Statistics For Business Decision Making and Analysis 3rd Edition by Robert Stine Ebook PDF

Statistics for Business: Decision
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ROBERT STINE DEAN FOSTER
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Statistics for Business
Decision Making and Analysis
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Third Edition
ISBN-13: 978-0-13-449716-7
ISBN-10: 0-13-449716-3
9 0 0 0 0
STINE
9 780134 497167
FOSTER
CONTENTS vii
11 Probability Models for Counts 251

11.1 Random Variables for Counts 252
11.2 Binomial Model 254
11.3 Properties of Binomial Random Variables 255
11.4 Poisson Model 259
Chapter Summary 265
12 The Normal Probability Model 270

12.1 Normal Random Variable 271
12.2 The Normal Model 274
12.3 Percentiles 280
12.4 Departures from Normality 282
Chapter Summary 290
CASE: STATISTICS IN ACTION Managing Financial Risk 298
CASE: STATISTICS IN ACTION Modeling Sampling Variation 306
PART III Inference

13 Samples and Surveys 314
13.1 Two Surprising Properties of Samples 315
13.2 Variation 320
13.3 Alternative Sampling Methods 323
13.4 Questions to Ask 326
Chapter Summary 329
14 Sampling Variation and Quality 334

14.1 Sampling Distribution of the Mean 335
14.2 Control Limits 340
14.3 Using a Control Chart 344
14.4 Control Charts for Variation 347
Chapter Summary 354
15 Confidence Intervals 362

15.1 Ranges for Parameters 363
15.2 Confidence Interval for the Mean 368
15.3 Interpreting Confidence Intervals 372
15.4 Manipulating Confidence Intervals 373
15.5 Margin of Error 376
Chapter Summary 384
16 Statistical Tests 391

16.1 Concepts of Statistical Tests 392
16.2 Testing the Proportion 397
16.3 Testing the Mean 404
A01_STIN7167_03_SE_FM.indd 7 12/11/16 10:03 AM

viii CONTENTS
16.4 Significance versus Importance 408

16.5 Confidence Interval or Test? 409
Chapter Summary 413
17 Comparison 420
17.1 Types of Comparisons 421
17.2 Data for Comparisons 421
17.3 Two-Sample z-Test for Proportions 424
17.4 Two-Sample Confidence Interval for Proportions 425
17.5 two-Sample t-Test 429
17.6 Confidence Interval for the Difference Between Means 433
17.7 Paired Comparisons 436
Chapter Summary 446
18 Inference for Counts 453

18.1 Chi-Squared Tests 454
18.2 Test of Independence 454
18.3 General versus Specific Hypotheses 466
18.4 Tests of Goodness of Fit 467
Chapter Summary 477
CASE: STATISTICS IN ACTION Rare Events 484
CASE: STATISTICS IN ACTION Data Mining Using Chi-Squared 491
PART IV Regression Models

19 Linear Patterns 498
19.1 Fitting a Line to Data 499
19.2 Interpreting the Fitted Line 501
19.3 Properties of Residuals 506
19.4 Explaining Variation 508
19.5 Conditions for Simple Regression 510
Chapter Summary 520
20 Curved Patterns 528

20.1 Detecting Nonlinear Patterns 529
20.2 Transformations 531
20.3 Reciprocal Transformation 532
20.4 Logarithm Transformation 538
Chapter Summary 550
21 The Simple Regression Model 557

21.1 The Simple Regression Model 558
21.2 Conditions for the SRM 562
21.3 Inference in Regression 565
21.4 Prediction Intervals 573
Chapter Summary 587

CONTENTS ix
22 Regression Diagnostics 596

22.1 Changing Variation 597
22.2 Outliers 607
22.3 Dependent Errors and Time Series 611
Chapter Summary 622
23 Multiple Regression 630

23.1 The Multiple Regression Model 631
23.2 Interpreting Multiple Regression 632
23.3 Checking Conditions 640
23.4 Inference In Multiple Regression 642
23.5 Steps In Fitting A Multiple Regression 646
Chapter Summary 656
24 Building Regression Models 667

24.1 Identifying Explanatory Variables 668
24.2 Collinearity 673
24.3 Removing Explanatory Variables 678
Chapter Summary 694
25 Categorical Explanatory Variables 703

25.1 Two-Sample Comparisons 704
25.2 Analysis of Covariance 706
25.3 Checking Conditions 711
25.4 Interactions and Inference 712
25.5 Regression with Several Groups 719
Chapter Summary 726
26 Analysis of Variance 736

26.1 Comparing Several Groups 737
26.2 Inference in ANOVA Regression Models 744
26.3 Multiple Comparisons 748
26.4 Groups of Different Size 754
Chapter Summary 759
27 Time Series 768

27.1 Decomposing a Time Series 769
27.2 Regression Models 772
27.3 Checking the Model 782
Chapter Summary 797
CASE: STATISTICS IN ACTION Analyzing Experiments 807
CASE: STATISTICS IN ACTION Automated Modeling 815

x CONTENTS
Appendix: Tables 823

Answers A-1
Credits C-1
Index I-1
Supplementary Material (online-only)
S1 Alternative Approaches to Inference S1-1
S2 Two-Way Analysis of Variance S2-1
S3 Regression with Big Data S3-1

PREFACE
Knowledge of statistics is a great asset in business, but another way to get ahead of the competition, the key is
getting the most value from this asset requires knowing a desire to learn how statistics can produce better de-
how to ask and answer the right questions. Choosing the cisions and insights from the growing amount of data
right question and solving the problem correctly require generated in modern businesses.
an appreciation of business as well as the subtleties of We don’t assume that readers have mastered the do-
statistics. Unless you understand the business issue from mains of a business education, such as economics, fi-
a finance, marketing, management, or accounting per- nance, marketing, or accounting. We do assume, though,
spective, you won’t see how statistics can help solve the that you care how ideas from these areas can improve a
problem. Performing the statistical analysis must wait business. If you’re interested in these applications—and
until you have grasped the issue facing the business. we think you will be—then our examples provide the
background you will need to appreciate why we want
to solve the challenges that we present in each chapter.
Solving Business Problems
Readers with more experience will discover that we’ve
This application-directed approach is key to business simplified the technical details of some applications, such
analytics and shapes our examples. We open each chap- as those in finance or marketing. Even so, we think that
ter with a business question that motivates the contents the examples offer those with substantive experience a
of the chapter. For extra practice, worked-out examples new perspective on familiar problems. We hope that you
within each chapter follow our 4M (Motivation, Method, will agree that the examples are realistic and get to the
Mechanics, Message) problem-solving strategy. The mo- heart of quantitative applications of statistics in business.
tivation sets up the problem and explains the relevance
of the question at hand. We then identify the appropri-
Technology
ate statistical method and work through the mechanics
of its calculation. Finally, the message answers the ques- You cannot do research in modern applied statistics
tion in language suitable for a business presentation or without computing. Data sets have grown in size and
report. Through the 4Ms, we’ll show you how a business complexity, making it impossible to work out the cal-
context guides the statistical procedure and how the re- culations by hand. Rather than dwell on routine cal-
sults determine a course of action. Motivation and Mes- culations, we rely on software (often referred to as a
sage are critical. The Motivation answers the question statistics package) to compute the results. Although we
“Why am I doing this analysis?”. If you cannot answer emphasize the use of technology, we give the formulas
that question, it’s hard to get the statistics correct. The and illustrate the calculations introduced in each chap-
Message has to express your answer in language that ter so that you will always know what the software is
is used in the business world. Understand the business doing. It is essential to appreciate what happens in the
first, then use statistics to help formulate your conclu- calculations: You need to understand how the calcu-
sion. Notice that we said “help.” A statistical analysis by lations are done in order to recognize when they are
itself is not the final answer. You must frame that analy- appropriate and when they fail. That does not mean,
sis in terms that others in the business will understand however, that you need to spend hours doing routine
and find persuasive. calculations. Your time is precious, and there’s only so
Our emphasis on the substantive use of statistics in much of it to go around. We think it makes good eco-
business shapes our view that the ideal reader for this nomic sense to take advantage of modern technology
text is someone with an interest in learning how statis- in order to give us more time to think harder and more
tical thinking improves the ability of a manager to run thoroughly about the motivating context for an applica-
or contribute to a business. Whether you’re an under- tion and to successfully present the business message.
graduate with an interest in business, an MBA looking When we present results obtained with a calcula-
to improve your skills, or a business owner looking for tor or computer, we typically round them. You don’t
xi

