spanned by defines the critical region C for
Ho. When sample points fall within C, Ho is rejected and
when they fall outside C Ho is accepted and H1 rejected.
The acceptance region is (1-) (See Figures 10.1-3) The
probability of Type I error is also called the significance
level of the test.
Type II Error
Type II error is the probability of accepting a false
hypothesis. The size of Type II error is denoted by .
168
/2 = 0.25
-1.96 0 1.96
Shaded portion is the critical region. The un-shaded
portion is the acceptance region.
= 0.05
169
Figure 10.3: Critical Region for Testing Ho: = 72 Versus
H1: > 72
170
Solution Case (a) Ho: μ= 72 Vs H1 : μ < 72
(i) Test statistic Z = 7.07
(ii) Decision Rule: Reject Ho if Z < Z = Z0.05
= - 1.645. Since Z =7.07 is not less than
Z0.05 = -1.645, we cannot reject Ho:
171
Since p = 0.0 < = 0.05, we reject Ho and this is the
same conclusion reached in Example 10.3
Solution
P-value = P [ Z >3.04] + P[Z<-3.04]
= 0.0012 + 0.0012
= 0.0024
That is
interval; μ0 ± 1.96
= [70.89, 73.11]
173
Z2 =
= P[ Accept Ho when μ = 70 ]
= P [70.89 < < 73.11 when = 70]
= P [1.57 < Z < 5.50]
= 0,0582
174
3. Test statistic:
4. Assumption
175
Decision Rule: Reject H0 if
@where
Since , we reject H0 .
10.6 A LARGE-SAMPLE TEST FOR A POPULATION
PROPORTION P
We follow the follow steps:
1. Null Hypothesis: H0: P = P0
2. Alternative Hypothesis H1 Decision Rule
Reject H0 if
H1: P > P0
H1: P < P0
H1 : P ≠ P0
( )
3. Test statistic
= -6.81
2. Test Statistic
(b) If D0 ≠ 0, we use SE =
Example 10:11
Use the information is Example 9.5 to investigate if the
proportion of people from Oto favoring consensus
appointment is higher than the proportion from Aka
Take = 0.01
Test Statistic is
178
From Example 9.5,
SE = 0.0753 and = 39/50-66/100 = 0.78-0.66=0.12
Z= 0.12/0.0753 = 1.5936
Test statistic:
For df = 5, = = 2 .015
Since t = 1.32 is not greater than = 2.015
We cannot reject Ho
180
Example 10:13 Suppose we are interested in testing
Ho: μ= 500000 as in Example 10.12
Find the p-value for the following alternative hypothesis if
= 0.05
That is
(y- 0.10) : 0.156 as 0.05 : 0.539
means
Extremes
181
Product of extremes = product of means
(y- 0.10) (0.539) = (0.156) (0.05)
Again we accept Ho
183
= 3.6/2.5153 = 1.431
Df = n1+ n2 – 2 = 10 + 10 – 2 = 18,
= 0.10, = 1.734
Ho: μ1 – μ2 = 0 Versus H1 : μ1 – μ2 ≠ 0
where
185
For Device I, = 1.316/11.34 = 0.116 (= 11.6%)
(a) H 1: we have
(b) H 1: we have
(c) H1: we have
186
2. A 100(1- ) % confidence interval for σ2 is
Now
Since = 11.748 < ,
we accept Ho.
187
10.13 COMPARING TWO POPULATION VARIANCE
Consider two normal populations with variances and
. Now Ho: = is equivalent to Ho : / =1.
and H1: > is equivalent to H1: / > 1. The
statistic / has an F distribution with (n1 -1) degrees of
freedom for the numerator and (n 2-1) degrees of freedom
for the denominator.
Test Statistic F =
188
P-value is equal to twice the area to the right of F
under the F distribution curve.
Problem Set 10
Ho: =8
HI: >8
Ho: = 395
HI: 395
A random sample of 11 observation gives a mean of 405
and standard deviation of 5 using = 0.01
190
5. A food scientist wishes to compare the weight gain
of infants using Tex baby good and Dido brand. A sample
of 50 babies using Tex’s products revealed a mean
weight gain of 8.7 pounds in the first three months after
birth. The standard deviation of the sample was 3.3
pounds. A sample of 60 babies using Dido brand of good
revealed a mean increase in weight of 9,2 pounds, with a
standard deviation of 3.9 pounds. If the level of
significance is 0.05, can we conclude that babies that
used Tex brand gained less weight ?