xii PREFACE
need to know that the profits from a projected sale examples, and illustrations that stress the impor-
are $123,234.32529. It’s usually better to round such a tance of these connections. For example, previous
number to $123 thousand. To let you know when we’ve editions introduced the 4M paradigm—motivation,
rounded a calculation, we say about or approximately. method, mechanics, and message—that shows how
In expressions, we denote rounding with the symbol < , to combine data and statistics to solve problems in
as in 1/6 < 0.167. business. This edition carries this metaphor further.
To help you learn how to use software, each chapter By explicitly linking this paradigm to analytics, this
includes hints on using Excel®, MinitabExpress®, and edition shows that business analytics requires blend-
JMP® for calculations. These hints won’t replace the help ing substantive relevance with statistical analysis.
provided by your software, but they will point you in the ■■ Up-to-date applications explore problems related to
right direction so that you don’t spin your wheels figur- “big data” and introduce hot topics such as A/B test-
ing out how to get started with an analysis. Supplemental ing that are popular in today’s businesses. Although the
software study cards are available for specific packages. methods behind these new topics are familiar within
statistics, the names are new. This edition makes sure
Data students know the new names so that they can link what
they learn in the classroom to what they read online.
Statistical analysis uses data, and we’ve provided lots ■■ This edition features more than 90 new and updated
of data to give you the opportunity to have some real data sets. The changed data range from examples
hands-on experience. As you read through the chap- used within chapters to those underlying exercises.
ters, you’ll discover a variety of data sets that include Important, highly visible changes include “through
real estate markets, stocks and bonds, technology, retail the cycle” finance and economic time series that
sales, human resource management, and fundamental span the 2008 recession.
economics. These data come from a range of sources, ■■ More than 100 enhanced exercises remove ambi-
and each chapter includes a discussion about where we guities and capture nuances in revised data. Many of
found the data used in examples. We hope you’ll use our these changes address issues identified by tracking
suggestions and find more. online student performance in completing related
exercises in MyStatLab. Problems that were worded
Prerequisite Knowledge in a way that might confuse students were clarified.
To appreciate the illustrative calculations and formulas,
■■ Excel is the workhorse tool of many businesses. This
readers will need to be familiar with basic algebra. Por- edition adds a section to every chapter that shows
tions of chapters that introduce a statistical method of- step by step how to complete analytic exercises with
ten include some algebra to show where a formula comes the latest version of Excel. Excel is the most popular
from. Usually, we only use basic algebra (up through top- software for introductory statistics, but some prefer
ics such as exponents and square roots). Several chapters the features offered by statistics packages such as
make extensive use of the logarithm function. If you’re Minitab or JMP. We’ve retained and updated hints in
interested in business and economics, this is a function each chapter for these as well.
worth getting to know a lot better. The applications we’ve
■■ It’s the little things. Hundreds of changes have been
provided, such as modeling sales or finding the best made throughout this edition to emphasize and clar-
price, show why the logarithm is so important. Occasion- ify key points. For example, this edition highlights
ally, we give credit to calculus for solving a problem, but additional tips throughout the text that help readers
we don’t present derivations using calculus. You’ll do fine recognize important points that might be overlooked.
if you are willing to accept that calculus is a branch of Clarified explanations, analogies, and examples in
more advanced mathematics that provides, among other every chapter encourage students to delve deeper
things, the ability to derive formulas that have special and learn for themselves.
properties. If you do know calculus, you’ll be able to see
where these expressions come from.
COVERAGE AND ORGANIZATION
We have organized the chapters of this book into four
WHAT’S NEW IN THIS EDITION parts:
This edition adds more of what readers have found re- 1. Variation
ally useful: 2. Probability
3. Inference
■■ Business analytics relies on linking data to business
4. Regression Models
decisions. Businesses ranging from traditional banks
to the latest game developers are clamoring for em- Part I. These chapters introduce summary statistics
ployees who can connect data and models to substan- such as the mean and important graphical summaries,
tive business problems. This edition adds emphasis, including bar charts, histograms, and scatterplots. Even

PREFACE xiii
if you are familiar with these methods, we encourage Case Studies

you to skim the examples in these chapters. These ex-
Each of the four main parts of this book includes two
amples introduce important terminology that appears
supplemental case studies called Statistics in Action.
in subsequent chapters. A quick review will introduce
Each case study provides an in-depth look at a business
the notation that we use (which is rather standard) as
application of statistics. Every case uses real data and
well as give you a chance to look at some interesting
takes students through the details of using those data to
data. If you do skip past these, take advantage of the
address a business question. For example, a case study
index of Key Terms in each chapter to find definitions
for Part 1 explains details of stock market data, such
and examples.
as how stock returns account for dividends, and elabo-
Part II. Many courses in mathematics now include topics rates the nuances of financial data beyond the coverage
from probability. Even if you have seen basic probability, in the surrounding chapters.
you might benefit from reviewing how methods, such as We’ve found that it is easy to have a “chapter-centric”
Bayes’ Rule, can be used to improve business processes view of any subject; you know how to approach a prob-
(Chapter 8). If you plan to skip or move briskly through lem if the question identifies a chapter. Executing the
the rest of the chapters in Part 2, be sure that you’re famil- right approach is more difficult without that sort of clue.
iar with the concept of a random variable (Chapter 9). Sta- Case studies allow us to extend the statistical con-
tistical models use random variables to present an ideal- cepts introduced in the accompanying chapters in the
ized description of the data in applications. Unless you’re context of a longer, more complex case. For example,
familiar with random variables, you won’t appreciate the the second case in Part 1 carefully explains how to in-
important assumptions that come with their use in prac- terpret and use logarithms in the context of executive
tice. Chapter 11 describes special random variables used salaries. A case in Part 3 explores the use of many chi-
to model counts, and Chapter 12 defines normal random squared tests in an operations management problem
variables that appear so often in statistical models. that resembles data mining. While logs, chi-squared
tests, and issues of multiple testing all appear in the
Part III. This part presents the foundations for statistical
regular flow of the main chapters, case studies provide
inference, the process of inferring properties of an entire
a means for us to cover these topics in more detail than
population from those of a subset known as a sample.
we thought was appropriate for everyone.
Even if you are not interested in quality control, we en-
courage you to read Chapter 14. Chapter 14 uses quality
control to introduce a fundamental concept of inferential Supplementary Chapters
statistics, the sampling distribution and standard error.
For this edition, we’ve added a few supplementary chap-
You can get by in statistics with a basic understanding of
ters that are available online. These cover topics that are
the concept of a sampling distribution, but the more you
less common in the typical business stats course, but of-
know about sampling distributions, the better. Each in-
ten useful. One chapter covers methods that are needed
ferential procedure comes with a checklist of conditions
when the usual approaches don’t apply. For example,
that tell you whether your data and situation match up
suppose data are so skewed that one cannot use stan-
to the various inferential techniques in these chapters.
dard methods for building a confidence interval for the
Part IV. The chapters in Part 4 describe regression mod- mean. What are you to do? The supplemental chapter
eling. Regression modeling allows us to associate how Alternative Approaches to Inference gives an answer.
differences in data that describe one phenomenon are Two other supplemental chapters go deeper into regres-
related to differences in others. Regression models are sion modeling. The chapter Two-Way Analysis of Vari-
among the most powerful ways to use statistics in busi- ance goes beyond Chapter 26 and looks at two-way (and
ness, providing methods for assessing profitability, setting higher) analysis of variance, including those with ran-
prices, identifying anomalies, and generating forecasts. domized blocking and interactions. The chapter Regres-
We encourage you to slow down and take your time study- sion Modeling with Big Data goes beyond Chapter 24
ing these chapters. Even if you don’t see yourself doing and the Statistics in Action cases with coverage of how to
statistics in your career in business, you can be sure build regression models when confronted by “big-data”
that you will be presented with the results of regression issues that have become more common in business.
models. Because the examples in these chapters allow
us to describe the interconnectedness of several busi-
ness processes at once, they become even more interest-
ing than those in prior chapters. Be careful if you skip
FEATURES
Chapter 20. The material in this chapter shows how to Motivating Examples. Each chapter opens with a
model a richer set of patterns and is less common in business example that frames a question and motivates
business textbooks, but we think these ideas are an es- the contents of the chapter. We return to the example
sential component of every manager’s tool set. throughout the chapter, as we present the statistical

xiv PREFACE
methods that provide answers to the question posed in Software Hints. Each chapter includes hints on using
the opening example. Excel, Minitab, and JMP for calculations. These hints
give students a jumping off point for getting started
The 4M (Motivation,
4M Analytics Examples doing statistical analysis with software. Supplemental
Method, Mechanics, study cards for these and other software packages are
Message) problem-solving strategy gives students a clear available from the publisher.
outline for solving any business problem. Each 4M ex-
ample first expresses a business question in context, Behind the Math. At the end of most chapters, a Be-
then guides students to determine the best statistical hind the Math section provides interesting technical
method for working the problem using statistical soft- details that explain important results, such as the jus-
ware, and, finally, frames the analysis in terms that oth- tification or interpretation for an underlying formula.
ers in the business world will understand. If you are so inclined, they will help you appreciate the
subtleties and logic behind the mechanics, but they are
Short question sets not necessary for using statistics.
What Do You Think? throughout each chapter
give students the opportunity to check their under- Chapter Summary. These chapter-ending summaries
standing of what they’ve just read. These questions are provide a complete review of the content.
intended to be a quick check of key concepts and ideas
presented in the chapter; most questions involve very ■■ Key Terms We provide an index of the chapter’s key
little calculation. Answers are located in a footnote so terms at the end of each chapter to give students a
that students can easily check their answers before quick and easy way to return to important definitions
moving on in the text. in the text.
■■ Objectives This new feature provides a list of what
Tips. We highlight useful hints for applying sta- students should understand after having read a
tip tistical methods within the exposition so that chapter.
students don’t miss them. ■■ Formulas Important formulas introduced within the
chapter are restated.
Caution. You’ll see the caution icon next
■■ About the Data This feature provides sources for the
caution data used throughout the chapter with further back-
to material that might be confusing. You
should be extra careful to make sure you understand ground.
the material being discussed.
Exercises. Each chapter contains a variety of exercises
✓ Checklist. Some statistics presume that the informa- at escalating levels of difficulty in order to give students
tion presented satisfies several conditions or assump- a full complement of practice in problem solving using
tions. For example, certain statistics only detect pat- the skills they’ve learned in the chapter. Types of ex-
terns that resemble lines. You would not want to use ercises include Matching, True/False, Think About It,
these if you were looking for a curve. To help you keep You Do It, and 4M Exercises. You’ll find the data for the
track of the assumptions, the conditions are collected 4M and You Do It exercises on Pearson’s Math and Sta-
in a checklist. tistics Resources Website: http://www.pearsonhighered
.com/mathstats
Best Practices. At the end of each chapter, we include ■■ Matching and True/False exercises test students’ abil-
a collection of tips for applying the chapter’s concepts ity to recognize the basic mathematical symbols and
successfully and ethically. terminology they have learned in the chapter. We
avoid unnecessary formulas, but certain symbols
Pitfalls. Most of the unintentional mistakes people make and terminology show up so often that students are
when learning statistics are avoidable and usually come well served to recognize them.
from using the wrong method for the situation or misinter- ■■ Think About It exercises ask students to pull together
preting the results. This feature at the end of each chapter the chapter’s concepts in order to solve conceptual
provides useful tips for avoiding common mistakes. problems. You don’t need a computer or calculator
Data Analytics: The authors analyzed aggregated student for most of these.
usage and performance data from MyStatLab™ for the ■■ You Do It exercises give students practice solv-
previous edition of this text. The results of this analysis ing problems that reinforce the mechanics they’ve
helped improve the quality and quantity of exercises that learned in the chapter. These exercises apply the
matter the most to instructors and students. methods of the chapter to data related to a business