191
d) State the decision rule
e) Have you accepted Ho ?
Room 1 2 3 4 5 6 7 8
Before 7.7 7.6 10.0 11.4 12.3 9.2 7.4 12.7
After 7.9 3.5 8.5 9.6 9.2 7.2 4.5 3.0
The test on the new soap was carried out in central Port
Harcourt last year. If the level of significance is 0.05, can
192
we say that the new soap lower the contamination
measurements?
193
CHAPTER 11
194
(b) Choosing the combinations of
these levels at which to observe the response
variable.
195
Randomization: This is defined as a procedure for
randomly
(a) allocating the experimental units to specified
groups and
(b) Ordering of individual runs (trials) of the
experiment to be performed. We note that
randomness touches both allocation of
experimental material and ordering of
experimental trials.
The reasons for randomization are as follows:
SE( ) = S/
196
It is clear, that SE( ) can be reduced by increasing the
number of replication r, hence beefing up precision and
sensitivity in measuring treatment differences.
Blinding.
A nonstiatistical element, so important in consumers
testing and other studies where the data are subjectively
obtained, is blinding. Blinding refers to the concealment
of the identification of treatments from the experimenter
and from the panelists or judges. Blinding is
accomplished by coding the treatments using two-or
three-digit numbers. The purpose of blinding is to control
bias due to the experimenter’s knowledge of the study
and the panelists’ knowledge of the treatments. For
instance, comparison of products that are brand identified
are biased owing to brand effects, package design and
other appearance characteristics, when not concealed,
generally contribute to biased evaluation by panelists.
198
2. Normality. Responses within each treatment are
normally distributed.
Ho: μ1 = μ2 Ho : μ2 = μ3 and Ho : μ1 = μ3
199
Our next numerical illustration is on how to construct and
implement a CRD.
Versus
H1: At least one of the means is different from others.
Source Df SS MS F
Treatment a-1 Tyy MST = Tyy /(a -1)
202
Example 11.3. In an experiment to determine the
effect of teaching on performance of secondary school
students a group of 15 students were randomly assigned
to each of three teaching methods: teaching with no
charts, teaching with commercial charts and teaching
with teacher-made charts. The post-test scores are as
given in Table 11.2
Source df SS MS F
Treatment 3 -1 =2 688.53 344.26 2.81
Error 15 -3 = 12 1472.61 122.72
Total 15-1 = 14 2161.14
204
Since F = 2.81 < we uphold the notion that
the means are essentially the same. That is, we accept
Ho.
(11.1)
where
MSE = the mean squre error from the ANOVA table
= size of group i
= size of group j,
Step 3 Let the degree of freedom of MSE from ANOVA
be find Recall that
205
(11.2)
LSD = (11.3)
LSD = (11.4)
Step 5 Let If
(11.5)
(11.6)
206
(11.7)
207
similar) with one unit within each block randomly
assigned to each treatment. The main advantage of
RBD over the completely randomized design (CRD) is
that we are compare treatments using homogeneous
units, so that any true differences in the treatments will
not be concealed by differences in the experimental
units. The number of observations in the experiment is n
= ab
If C =
Then
208
with
Source Df SS MS F
Treat a-1
ments
Blocks b-1
Error (a-
1)
(b-
1)
Total .ab
–1
209
Example 11.6 Each of four different agencies, took
samples of groundwater from five toxic-waste dump sites.
Each sample was analyzed and amount of contaminant
determined by agency collecting the sample. The
concentration in parts per million are given in Table 11.6
below
210
(c) H1: Block means are not the same(That is, levels of
contamination are not the same at the sites) Versus
Source Df SS MS F
Agencies 3 46.972 15.6573 6.6279
For agencies p-value < 0.05 .This same result holds for
sites. Therefore
(a) The agencies are inconsistent in their
measurements. We reject Ho.
(b) The dump sites differ in their levels of
contamination. We reject Ho.
11.10 THE ANOVA FOR AN a x b FACTORIAL
EXPERIMENT
First, we have
a levels of factor A
b levels of factor B
r replications of each of the ab factor combinations
n = abr observations in the whole experiment
As before, set C = G2 / n
Then
212
SSE = SSyy – [SSA + SSB + SS (AB) ]
Source Df SS MS F
A a-1 SSA MSA = SSA/a-1 MSA/MSE
B b-1 SSB MSB = SSB/b-1 MSB/MSE
AB (a-1) SS MS(AB) =
(b-1) (AB)
214
Example 11.7: Table 11.8 shows sales of scientific
calculators by two sales agents observed on four
randomly selected brands of calculators. The
numerical entries in the table are sales in thousand of
naira. Consider the table as containing two factors
brand and sales agent.
Brands of Calculator
Sales Agent Brand1 Brand 2 Brand 3 Brand 4
Sales agent 1 673 581 571 645
712 575 532 725
730 640 552 600
Sales agent 2 580 724 732 800
617 700 780 750
575 680 761 855
Using = 0.05 significant level test for
(a) Sales agent effect
(b) Brand effect, and
(c) Interaction between sales agent and brand.
Solution
Source Df SS MS F
Brands 3 27758.83333 9252.944444 6.80
Sales 1 43180.16667 43180.16667 31.74
Agents
3 87430.16667 21.42
29143.38889
Error 16 21764.66667
1360.291667
215
Total 23 180133.8333
The brands’ p-value < 0.05 .This same result holds for
sales and interactions. Therefore
Problem Set 11
217
Detergent 1 Detergent 2 Detergent 3 Detergent 4
Machine 1 46 48 49 43
Machine 2 42 45 51 39
Machine 3 52 53 54 50
Take
Machine 1 Machine
Mon Tues Wed Thu Fri Mon Tues Wed Thu Fri
Technician 1 16 19 18 19 13 15 17 19 18 16
Technician 2 13 17 15 19 12 12 16 13 17 132
218
Technician 3 18 17 22 24 19 18 16 19 22 16
219
CHAPTER 12
CORRELATION
12.0 INTRODUCTION
222
Y Y
X
X X
X X
X X
X X
X
X
X
X X
X X
X
224
where
Solution:
Sxy = 26, Sxx = 10, Syy = 138
Therefore, = 0.70
225
The correlation coefficient value of 0.70 indicates a
strong positive correlation between the two variables.
226
Example 12.2 Using Table 12.2, calculate Spearman
rank correlation coefficient .
Solution
1981 4 10 1 3 -2 4
1982 5 7 2 1 1 1
1983 7 9 3 2 1 1
1984 8 22 4 4 0 0
227
12.7 INTERPRETATION OF CORRELATION
COEFFICIENT.
We interpret r (and also ) as follows:
228
If the necessary allowance is done for lag, it is likely that
we will have the true picture of the correlation between
the two variables.
PROBLEM SET 12
229
(Hint: Let Show that the
correlation between X* and Y* is the same between X
and Y)
Physics 58 70 65 85 77 55 40 62 82 86
Calculus 55 64 60 82 74 50 38 60 83 84
CHAPTER 13
SIMPLE REGRESSION
13.0 INTRODUCTION
230
are those measured on interval or ratio scales. This
chapter focuses on uses of regression, types of
regression models and methods of fitting linear
regression line, among others.
231
necessary to open additional warehouses based on
projected sales of commodity A?”.
(13.1)
= b0 + b1X (13.2)
235
The quantities b0 and b1 are respectively the
estimates for and . We notice that the
random error term u is no more there. Its absence
is due to one of the classical assumptions of least
squares estimation that the mean of the stochastic
term is zero.
Let us recall that we used the quantities S xy,
Sxx and Syy in the last chapter. For convenience
we restate them here.
b1 = Sxy/Sxx
and
236
estimation. In regression analysis we have
basically three types of variation as follows:
RSS= (1-r2)SYY
237
Is called coefficient of determination of the model. It is
the square of the correlation coefficient. It is obtained
also by dividing explained variation by total variation. It
gives the explanatory power of the model. The higher
the value of r2, the more the estimated model is believed
capable of governing data set. That is, the higher the
value of r2 the better is the model fit.
Solution
(a) The specification of the simple regression
model is
where
Y = dependent variable
X = independent variable
and are regression parameters u is the.
error term
238
,Sxy = 26, Sxx = 10, Syy = 138
b1 = Sxy/Sxx
= 26/10 = 2.6
and
= 12 – (2.6)(6) = -3.6
239
Table 13.1: Data on varnish and Drying Time
Varnish 0 1.1 2.2 3.3 4.4 5.4 6.5 7.4 8.5
additive
(gm) X
Time 13.0 11.5 11.0 9.0 8.0 9.0 8.5 9.5 10
Solution :
X (Humidity)
Y (Moisture content)
X 39 32 47 40 45 59 28 34 40 36 52 45 43
Y 14 10 16 11 18 9 11 13 14 12 15 13 12
We shall give limits for the solution of (ii), (iii) and (iv)
(ii) We need ( ) to draw the modified
freehand straight line
=(∑X)/n = 540/13 = 41.54
=(∑Y/n = 168/13 = 12.92
Hence ( ) = (41.54, 12.92). This can now
be used for the modified freehand method for a straight
line required to fit the data set.