PREFACE xv
application. Working through the steps of these ex- ■■ 4M Analytics exercises are rich, challenging applica-
ercises helps you practice the mechanics. We expect tions rooted in real business situations. These ask
you to use a statistics software package for many of students to apply the statistical knowledge they’ve
these. developed in the chapter to a set of questions about a
particular business problem.
ACKNOWLEDGMENTS
We didn’t develop our approach to business statistics Joan Donohue, University of South Carolina
in isolation. Our colleagues at Wharton have helped Steve Erikson, Babson College
shape our approach to teaching statistics in business.
Nancy Freeman, Shelton State Community College
Many of the ideas and examples that you’ll find here
arose from suggestions made by colleagues, including Daniel Friesen, Midwestern State University
Andreas Buja, Sasha Rakhlin, Paul Shaman, Richard Deborah J. Gougeon, University of Scranton
Waterman, and Adi Wyner. Over the years, members of Christian Grandzol, Bloomsburg University
our department have come to share a common attitude
Betsy Greenberg, University of Texas—Austin
toward the use of statistics in business, and this text re-
flects that shared perspective. Most of the examples and Ken Griffin, University of Central Arkansas
many exercises from the text have been tried in other John Grout, Berry College
classes and improved using that feedback. We owe Warren Gulko, University Of North
these friends a debt of gratitude for their willingness to Carolina, Wilmington
talk about the fundamental use of statistics in business
Marie Halvorsen-Ganepola, Notre Dame University
and to explore alternative explanations and examples.
Many thanks to the following reviewers for their Clifford B. Hawley, West Virginia University
comments and suggestions during the revision of this Bob Hopfe, California State University—Sacramento
text. Max Houck, West Virginia University
David Hudgins, University of Oklahoma
Kunle Adamson, DeVry University
Jeffrey Jarrett, University of Rhode Island
Elaine Allen, Babson College
Chun Jin, Central Connecticut State University
Randy Anderson, California State University—Fresno
Christopher K. Johnson, Ph.D. University of
Djeto Assane, University of Nevada, Las Vegas North Florida
Rajesh K. Barnwal, Middle Tennessee State University Morgan Jones, University of North Carolina
Dipankar Basu, Miami University Ronald K. Klimberg, Saint Joseph’s University
Mark Bloxom, Alfred State College SUNY College of David Kopcso, Babson College
Technology
Supriya Lahiri, University of Massachusetts, Lowell
Hannah Bolte, Indiana University Bloomington
Mark T. Leung, University of Texas—San Antonio
David Booth, Kent State University, Main Campus
Tony Lin, Ph.D., University of Southern California
John E. Boyer, Jr., Kansas State University
John McKenzie, Babson College
Michael Braun, Southern Methodist University
Kay McKinzie, University of Central Arkansas
Daniel G. Brick, University of St. Thomas
Mark R. Marino, Niagara University
Nancy Burnett, University of Wisconsin—Oshkosh
Dennis Mathaisel, Babson College
Richard Cleary, Bentley College
Sherryl May, University of Pittsburgh
Ismael Dambolena, Babson College
Bruce McCullough, Drexel University
Anne Davey, Northeastern State University
Richard McGowan, Boston College
Dr. Michael Deis, Clayton University
Constance McLaren, Indiana State University
Frederick W. Derrick, Loyola University Maryland
Robert Meeks, Pima Community College
Neil Desnoyers, Drexel University
Jeffrey Michael, Towson University

xvi PREFACE
Prakash Mirchandani, University of Pittsburgh Omeed Selbe, University of Southern California

Jason Molitierno, Sacred Heart University Gary Smith, Florida State University
Carolyn H. Monroe, Baylor University Erl Sorensen, Bentley College
Gourab Mukherjee, University of Southern California Bert Steece, University of Southern California
Patricia Ann Mullins, University of J. H. Sullivan, Mississippi State University
Wisconsin—Madison Dr. Kathryn A. Szabat, LaSalle University
Quinton J. Nottingham, Virginia Polytechnic & Rajesh Tahiliani, University of Texas—El Paso
State University
Patrick A. Thompson, University of Florida
Keith Ord, Georgetown University
Denise Sakai Troxell, Babson College
Michael Parzen, Emory University
Bulent Uyar, University of Northern Iowa
M. Patterson, Midwestern State University
John Wang, Montclair State University
Robert Pred, Ph.D., Temple University
Dr. William D. Warde, Oklahoma State University,
Leonard Presby, William Paterson University Main Campus
Darrell Radson, Drexel University Elizabeth Wark, Worcester State University
Farhad Raiszadeh, University of James Weber, University of Illinois—Chicago
Tennessee—Chattanooga
Fred Wiseman, Northeastern University
Ranga Ramasesh, Texas Christian University
Roman Wong, Barry University
Deborah Rumsey, The Ohio State University
Zhiwei Zhu, University of Louisiana at Lafayette
John Saber, Babson College
Dr. Subarna Samanta, The College of New Jersey We would also like to thank our accuracy checkers
Subarna Samanta, The College of New Jersey Caroline Swift and Dirk Tempelaar. Thanks also to
Hedayeh Samavati, Indiana University—Purdue Lifland et al., and our Pearson Education team for their
Fort Wayne help and support, especially: Deirdre Lynch, Erin Kelly,
Peggy McMahon, Justin Billing, Jennifer Myers, and
Rose Sebastianelli, University of Scranton
Aimee Thorne.

Resources for Success
Student Resources Online Test Bank
Online Test Bank, by Paul Lorczak
Student’s Solutions Manual This test bank contains ready-to-use quizzes and
Student’s Solutions Manual, by Zhiwei Zhu, Univer- tests that correlate to chapters in the text. The test-
sity of Louisiana, Lafayette bank is available for download from Pearson Educa-
This manual provides detailed, worked-out solu- tion’s online catalog (http://www.pearsonhighered
tions to all odd-numbered text exercises. (ISBN-10: .com/irc).
0-13-449736-8; ISBN-13: 978-0-13-449736-5)
TestGen®
Study Cards for Business
TestGen® (www.pearsoned.com/testgen) enables
Statistics Software instructors to build, edit, print, and administer tests
This series of study cards provides students with using a computerized bank of questions developed
easy step-by-step instructions for using statistics to cover all the objectives of the text. TestGen is al-
software. Available for native Excel® 2016 (0-13- gorithmically based, allowing instructors to create
457679-9) Excel 2016 with XLStat™ (0-13-457683-7), multiple but equivalent versions of the same ques-
Minitab 17 (0-13-457681-0), Minitab Express for PC tion or test with the click of a button. Instructors can
(0-13-457685-3), Minitab Express for Mac (0-13- also modify test bank questions or add new ques-
457691-8), JMP (0-321-64423-9), and StatCrunch™ tions. The software and testbank are available for
(0-13-397513-4) download from Pearson Education’s online catalog
(http://www.pearsonhighered.com/irc).
Instructor Resources
Instructor’s Edition Technology Resources
This version of the text contains short answers to all
of the exercises within the exercise sets. (ISBN-10:
Data Sets
Data sets formatted for Minitab, Excel, JMP, and text
0-13-449738-4; ISBN-13: 978-0-13-449738-9)
files can be downloaded from MyStatLab or www
Instructor’s Solutions Manual, .pearsonhighered.com/mathstatsresources/.
Instructor’s Solutions Manual, by Zhiwei Zhu, Uni-
versity of Louisiana, Lafayette Business Insight Videos
This manual provides detailed, worked-out solu- This series of ten 5- to 7- minute videos, each about
tions to all of the book’s exercises. The Instruc- a well-known business and the challenges it faces,
tor’s Solutions Manual is available for download in focuses on statistical concepts as they pertain to
MyStatLab and from Pearson Education’s online the r eal world. The videos can be downloaded from
catalog (http://www.pearsonhighered.com/irc). within MyStatLab. Contact your Pearson represen-
tative for details.
Business Insight Video
Assessment Questions MyStatLab™ Online Course
Written to accompany the Business Insight Videos, (access code required)
these video-specific questions and answers can MyStatLab from Pearson is the world’s leading on-
be used for assessment or classroom discussion. line resource for teaching and learning statistics;
These are available for download from MyStatLab integrating interactive homework, assessment, and
or at www.pearsonhighered.com/irc. media in a flexible, easy-to-use format. MyStatLab is
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a course management system that helps individual NY, to demonstrate important statistical con-
students succeed. cepts through interesting stories and real-life
events. This series of 24 fun and engaging vid-
■■ MyStatLab can be implemented successfully in
eos will help students actually understand sta-
any environment—lab-based, traditional, fully
tistical concepts. Available with an instructor’s
online, or hybrid—and demonstrates the quan-
user guide and assessment questions.
tifiable difference that integrated usage has on
student retention, subsequent success, and ■■ Business Insight Videos [for Business Statis-
overall achievement. tics only]: 10 engaging videos show managers
at top companies using statistics in their ev-
■■ MyStatLab’s comprehensive gradebook automat- eryday work. Assignable question encourage
ically tracks students’ results on tests, quizzes, discussion.
homework, and in the study plan. Instructors can
■■ Additional Question Libraries: In addition to al-
use the gradebook to provide positive feedback
gorithmically regenerated questions that are
or intervene if students have trouble. Gradebook
aligned with your textbook, MyStatLab courses
data can be easily exported to a variety of spread-
come with two additional question libraries:
sheet programs, such as Microsoft Excel.
MyStatLab provides engaging experiences that per-
■■ 450 exercises in Getting Ready for Statistics
sonalize, stimulate, and measure learning for each cover the developmental math topics stu-
student. In addition to the resources below, each dents need for the course. These can be as-
course includes a full interactive online version of signed as a prerequisite to other assignments,
the accompanying textbook. if desired.
■■ Personalized Learning: MyStatLab’s personal-