241
S/No 1 2 3 4 5 6 7 8 9 10 11 12 13
X 39 32 47 40 45 59 28 34 40 36 62 45 43
Y 14 10 16 11 18 9 11 13 14 12 15 13 12
S/ 7 2 8 10 1 4 9 13 5 12 3 11 6
No
X 28 32 34 36 39 40 40 43 45 45 47 52 59
Y 11 10 13 12 14 11 14 12 18 13 16 15 9
Data in ascending order of X
( ) for the lower half of the data set is (∑x/6, ∑
y /6)
= (209/6, 71/6) = (34.83, 11.83)
For the upper half of the data set ( ) = (291/6, 83/6)
= (48.5, 13.83).
242
13.8 REGRESSION FOR INTRINSICALLY LINEAR
MODELS
Let Y be a nonlinear function of X. This function is
said to be intrinsically linear if we can transform
the nonlinear function to linear by a suitable
algebraic substitution.
Assume the error term is multiplicative for the
following:
(a) y = aex
(b) y = ax3
(c) y = a +/ b logx
(d) y = ax
(e) y = a + b (1/x)
243
a certain college for the past 7 years. Assuming a
multiplicative error term estimate a regression line for the
data according to the relation.
Solution
Given the data
X 1 2 3 4 5 6 7
Y 302 340 390 460 550 673 880
That is
where
.
244
Y = 238.2 (1.192)x
Based on this model, we could expect the enrollment 5
years from now (X = 12) to be
Y = (238.2) (1.192)(12)
= 1960
Problem Set 13
245
e) If one million dollars is put into advertisement, by
how much is sales expected to rise?
Year 1 2 3 4 5 6 7 8 9 10
Y 34.5 34.8 35.0 36.2 37.5 38.7 39.7 40.5 41.6 42.2
X 47.8 48.4 47.6 49.1 51.5 52.8 54.1 55.4 57.2 58.8
246
CHAPTER 14:
(14.1)
where
247
2. (14.2)
is the mean value of y given the independent
variables . The variable y is the
response variable. It is also called the dependent
variable
+e (14.4)
The recovery of y using Equation (14.4) has a lot of
implications and applications in Monte Carlo simulation.
In essence, we can write the estimated model in the form
of Equation (14.3) or Equation (14.4).However, the
estimation of the model (14.1) which results in Equation
(14.3) or (14.4) is based on some underlying classical
assumptions, which we call ordinary least squares(OLS)
assumptions and are given in the next section.
(14.6)
(14.7)
250
Using elementary calculus, we differentiate S partially
with respective to and to get
(14.10)
where
251
First replace 0, 1 and ui in Equation (14.5) by their
respective estimators b0, b1 and ei so that
We have
Yi = b0 + b1 Xi + ei
and if we drop the subscript i, we obtain
(14.12)
Applying the summation operator ∑ through the last
equation, we have
252
and the normal equations are
(14.14)
(14.15)
(14.17)
253
In matrix from (14.17) becomes
(14.18)
Hence, we set ,
to obtain
(14.19)
254
(14.20)
and
(14.22)
X Y XY X2 Y2 Ŷ e = Y -Ŷ
3 6 18 9 36 6.50 -0.50
4 9 36 16 81 8.25 +0.75
2 5 10 4 25 4.75 +0.25
6 11 66 36 121 11.75 -0.75
10 19 190 100 361 18.75 +0.25
25 50 320 165 624 50 0.00
Sum
255
Solution: Using Equation (14.11) we have
(14.23)
256
The quantity r2, called coefficient of determination gives
the proportion of variation in Y explained by X.
Now if the total variation TSS = Syy , then
the variation explained by X or the variation due to the
regression of Y on X, denoted by RSS is
Solution (a)
and
258
where is the value of t – distribution with tail
probability /2.
2. Test statistic:
1, Ho: 1 ≠ 0 Versus H1 : 1 ≠ 0
2. Test statistic:
259
= (0.5 [1/5 + 5/40] = 0.1625
= 0.5 / 40 = 0.0125
Therefore s0 = 0.4031
s1 = 0.1118
= [-0.033, 2.533]
and a 95 percent confidence interval for 1 is
260
Table 14.2: ANOVA for Two-Variable Regression
Source of Sum of Df Mean F
Variation squares square
SS ms
X RSS 1 MRSS F=
Residual ESS n-2 MESS MRSS/MESS
Total TSS n-1
Total 124 4
, = 0.05
We are to test
H0: Regression is not significant
261
Versus
H1: Regression is significant.
Observe that
Hence
262
The quantities are respectively the100(/2)
100(1-/2) percentiles of the distribution. All
percentile are found using (n-2) degrees of freedom (df).
263
We want to do two things here. They are
(14.33)
(14.34)
18.75 ± 3.182
= 18.75 ± 2.04
= [16.71, 20.79 ]
Y= b0 + b1X1 + b2X2 + e
can be obtained using the following formula
(14.35)
(14.36)
(14.37)
265
where s2 is the variance of error term e.
Problem Set 14
Student 1 2 3 4 5 6 7 8 9 10
GPA(Y) 4.22 2.69 4.59 4.93 4.00 3.83 2.66 3.32 3.33 3.42
Maths(x1) 62 48 59 68 61 58 52 51 56 53
Commun 68 59 62 70 70 63 62 73 67 61
ication(x2)
266
where Q = Output
K = Capital input
L = Labour input
= Stochastic disturbance term
e = 2.718
267
and < 1 yields decreasing returns to scale. Which
returns to scale is revealed from your estimation in (a) ?.
270
6. The selling price of a house, Y (in millions of naira) is
believed by estate agents to relate to amount of living
area X1 (in hundreds of square feet), the number of floors
X2, the number of bedrooms X 3 and an index for bathing
facilities (Bathing Facility Index BFI). A random sample of
size 12 from a new GRA in a middle belt city of Nigeria
reveals the following data.
272
ANALYSIS OF CATEGORICAL DATA
15.0 INTRODUCTION
They are
Homogeneity Test:
In this case, we test if proportions of an attribute of
interest from various categories are the same.
In a multinomial experiment with n trials and k outcomes,
are the P’s the same? That is, is it true that
P1 = P2 =…..= Pk ?
This makes it a special case of goodness of fit test. In
the case of goodness of fit test involving multinomial
distribution, we test
H0: P1=P10 , P2 = P20 ,….., Pk = Pk0
275
15.3 ILLUSTRATIONS OF GOODNESS OF FIT
TESTS
Rank of Lecturers P AP SL L1
Observed frequency 90 17 13 80
(oi)
Expected 80 20 10 90
Frequency (ei)
We are to test:
276
= (90 -80)2 /80 + (17 -20)2 /20 + (13 -10)2 /10
+ (80 -90)2 /90
= 3.71
Since
we do not have sufficient evidence to reject H 0: We state
that management policy was followed in the recruitment
exercise.
Example 15.2
Table 15.2: Distribution of Cars showing Tyre Brands
and Durability
277
Moderate 120 93 114 122
Durability
High 55 83 70 46
Durability
Solution
Table 15:3: Computer Output for Data in Table 15:2
22.63 Chi-square
6 Df
278
.0009 p-value
The
where eij = expected frequency for the ijth cell
The quantity eij is given by
That is,
= 22.63
If we denote respectively the number of rows and column
by r and c, the degrees of freedom for the problem is
df = (r-1)(c-1) =(3-1)(4-1) = 6.
279
Example 15.3 The Table 15.3 shows the frequency
distribution of the number of defects per a copy of
magazine called Blosom for a random sample of 1000
mass produced copies of the magazine.