■■ 1000 exercises in the Conceptual Question Li-
ized homework, and adaptive and companion brary require students to apply their statistical
study plan features allow your students to work understanding.
more efficiently spending time where they really ■■ StatCrunch™: MyStatLab integrates the web-based
need to. statistical software, StatCrunch, within the online
■■ Tutorial Exercises with Multimedia Learning Aids: assessment platform so that students can eas-
The homework and practice exercises in MyStat- ily analyze data sets from exercises and the text.
Lab align with the exercises in the textbook, and In addition, MyStatLab includes access to www
most regenerate algorithmically to give students .statcrunch.com, a vibrant online community where
unlimited opportunity for practice and mastery. users can access tens of thousands of shared data
Exercises offer immediate helpful feedback, sets, create and conduct online surveys, perform
guided solutions, sample problems, animations, complex analyses using the powerful statistical
videos, statistical software tutorial videos and software, and generate compelling reports.
eText clips for extra help at point-of-use. ■■ Statistical Software, Support and Integration:
■■ Learning Catalytics™: MyStatLab now provides We make it easy to copy our data sets, from both
Learning Catalytics—an interactive student re- the eText and the MyStatLab questions, into soft-
sponse tool that uses students’ smartphones, ware such as StatCrunch, Minitab®, Excel®, and
tablets, or laptops to engage them in more so- more. Students have access to a variety of sup-
phisticated tasks and thinking. port tools—Technology Tutorial Videos, Technol-
■■ Videos tie statistics to the real world. ogy Study Cards, and Technology Manuals for
select titles—to learn how to effectively use sta-
■■ StatTalk Videos: Fun-loving statistician An-
tistical software.
drew Vickers takes to the streets of Brooklyn,
www.mystatlab.com

MathXL® for Statistics Online eos accompanying texts with copyright 2009 and
Course (access code required) later have closed captioning.
MathXL® is the homework and assessment engine ■■ More information on this functionality is avail-
that runs MyStatLab. (MyStatLab is MathXL plus a able at http://mystatlab.com/accessibility.
learning management system.)
And, MyStatLab comes from an experienced partner
With MathXL for Statistics, instructors can: with educational expertise and an eye on the future.
■■ Create, edit, and assign online homework and ■■ Knowing that you are using a Pearson product
tests using algorithmically generated exercises means knowing that you are using quality content.
correlated at the objective level to the textbook. That means that our eTexts are accurate and our
■■ Create and assign their own online exercises and assessment tools work. It means we are commit-
import TestGen tests for added flexibility. ted to making MyStatLab as accessible as possible.
■■ Maintain records of all student work, tracked in ■■ Whether you are just getting started with
MathXL’s online gradebook. MyStatLab, or have a question along the way, we’re
here to help you learn about our technologies and
With MathXL for Statistics, students can: how to incorporate them into your course.
■■ Take chapter tests in MathXL and receive person- To learn more about how MyStatLab combines prov-
alized study plans and/or personalized home- en learning applications with powerful assessment,
work assignments based on their test results. visit www.mystatlab.com or contact your Pearson
■■ Use the study plan and/or the homework to link representative.
directly to tutorial exercises for the objectives
they need to study. PowerPoint Lecture Slides
■■ Students can also access supplemental anima- PowerPoint Lecture Slides provide an outline for
tions directly from selected exercises. use in a lecture setting, presenting definitions, key
■■ Knowing that students often use external statisti- concepts, and figures from the text. These slides
cal software, we make it easy to copy our data are available within MyStatLab or at www.pearson-
sets, both from the eText and the MyStatLab highered.com/irc.
questions, into software like StatCrunch™, Minitab,
Excel and more.
StatCrunch
StatCrunch is powerful Web-based statistical soft-
MathXL for Statistics is available to qualified
ware that allows users to perform complex analyses,
adopters. For more information, visit our Web
share data sets, and generate compelling reports of
site at www.mathxl.com, or contact your Pearson
their data. The vibrant online community offers tens
representative.
of thousands of data sets for students to analyze.
■■ Collect. Users can upload their own data to Stat-
MyStatLab Accessibility Crunch or search a large library of publicly shared
■■ MyStatLab is compatible with the JAWS screen data sets, spanning almost any topic of interest.
reader, and enables multiple-choice, fill-in-the- Also, an online survey tool allows users to quickly
blank and free-response problem-types to be collect data via Web-based surveys.
read, and interacted with via keyboard controls ■■ Crunch. A full range of numerical and graphical
and math notation input. MyStatLab also works methods allow users to analyze and gain insights
with screen enlargers, including ZoomText, from any data set. Interactive graphics help users
MAGic®, and SuperNova. And all MyStatLab vid- understand statistical concepts, and are available
www.mystatlab.com

for export to enrich reports with visual represen- and Minitab Express available ensures students can
tations of data. use the software for the duration of their course.
■■ Communicate. Reporting options help users cre- (ISBN-10: 0-13-445640-8; ISBN-13: 978-0-13-445640-9)
ate a wide variety of visually appealing represen-
tations of their data.
JMP Student Edition
JMP Student Edition is an easy-to-use, streamlined
Full access to StatCrunch is available with a
version of JMP desktop statistical discovery soft-
MyStatLab and StatCrunch is available by itself to
ware from SAS Institute, Inc., and is available for
qualified adopters. For more information, visit our
bundling with the text. Check with your Pearson
Web site at www.StatCrunch.com, or contact your
sales representative for order information. (ISBN-
Pearson representative.
10: 0-13-467979-2; ISBN-13: 978-0-13-467979-2)
XLSTAT™ for Pearson

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INDEX OF APPLICATIONS
CO ∙ Chapter Opener; IE ∙ In-Text Example; WT ∙ What Do You Think?; 4M ∙ Motivation, Method, Mechanics, Message;
P ∙ Pitfalls; BP ∙ Best Practices; AE ∙ Analytics in Excel; AD ∙ About the Data; BTM ∙ Behind the Math; TAI ∙ Think About It;
YDI ∙ You Do It; SA ∙ Statistics in Action; QT ∙ Questions for Thought
Accounting Dealer Earnings per Day (TAI) 266
Door Seam of a Vehicle (YDI) 359
Accounting Firm Filing Tax Forms (TAI) 295
Fatal Roll-Over Accidents (4M) 35–36; (AE) 40–41
Accounting Procedures (TAI) 332
Favorite Car Color (TAI) 103
Auditing a Business (4M) 178
Fuel Consumption in Cars (CO) 528; (IE) 529–538
Auditor Checking Transactions (WT) 368
Leasing Cars (4M) 390
Auditor Comparing Billable Invoices (TAI) 728
Male Drivers Involved in Serious Accidents (YDI) 296
Budget Allocation of a New Business (4M) 701–702
Motor Shafts in Automobile Engines (YDI) 359
Cost Accounting (4M) 139
Predicting Sales of New Cars (4M) 775–778; (AE) 792–793
Research and Development Expenses (YDI) 525, 593, 626, 663,
Price of New Cars (WT) 632
699, 732
Pricing of a Car (IE) 7–9
Rated Highway Gasoline Mileage (YDI) 77
Advertising Stopping Distances (YDI) 765
Advertising Among Internet Hosts (CO) 83; (IE) 80–83, 180–185; Trade in Asian Models (TAI) 44
(WT) 183 Trade in Domestic Models (TAI) 44
Advertising and Sales (IE) 559–561; (TAI) 591 Used Cars (WT) 14; (TAI) 76; (YDI) 449, 553–554
Advertising Firm Renewing Contract (TAI) 175
App advertising 187–190 Banking
Direct Mail Advertising (4M) 418
Adjustable Rate Mortgage (TAI) 74
Display Space (YDI) 553
ATM (YDI) 221
Evaluating a Promotion (4M) 435–436
Bank Collecting Data on Customers (TAI) 23, 24
Financial Advisor (YDI) 804
Banks Compete by Adding Special Services (YDI) 418
Judging the Credibility of Advertisements (4M) 751–754; (AE)
Basel II Standards for Banking (TAI) 386–387
756–758
Check Fees (TAI) 23
Monthly Sales and Advertising (P) 513
Credit Card Offer (CO) 362; (IE) 363, 366–367, 370–371, 374, 409
New Advertising Program (TAI) 449
Credit Card Profit Earned from a Customer (IE) 375–376
Pharmaceutical Advertising (CO) 251–251
Credit Cards (IE) 372; (AE) 472–473; (4M) 527
Priming in Advertising (4M) 723–725
Credit Risk (IE) 185
Promotion Response (4M) 389–390
Direct Deposits for Employees (TAI) 331
Television Advertising (TAI) 102
Federal Regulators Requiring Bank to Maintain Cash Reserves
Television Commercials (4M) 403; (AE) 411; (TAI) 416
(IE) 373
Loan Approval (IE) 161; (WT) 166
Agriculture Loan Balances (TAI) 74
Blood Sample from Cattle (WT) 319 Loan Defaults (YDI) 267–268
Dairy Farming (YDI) 267 Manager Tracking Bank Transactions (YDI) 267
Food-Safety Inspectors Visiting Dairy Farms (TAI) 331 Mortgage Loan Defaults (WT) 161–161
Grain Produced per Acre (CO) 736 On Time Loan Repayment (IE) 166–167
Wheat Trials (IE) 737–742, 744–754; (TAI) 763 Profit for a Bank (IE) 374–375
Size of Credit Card Transactions (IE) 321–322
Subprime Mortgages (4M) 646–650; (AE) 651–653
Automotive
Auto Dealer Attending Car Auctions (TAI) 592 Business (General)
Residual Car Values (4M) 665
Base Price and Horsepower of Cars (YDI) 525–526, 593, 627, Auto Dealer (TAI) 173
663–664, 699–700, 732–733 Bookstore (YD I) 804
Buying Tires at an Auto Service Center (WT) 205; (IE) 212 Catalog Sales Companies (TAI) 387
Car Theft (4M) 86–88; (AE) 98 Clothing Buyer for a Chain of Department Stores (TAI) 386
Cars in 1989 (4M) 555 Company Free Giveaways (IE) 207–208
Customer Options When Ordering a New Car (YDI) 198 Company Stocking Shelves in Supermarkets (YDI) 416, 422
xxi

xxii INDEX OF APPLICATIONS
Customer Focus (4M) 19 Convenience Store Shopper Choosing Food (TAI) 173; (WT)
Data-driven Culture (TAI) 45 231–232
Display Space (TAI) 765 Cost of Diamonds (IE) 271–272, 499, 503–504; (YDI) 730
Employee Absences (YDI) 48 Customer Preferences of a New Product (TAI) 102
Employee Drug Testing (TAI) 197–198 Customer Rating a Power Tool (TAI) 591
Fast-Food Restaurant Chains (YDI) 176, 177; (WT) 253 Customer Satisfaction with Calls to Customer Service (CO) 156;
Forecasting Profits (4M) 787–790; (AE) 794–795 (IE) 157–159; (BP) 169; (TAI) 172–173; (YDI) 175, 200
Gross Profit (YDI) 804 Diamond Ring Prices (YDI) 523–524, 592, 625
Growth Industries (4M) 49–50 Drive Preferences (YDI) 135
Large Company Correlation (IE) 126–127 Emerald Diamonds (YDI) 730
Mail-Order Catalog (TAI) 74 Estimating Consumption (4M) 504–506; (AE) 514–516
Multinational Retail Company (TAI) 523 Gasoline Prices (4M) 805–806
Optimal Pricing (4M) 543–545; (AE) 546–548; (BTM) 550 Gasoline Sales (YDI) 104
Price and Weights of Diamonds (WT) 114; (TAI) 134, 591; Gold Chain Prices (YDI) 661, 698
(CO) 498; (IE) 499–504, 507–509, 529, 576 Guest Satisfaction (4M) 332
Price Scanners at Check-Out Registers (TAI) 76 Lease Costs (4M) 511–512; (AE) 517–518
Reams of Paper Used in an Office (YDI) 220 Pant Choices at a Clothing Store (TAI) 173
Repairing an Office Machine (YDI) 221 Purchasing Habits (TAI) 45
Restaurant Chain Choosing a Location (CO) 630 Rating Hotel Chains (TAI) 23
Revenue Generated by Individual Sales Representatives (TAI) Spending at a Convenience Store (TAI) 45; (YDI) 524, 592,
727–728 625–626, 661–662, 698, 730
Sales by Day of the Week (TAI) 74
Shopping Mall Environment (TAI) 74 Demographics
Start-Up Company (TAI) 24, 48
Supermarket Scanner Data (4M) 200 Ages of Shoppers (TAI) 75
Technology Businesses Moving Corporate Headquarters near a Heights of Students (TAI) 74
Mall (WT) 639 Number of Children of Shoppers in a Toy Store (TAI) 75
Value of New Orders for Computers and Electronics (WT) 772
Women-Owned Businesses (YDI) 48 Distribution and Operations Management
Assembly Line Production (TAI) 358
Company Names Book Shipments to University Bookstores (YDI) 388
Apple (TAI) 45 Cost of Building Cars at Plants (TAI) 728
Amazon (CO) 26; (IE) 27, 32, 38; (P) 40 Customized Milling Operation (TAI) 523
Bike Addicts (CO) 10; (IE) 12, 14, 17, 22 Delivery Stops for a Freight Company (YDI) 247
Dell Revenue and Inventories (TAI) 800–801 Efficiency of Automated Factories (TAI) 728
Facebook 176 Forecasting Inventory Levels at Wal-Mart (YDI) 803, 804
Ford (WT) 326 Importer of Electronic Goods (YDI) 417
Intel (IE) 772 Imports (YDI) 803–804
L.L. Bean (TAI) 387 Maintenance Staff of a Large Office Building (YDI) 220
Levi Strauss (IE) 18 Managing Inventories (SA) 491–493
Lockheed Martin (IE) 35 Number of Employees and Items Produced (TAI) 134
Netflix (TAI) 44–45 Operating Margin of a National Motel Chain (TAI) 661
Target (CO) 10; (4M) 125; (YDI) 552–553 Overnight Shipping Firm (YDI) 763–764
Wal-Mart (CO) 10, 703; (4M) 451–452; (IE) 15, 17, 18, 125, 151, Package Delivery Service and Fuel Costs (TAI) 523
320, 703, 715; (SA) 491; (YDI) 552, 804 Packages Processed by Federal Express (TAI) 75
Packaging Types (SA) 491–495; (QT) 495–496
Performance of Two Shipping Services (IE) 89–90
Construction
Planning Operating Costs (4M) 249–250
City Building a New Public Parking Garage (YDI) 387 Production Costs (YDI) 524–525, 592–593, 626, 662, 698, 731
Construction Estimates (4M) 240–241; (AE) 242 Production Line Filling Bottles (TAI) 358
Construction Firm Bidding on a Contract (YDI) 219, 248 Production Time and Number of Units (WT) 505–506
Contractor Building Homes in a Suburban Development (TAI) Seasonal Component of Computer Shipments (IE) 770–771
295 Shipping Companies (YDI) 450
Contractor Replaces Windows and Siding in Suburban Homes Shipping Computer Systems (TAI) 103
(WT) 639, 643 State of a Production Line (IE) 340–343, 345–346
Cost of Building an Elementary School (TAI) 523 Value of Shipments of Computers and Electronics (CO) 768; (IE)
Housing Permits and Construction (YDI) 804–805 770–771, 773–775, 778–784; (TAI) 800
Kitchen Remodeling (TAI) 246 Windows Shipped Daily (IE) 212–213
Wine Exports (IE) 33–34
Consumers
E-Commerce
Bargain on Blouses (YDI) 199
Buying a Laptop (YDI) 176 A/B Testing of Web Site Design (IE) 428–429
Buying Running Shoes (TAI) 174 Click fraud (YDI) 389
Cell Phone Subscribers (4M) 614–615; (AE) 620–621; (YDI) 802 Filtering Junk Mail (4M) 193–194; (CO) 391; (IE) 392–393, 402;
Choices for Paint Colors and Finishes at a Hardware Store (TAI) (TAI) 416
103–104 Internet Ad Spending (CO) 26