280
Table15:6:Expected Frequencies of the Poisson Data
No of 0 1 2 3 4 5 Total
defects (x)
Observed 560 308 107 21 4 0 1000
Frequency
O
Expected 548.3 329.5 99.0 19.8 3 0.4 1000
Frequency
E
23.2
281
Since
Ho: P1 = P2 = P3 = P4 = 0.25
H1 :At least one Pi is different from 0.25
Observed frequency 90 17 13 80
(o)
Expected frequency e 50 50 50 50
2 = ∑(o –e)2 / e
= (90 – 50)/50 + (17 – 50)2/50 + (13-50)2 /5
+ (80-50)2/50
= 99.16
282
Now for 3df,
Since
2 = 99.16 > ,
we reject Ho. This shows that at least one of the P i’s is
different from 0.25
Problem Set 15
284
1. A survey of 400 respondents resulted in the 2x3
contingency table below
38 36 90
64 56 116
(a) Find the statistic
Male 35 48 76
Female 9 59 30
285
Favor A 77(76) 51(77) 64(70) 50(51)
Do not 123 149 136 150
Favor A
Ward Total 200 200 200 200
(Expected frequencies are in parenthesis)
Take = 0.05
(a) Does this data set confirm that the level of wealth
depends on educational attainment? Test at =
0.01
286
fast-food chain is affected by age. A random
sample of 500 fast food customers aged between
15 and older was obtained giving rise to the
entries below;
CHAPTER 16
NONPARAMETRIC METHODS
16.0INTRODUCTION
287
The tests of Chapter 10, one-sample t test, the two
independent sample t test, the paired t-test and the one-
way analysis of variance F test all assume that samples
come from normally distributed populations or at worst
the populations are mound-shaped and are not highly
skewed either to the left or right. Many times this
normality assumptions fails to hold and we resort to
techniques that do not require assumptions about the
shapes of the probability distributions of the sampled
populations. These techniques are collectively called
non-parametric methods.In these cases we convert all
measurements into ranks.
289
5 Alternative Hypothesis
(a) H1: F1 is shifted to the left of F2 (=>μ1< μ2)
and
(b) H1: F1 is shifted to the right of F 2 (=>μ1> μ2)
and the test is right –tailed)
(c) H1: F1 is shifted to the left or right of F2
6 Decision Rule:
Case (a): H1 :μ1< μ2 , Reject H0 if
T = T1 and T1 ≤ TL
T = T2 and T2 ≥ TU
Note once again, that the test statistic is always the one
associated with the smaller sample size.
290
Table : 16 .1 Visual Acuity of Children
Deaf Children Hearing Children
2.85 1.96
3.15 1.25
3.33 1.66
2.31 1.53
2.65 1.74
1.96 1.26
2.27 2.01
2.47 1.65
2.85 1.86
2.25 1.46
291
So that
292
has an 2 distribution with k-1 degrees of freedom
where n = n1 + n2 +…………..+ nk
T1 = 49.5 T2 = 49.5 T3 = 21
The H statistic is
293
For df = k -1 = 3 -1 =2, = 5.991
Since
H = 5.415 <
the three populations do not differ in location. This was
the same conclusion when we used the parametric
method of one-way ANOVA
295
As an example, if X+ = 1 and X- = 9
Then x0 = 1. Also if x 0 = 1 and n = 10 then for a two –
tailed test at = 0.05, p-value = 2P[X ≤ 1] = 2P [X ≥9] =
0.0214
Example 16.4
The scores of 10, one hundred-level students in Algebra
and Calculus are as given in
296
16.5 THE LARGE- SAMPLE SIGN TEST FOR A
PAIRED EXPERIMENT
For n large enough
297
Example 16.5 . Using the data for Example 16.4 Test H 0:
μ1 = μ2 Versus
(a) H I : μ1 ≠ μ 2
(b) H I : μ1 > μ 2
T+= 54 and T- = 1
(a) H1 : μ1 ≠ μ2
T = min [T+, T- ] = min [ 54, 1] = 1
For = 0.05, T0 = 8
Since T ≤ T0 , we reject H0
298
where μ = n(n+1) / 4 and 2 = n(n+1) (2n+1) / 24
299
Problem Set 16
Sample 1 2 4 3 4 6
Sample 2 5 8 7 9 7
b) State Ho and H1
300
distribution 2? Take and use Wilcoxon rank
sum test.
Property 1 2 3 4 5 6 7 8
Assessor 1 75 87 81 92 66 80 75 77
Assessor 2 74 85 76 89 68 79 74 78
301
6. The following observations are from test scores of
candidates in an aptitude test at four different
locations in the same city. The groups used four
different teaching techniques.
Location 1: 88, 25, 75, 33
Location 2: 24, 80, 30, 70
Location 3: 25, 31, 65, 66
Location 4: 33, 24, 30, 64
302
REFERENCES
303
Bradley R. A (1964) Applications of the Modified Triangle
Test in Sensory Differences Trials, Journals of Food Science
29, 688-672.
305