INDEX OF APPLICATIONS xxiii
Internet Browsers (YDI) 49 Finance and Investments

Internet Hosts (IE) 28–30, 32; (P) 40
Apple Stock (YDI) 222, 526–527, 594, 628, 665, 701
Monitoring an E-mail system (4M) 360
Bond Ratings (TAI) 103
Recipe Source (IE) 33
Calendar Effects on Stocks (4M) 767
Web Purchases (4M) 50; (TAI) 266, 416
Capital Asset Pricing Model (CO) 667; (IE) 668–669; (TAI) 697;
Web Hits (YDI) 360; (AE) 474–476
(4M) 594–595
Web Site Monitoring the Number of Customer Visits (TAI)
Cash or Credit Card (YDI) 137, 268
762–763
Climate Change (4M) 577–580; (AE) 583–586
Web Site of a Photo Processor (TAI) 359
Comparing Returns on Investments (4M) 406–408
Web Site to Take Photography Lessons (TAI) 799
Continuous Compound Interest (BTM) 489
Web Site Visitors Clicking on an Ad (TAI) 174
Credit Rating Agency (TAI) 173
Credit Risk (4M) 766–767
Economics Credit Scores (4M) 79, 223
Consumer Sentiment and Inflation (TAI) 134 Day Trading (CO) 202; (WT) 214
Dollar/Euro Exchange Rate (IE) 229, 374 Defaults on Corporate Bonds (SA) 485
Economic Time Series (4M) 24 Disney Stock (YDI) 222
Estimating the Rise of Prices (4M) 324–326 Disposable Income and Household Credit Debt (TAI) 696
Exchange Rate (YDI) 220, 221; (4M) 229–230 Enron Stock Prices (SA) 140–145
Expectations for the Economy (IE) 485 Exxon Stock (YDI) 802
Forecasting Unemployment (4M) 784–787; (AE) 793–794 Familiar Stock (YDI) 78
Gross Domestic Product (IE) 394–395 FICO Score (YDI) 105
Housing and Stocks (YDI) 135 Financial Ratios (4M) 78
Macro Economics (YDI) 137–138 Fraud Detection (4M) 201; (AE) 473–474
Organization for Economic Cooperation and Development (TAI) General Motors Stock Return (TAI) 294
133; (YDI) 526, 593, 627; (IE) 394 Hedge Funds (YDI) 296
Seasonally Adjusted Civilian Unemployment Rate (YDI) 802 High-Frequency Data (4M) 595
U.S. Gross National Product (TAI) 799 Historical Monthly Gross Returns of Stocks and Treasury Bills
(SA) 304–305
Education Holdings of U.S. Treasury Bonds (TAI) 44
Household Credit Market Debt (TAI) 799–800
Annual Tuition of Undergraduate Business Schools (TAI) 76–77 Household Incomes (TAI) 74, 75; (4M) 297
College Attended by CEOs (TAI) 46 IBM Stock (IE) 206, 208–209, 225–227, 230–231, 233–234,
College Graduate Debt (TAI) 198 236–238; (AE) 411–412; (AD) 217, 244–245
Education and Income (CO) 179 Investing in Stock (YDI) 219
High/Scope Perry Preschool Project (YDI) 389 Investment Risk (SA) 298
Letter Grades (IE) 39 IRA (TAI) 23
Multiple Choice Quiz (YDI) 176 Loan Status (TAI) 102
Public College Tuition (WT) 65 McDonalds Stock (IE) 214
SAT and Normality (4M) 277–279; (AE) 288 Microsoft Stock (IE) 225–227, 230–231, 233–234, 237, 239; (AD)
SAT Scores (TAI) 294 244–245
Test Scores (IE) 66 Monthly Prices of Shares in JCPenny (YDI) 802–803
Normality of Stock Returns (4M) 296–297
Energy Pfizer Stock (QT) 146–147
Quality Control of Finance Data (4M) 360–361
Annual Use of Natural Gas per Household (CO) 109; (WT) 120;
Real Money (4M) 249
(IE) 120–121
Sony Stock (IE) 668–678; (TAI) 697
Daylight Savings Time and Reducing Energy Consumption (TAI)
Startup Technology Companies (YDI) 268
449
Stock Exchanges (CO) 224
Electricity Supplied to Residences (TAI) 294
Stock Market (IE) 66, 271–272, 275, 303; (4M) 138; (TAI) 591
Energy Policy Act (TAI) 76
Stock Returns (SA) 142–145
Heating Degree Days (IE) 110–117, 121–122
Student Budget (YDI) 247
Lighting Efficiency (TAI) 44
Student Loan Debt (TAI) 198
Natural Gas and Electricity Use (YDI) 248
Tech Stocks (YDI) 78
Steel Mill Monitoring Energy Costs (TAI) 697
Value at Risk (4M) 281–282; (AE) 289; (YDI) 295–296; (SA) 145
U.S. Department of Energy (IE) 18, 130
Whole Stock Market and S&P 500 (TAI) 696
Environment
Food/Drink
Arctic Ice (YDI) 802
Artificial Sweetener (YDI) 47–48, 763
Carbon Dioxide Emissions (YDI) 138–139
Bread Volume (YDI) 764–765
Hurricane Bond (YDI) 296
Chocolate Snacks (YDI) 48–49
Hurricane Katrina (IE) 4, 5, 6–7
Fast Food Restaurant Customers (YDI) 247
January Average Temperatures (CO) 109
Food and Drug Administration Vetoing Name Choices
Polluting a Local River System (TAI) 415
(YDI) 268
Temperature (IE) 13
Frozen Food Package Weight (IE) 347–348
Weather at a Beachside Vacation Resort (TAI) 174
Gourmet Steaks (TAI) 295
Weather Forecasts (4M) 628–629; (YDI) 664, 700
Low-Calorie Sports Drink (YDI) 417

xxiv INDEX OF APPLICATIONS
M&Ms (IE) 58; (AE) 69; (TAI) 74; (YDI) 175; (SA) 306–309; Insurance Salesman (YDI) 221
(4M) 55–56 Life Insurance Benefits (IE) 122–123
Package Weights of M&Ms (SA) 310–311; (QT) 312 Selling Life and Auto Insurance (YDI) 247
Take-Out Food at a Local Pizzeria (YDI) 388 Stock Market Insurance (CO) 270
Taste Test (TAI) 267, 331; (IE) 437
Weights of Cereal Boxes (IE) 280 Labor
Wine (YDI) 449, 553, 733
Absent Employees (YDI) 199
Assembly Line Workers Missing Work (YDI) 102
Games
Civilian Unemployment Rate (IE) 17
Arcade Game (TAI) 219 Days Employees Were Out Sick (WT) 56
Dice Game (SA) 298–304; (QT) 305 Predicting Employment (IE) 4–7
Fair Coin (TAI) 415; (WT) 253 Tornado insurance (WT) 253
Fair Game (TAI) 219 Worker Productivity (TAI) 523
Game Consoles (YDI) 49 Workforce by Gender (YDI) 199
Lotteries (TAI) 219
Lucky Ducks Carnival Game (WT) 208 Law
Online Poker (YDI) 247
Slot Machine (QT) 305 Jury Trial (TAI) 415–416
Video Game Previewed by Teenagers (TAI) 24 Law Firm (YDI) 219–220
Law Suit against Wal-Mart (CO) 703–704; (4M) 451–452
Government
Management
Political Candidate Anxious about the Outcome of an Election
(TAI) 386 Analyzing the Performance of a Fast-Food Chain (TAI) 658
Political Poll (4M) 379–380 Average Amount of a Purchase Order (WT) 371
Property Taxes (4M) 378–379; (AE) 381–382 Business Offering Free Fitness Center Membership to Staff
Sales Tax (TAI) 75, 133 (TAI) 448
Tax Audits (4M) 333 Employee Confidence in Senior Management (YDI) 389
Top Government Research Priority (YDI) 47 Management of a Chain of Hotels (YDI) 417
Travel Expenses for Staff (WT) 637 Management Presentation (WT) 33
Management Tracking Growth of Sales versus Number of Outlets
(TAI) 625
Human Resource Management/Personnel
Manager Predicting Sales (TAI) 799
Average Age of MBAs Hired (TAI) 386 Managers with an MBA (YDI) 198
Businesses Planning to Hire Additional Employees Managing a Process (4M) 167–168; (IE) 167–168
(TAI) 386 Project Management (4M) 222–223
Calls Handled at a Corporate Call Center (BP) 68 Sales Force Comparison (4M) 438–440; (TAI) 449
Correlation between Employee Absent from Year to Year (TAI) Supervising Experimental Projects (TAI) 267
133 Supervisors Tracking the Output of a Plant (TAI) 625
Dexterity Testing and Hiring People for a Factory Assembly Line
(YDI) 449 Manufacturing
Direct Sales Team (YDI) 199
Discrimination in Hiring (4M) 107 Appliance Assembly (YDI) 199
Employee Experience 175 Assembly Line (YDI) 175
Employee Testing (YDI) 135 Canadian Paper Manufacturer (TAI) 23
Employees Interested in Joining a Union (TAI) 697 Car Manufacturer (TAI) 23–24, 332
Employment in Four Industries (YDI) 105 Making M&Ms (4M) 55–56
Evaluating the Performance of New Hires (TAI) 658, 664 Printer Manufacturing (YDI) 220–221
Headhunters (YDI) 418 Tire Manufacturer (YDI) 296
Hiring (YDI) 526, 593–594, 627, 664, 700–701, 733
Hiring Engineering Graduates Who Speak a Foreign Language Marketing
(TAI) 173 Age, Income and Product Rating (TAI) 658–659, 697; (IE)
Home-Based Operator (YDI) 176 681–682
Outsourcing High-Level White Collar Jobs (YDI) 49 Analysis of Car Buyers (YDI) 418
Personality Test (TAI) 416 Coupons expiring 765
Predicting Success of Candidates (TAI) 658 Coupons Increasing Sales (TAI) 103
Reasons for Missing Work (TAI) 102 Launching a Product (IE) 214
Reducing Turnover Rates (4M) 419; (YDI) 450 Locating a New Store (4M) 125–126; (AE) 128
Sex Discrimination in the Workplace (4M) 451–452 Loyalty Programs (YDI) 417
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efficient must always, under any conceivable system of government,
be taken by the executive. It was certainly taken by the executive in
England thirty years ago; and that much in opposition to the will of
Parliament. The prominence of our President in administrative
reform furnishes no sufficient ground for attributing a singularity of
executive influence to the government of this country.
In estimating the actual powers of the President it is no doubt
best to begin, as almost all writers in England and America now
habitually begin, with a comparison between the executives of the
two kindred countries. Whilst Mr. Bagehot has done more than any
other thinker to clear up the facts of English constitutional practice,
he has also, there is reason to believe, done something toward
obscuring those facts. Everybody, for instance, has accepted as
wholly true his description of the ministry of the Crown as merely an
executive committee of the House of Commons; and yet that
description is only partially true. An English cabinet represents, not
the Commons only, but also the Crown. Indeed, it is itself ‘the
Crown.’ All executive prerogatives are prerogatives which it is within
the discretion of the cabinet itself to make free use of. The fact that it
is generally the disposition of ministers to defer to the opinion of
Parliament in the use of the prerogative, does not make that use the
less a privilege strictly beyond the sphere of direct parliamentary
control, to be exercised independently of its sanction, even secretly
on occasion, when ministers see their way clear to serving the state
thereby. “The ministry of the day,” says a perspicacious expounder of
E
the English system, “appears in Parliament, on the one hand, as
personating the Crown in the legitimate exercise of its recognized
prerogatives; and on the other hand, as the mere agent of
Parliament itself, in the discharge of the executive and administrative
functions of government cast upon them by law.” Within the province
of the prerogative “lie the stirring topics of foreign negotiations, the
management of the army and navy, public finance, and, in some
important respects, colonial administration.” Very recent English
history furnishes abundant and striking evidence of the vitality of the
prerogative in these fields in the hands of the gentlemen who
“personate the Crown” in Parliament. “No subject has been more
eagerly discussed of late,” declares Mr. Amos (page 187), “than that
of the province of Parliament in respect of the making of treaties and
the declaration of war. No prerogative of the Crown is more
undisputed than that of taking the initiative in all negotiations with
foreign governments, conducting them throughout, and finally
completing them by the signature and ratification of a treaty.... It is a
bare fact that during the progress of the British diplomatic
movements which terminated in the Treaty of Berlin of 1878, or more
properly in the Afghan war of that year,”—including the secret treaty
by which Turkey ceded Cyprus to England, and England assumed
the protectorate of Asia Minor,—“Parliament never had an
opportunity of expressing its mind on any one of the important and
complicated engagements to which the country was being
committed, or upon the policy of the war upon the northwest frontier
of India. The subjects were, indeed, over and over again discussed
in Parliament, but always subsequent to irreparable action having
been taken by the government” (page 188). Had Mr. Amos lived to
take his narrative of constitutional affairs beyond 1880, he would
have had equally significant instances of ministerial initiative to
adduce in the cases of Egypt and Burmah.
E
Mr. Sheldon Amos: Fifty Years of the English
Constitution, page 338.
The unfortunate campaign in the Soudan was the direct outcome

of the purchase of the Suez Canal shares by the British government
in 1875. The result of that purchase was that “England became
pledged in a wholly new and peculiar way to the support of the
existing Turkish and Egyptian dominion in Egypt; that large English
political interests were rendered subservient to the decisions of local
tribunals in a foreign country; and that English diplomatic and
political action in Egypt, and indeed in Europe, was trammelled, or at
least indirectly influenced, by a narrow commercial interest which
could not but weigh, however slightly, upon the apparent purity and
simplicity of the motives of the English government.” And yet the
binding engagements which involved all this were entered into
“despite the absence of all assistance from, or consent of,
F
Parliament.” Such exercises of the prerogatives of the Crown
receive additional weight from “the almost recognized right of
evolving an army of almost any size from the Indian seed-plot, of
using reserve forces without communication to Parliament in
advance, and of obtaining large votes of credit for prospective
military operations of an indefinite character, the nature of which
Parliament is allowed only dimly to surmise” (page 392). The latest
evidence of the “almost recognized” character of such rights was the
war preparations made by England against Russia in 1885. If to such
powers of committing the country irrevocably to far-reaching foreign
policies, of inviting or precipitating war, and of using Indian troops
without embarrassment from the trammels of the Mutiny Act, there
be added the great discretionary functions involved in the
administration of colonial affairs, some measure may be obtained of
the power wielded by ministers, not as the mere agents of
Parliament, but as personating the Crown. Such is in England the
independence of action possible to the executive.
F
Amos, page 384.
As compared with this, the power of the President is

insignificant. Of course, as everybody says, he is more powerful than
the sovereign of Great Britain. If relative personal power were the
principle of etiquette, Mr. Cleveland would certainly not have to lift
his hat to the Queen, because the Queen is not the English
executive. The prerogatives of the Crown are still much greater than
the prerogatives of the presidency; they are exercised, however, not
by the wearer of the crown, but by the ministry of the Crown.
As Sir Henry Maine rightly says, the framers of our Constitution,
consciously or unconsciously, made the President’s office like the
King’s office under the English constitution of their time,—the
constitution, namely, of George III., who chose his advisers with or
without the assent of Parliament. They took care, however, to pare
down the model where it seemed out of measure with the exercise of
the people’s liberty. They allowed the President to choose his
ministers freely, as George then seemed to have established his
right to do; but they made the confirmation of the Senate a
necessary condition to his appointments. They vested in him the
right of negotiating treaties with foreign governments; but he was not
to sign and ratify treaties until he had obtained the sanction of the
Senate. That oversight of executive action which Parliament had not
yet had the spirit or the inclination to exert, and which it had forfeited
its independence by not exerting, was forever secured to our federal
upper chamber by the fundamental law. The conditions of mutual
confidence and co-operation between executive and legislature now
existing in England had not then been developed, and consequently
could not be reproduced in this country. The posture and disposition
of mutual wariness which were found existing there were made
constitutional here by express written provision. In short, the
transitional relations of the Crown and Parliament of that day were
crystallized in our Constitution, such guarantees of executive good
faith and legislative participation in the weightier determinations of
government as were lacking in the model being sedulously added in
the copy.
The really subordinate position of the presidency is hidden from
view partly by that dignity which is imparted to the office by its
conspicuous place at the front of a great government, and its
security and definiteness of tenure; partly by the independence
apparently secured to it by its erection into an entirely distinct and
separate ‘branch’ of the government; and partly by those
circumstances of our history which have thrust our Presidents
forward, during one or two notable periods, as real originators of
policy and leaders in affairs. The President has never been powerful,
however, except at such times as he has had Congress at his back.
While the new government was a-making—and principally because it
was a-making—Washington and his secretaries were looked to by
Congress for guidance; and during the presidencies of several of
Washington’s immediate successors the continued prominence of
questions of foreign policy and of financial management kept the
officers of the government in a position of semi-leadership. Jackson
was masterful with or without right. He entered upon his presidency
as he entered upon his campaign in Florida, without asking too
curiously for constitutional warrant for what he was to undertake. In
the settlement of the southern question Congress went for a time on
all-fours with the President. He was powerful because Congress was
acquiescent.
But such cases prove rather the usefulness than the strength of
the presidency. Congress has, at several very grave crises in
national affairs, been seasonably supplied with an energetic leader
or agent in the person of the President. At other times, when
Congress was in earnest in pushing views not shared by the
President, our executives have either been overwhelmed, as
Johnson was, or have had to decline upon much humbler services.
Their negotiations with foreign governments are as likely to be
disapproved as approved; their budgets are cut down like a younger
son’s portion; their appointments are censured and their
administrations criticised without chance for a counter-hearing. They
create nothing. Their veto is neither revisory nor corrective. It is
merely obstructive. It is, as I have said, a simple blunt negation,
oftentimes necessarily spoken without discrimination against a good
bill because of a single bad clause in it. In such a contest between
origination and negation origination must always win, or government
must stand still.
In England the veto of the Crown has not passed out of use, as
is commonly said. It has simply changed its form. It does not exist as
an imperative, obstructive ‘No,’ uttered by the sovereign. It has
passed over into the privilege of the ministers to throw their party
weight, reinforced by their power to dissolve Parliament, against
measures of which they disapprove. It is a much-tempered
instrument, but for that reason all the more flexible and useful. The
old, blunt, antagonistic veto is no longer needed. It is needed here,
however, to preserve the presidency from the insignificance of
merely administrative functions. Since executive and legislature
cannot come into relations of mutual confidence and co-operation,
the former must be put in a position to maintain a creditable
competition for consideration and dignity.
A clear-headed, methodical, unimaginative President like Mr.
Cleveland unaffectedly recognizes the fact that all creating,
originating power rests with Congress, and that he can do no more
than direct the details of such projects as he finds commended by its
legislation. The suggestions of his message he acknowledges to be
merely suggestions, which must depend upon public opinion for their
weight. If Congress does not regard them, it must reckon with the
people, not with him. It is his duty to tell Congress what he thinks
concerning the pending questions of the day; it is not his duty to
assume any responsibility for the effect produced on Congressmen.
The English have transformed their Crown into a Ministry, and in
doing so have recognized both the supremacy of Parliament and the
rôle of leadership in legislation properly belonging to a responsible
executive. The result has been that they have kept a strong
executive without abating either the power or the independence of
the representative chamber in respect of its legislative function. We,
on the contrary, have left our executive separate, as the Constitution
made it; chiefly, it is to be suspected, because the explicit and
confident gifts of function contained in that positive instrument have
blinded us by their very positiveness to the real subordination of the
executive resulting from such a separation. We have supposed that
our President was great because his powers were specific, and that
our Congress was not supreme because it could not lay its hands
directly upon his office and turn him out. In fact, neither the dignity
and power of the executive nor the importance of Congress is served
by the arrangement. Being held off from authoritative suggestion in
legislation, the President becomes, under ordinary circumstances,
merely a ministerial officer; whilst Congress, on its part, deprived of
such leadership, becomes a legislative mass meeting instead of a
responsible co-operating member of a well-organized government.
Being under the spell of the Constitution, we have been unable to
see the facts which written documents can neither establish nor
change.
Singularly enough, there is sharp opposition to the introduction
into Congress of any such leadership on the part of the executive as
the Ministers of the Crown enjoy in Parliament, on the ground of the
increase of power which would accrue as a result to the legislature. It
is said that such a change would, by centring party and personal
responsibility in Congress, give too great a prominence to legislation;
would make Congress the object of too excited an interest on the
part of the people. Legislation in Parliament, instead of being
piecemeal, tessellated work, such as is made up in Congress of the
various fragments contributed by the standing committees, is, under
each ministry, a continuous, consistent, coherent whole; and, instead
of bearing the sanction of both national parties, is the peculiar policy
of only one of them. It is thought that, if such coherence of plan,
definiteness and continuity of aim, and sanction of party were to be
given the work of Congress, the resulting concentration of popular
interest and opinion would carry Congress over all the barriers of the
Constitution to an undisputed throne of illimitable power. In short, the
potential supremacy of Congress is thought to be kept within
bounds, not by the constitutional power of the executive and the
judiciary, its co-ordinate branches, but by the intrinsic dulness and
confusion of its own proceedings. It cannot make itself interesting
enough to be great.
But this is a two-edged argument, which one must needs handle
with great caution. It is evidently calculated to destroy every
argument constructed on the assumption that it is written laws which
are effective to the salvation of our constitutional arrangements; for it
is itself constructed on the opposite assumption, that it is the state of
popular interest in the nation which balances the forces of the
government. It would, too, serve with equal efficacy against any
scheme whatever for reforming the present methods of legislation in
Congress, with which almost everybody is dissatisfied. Any reform
which should tend to give to national legislation that uniform, open,
intelligent, and responsible character which it now lacks, would also
create that popular interest in the proceedings of Congress which, it
is said, would unhinge the Constitution. Democracy is so delicate a
form of government that it must break down if given too great facility
or efficacy of operation. No one body of men must be suffered to
utter the voice of the people, lest that voice become, through it,
directly supreme.
The fact of the overtopping power of Congress, however,
remains. The houses create all governmental policy, with that wide
latitude of ‘political discretion’ in the choice of means which the
Supreme Court unstintingly accords them. Congress has often come
into conflict with the Supreme Court by attempting to extend the
province of the federal government as against the States; but it has
seldom, I believe, been brought effectually to book for any alleged
exercise of powers as against its directly competing branch, the
executive. Having by constitutional grant the last word as to foreign
relations, the control of the finances, and even the oversight of
executive appointments, Congress exercises what powers of
direction and management it pleases, as fulfilling, not as straining,
the Constitution. Government lives in the origination, not in the
defeat, of measures of government. The President obstructs by
means of his ‘No;’ the houses govern by means of their ‘Yes.’ He has
killed some policies that are dead; they have given birth to all
policies that are alive.
But the measures born in Congress have no common lineage.
They have not even a traceable kinship. They are fathered by a
score or two of unrelated standing committees: and Congress stands
godfather to them all, without discrimination. Congress, in effect,
parcels out its great powers amongst groups of its members, and so
confuses its plans and obscures all responsibility. It is a leading
complaint of Sir Henry Maine’s against the system in England, which
is just under his nose, that it confers the preliminary shaping and the
initiation of all legislation upon the cabinet, a body which deliberates
and resolves in strict secrecy,—and so reminds him, remotely
enough, of the Spartan Ephors and the Venetian Council of Ten. He
commends, by contrast, that constitution (our own, which he sees at
a great distance) which reserves to the legislature itself the
origination and drafting of its measures. It is hard for us, who have
this commended constitution under our noses, to perceive wherein
we have the advantage. British legislation is for the most part
originated and shaped by a single committee, acting in secret,
whose proposals, when produced, are eagerly debated and freely
judged by the sovereign legislative body. Our legislation is framed
and initiated by a great many committees, deliberating in secret,
whose proposals are seldom debated and only perfunctorily judged
by the sovereign legislative body. It is impossible to mistake the
position and privileges of the Brutish cabinet, so great and
conspicuous and much discussed are they. They simplify the whole
British system for men’s comprehension by merely standing at the
centre of it. But our own system is simple only in appearance. It is
easy to see that our legislature and executive are separate, and that
the legislature matures its own measures by means of committees of
its own members. But it may readily escape superficial observation
that our legislature, instead of being served, is ruled by its
committees; that those committees prepare their measures in
private; that their number renders their privacy a secure secrecy, by
making them too many to be watched, and individually too
insignificant to be worth watching; that their division of prerogatives
results in a loss, through diffusion, of all actual responsibility; and
that their co-ordination leads to such a competition among them for
the attention of their respective houses that legislation is rushed,
when it is not paralyzed.
It is thus that, whilst all real power is in the hands of Congress,
that power is often thrown out of gear and its exercise brought
almost to a standstill. The competition of the committees is the clog.
Their reports stand in the way of each other, and so the complaint is
warranted that Congress can get nothing done. Interests which press
for attention in the nation are reported upon by the appropriate
committee, perhaps, but the report gets pushed to the wall. Or they
are not reported upon. They are brought to the notice of Congress,
but they go to a committee which is unfavorable. The progress of
legislation depends both upon the fortunes of competing reports and
upon the opinions held by particular committees.
The same system of committee government prevails in our state
legislatures, and has led to some notable results, which have
recently been pointed out in a pamphlet entitled American
Constitutions, contributed to the Johns Hopkins series of Studies in
History and Political Science by Mr. Horace Davis. In the state
legislatures, as in Congress, the origination and control of legislation
by standing committees has led to haphazard, incoherent,
irresponsible law-making, and to a universal difficulty about getting
anything done. The result has been that state legislatures have been
falling into disrepute in all quarters. They are despised and
mistrusted, and many States have revised their constitutions in order
to curtail legislative powers and limit the number and length of
legislative sessions. There is in some States an apparent inclination
to allow legislators barely time enough to provide moneys for the
maintenance of the governments. In some instances necessary
powers have been transferred from the legislatures to the courts; in
others to the governors. The intent of all such changes is manifest. It
is thought safer to entrust power to a law court, performing definite
functions under clear laws and in accordance with strict judicial
standards, or to a single conspicuous magistrate, who can be
watched and cannot escape responsibility for his official acts, than to
entrust it to a numerous body which burrows toward its ends in
committee-rooms, getting its light through lobbies; and which has a
thousand devices for juggling away responsibility, as well as scores
of antagonisms wherewith to paralyze itself.
Like fear and distrust have often been felt and expressed of late
years concerning Congress, for like reasons. But so far no attempt
has been made to restrict either the powers or the time of Congress.
Amendments to the Constitution are difficult almost to the point of
impossibility, and the few definite schemes nowadays put forward for
a revision of the Constitution involve extensions rather than
limitations of the powers of Congress. The fact is that, though often
quite as exasperating to sober public opinion as any state
legislature, Congress is neither so much distrusted nor so deserving
of distrust. Its high place and vast sphere in the government of the
nation cause its members to be more carefully chosen, and its
proceedings to be more closely watched, and frequently controlled
by criticism. The whole country has its eyes on Congress, and
Congress is aware of the fact. It has both the will and the incentive to
be judicious and patriotic. Newspaper editors have constantly to be
saying to their readers, ‘Look what our state legislators are doing;’
they seldom have to urge, ‘Look what Congress is doing.’ It cannot,
indeed, be watched easily, or to much advantage. It requires a
distinct effort to watch it. It has no dramatic contests of party leaders
to attract notice. Its methods are so much after the fashion of the
game of hide-and-seek that the eye of the ordinary man is quite
baffled in trying to understand or follow them, if he try only at leisure
moments. But, at the same time, the interests handled by Congress
are so vast that at least the newspapers and the business men, if no
others, must watch its legislation as best they may. However hard it
may be to observe, it is too influential in great affairs to make it safe
for the country to give over trying to observe it.
But though Congress may always be watched, and so in a
measure controlled, despite its clandestine and confusing methods,
those methods must tend to increase the distrust with which
Congress is widely regarded; and distrust cannot but enervate,
belittle, and corrupt this will-centre of the Constitution. The question
is not merely, How shall the methods of Congress be clarified and its
ways made purposeful and responsible? There is this greater
question at stake: How shall the essential arrangements of the
Constitution be preserved? Congress is the purposing, designing,
aggressive power of the national government. Disturbing and
demoralizing influences in the organism, if there be any, come out
from its restless energies. Damaging encroachments upon ground
forbidden to the federal government generally originate in measures
of its planning. So long as it continues to be governed by unrelated
standing committees, and to take its resolves in accordance with no
clear plan, no single, definite purpose, so long as what it does
continues to be neither evident nor interesting, so long must all its
exertions of power be invidious; so long must its competition with the
executive or the judiciary seem merely jealous and always
underhand: so long must it remain virtually impossible to control it
through public opinion. As well ask the stranger in the gallery of the
New York Stock Exchange to judge of the proceedings on the floor.
As well ask a man who has not time to read all the newspapers in
the Union to judge of passing sentiment in all parts of the country.
Congress in its composition is the country in miniature. It realizes
Hobbes’s definition of liberty as political power divided into small
fragments. The standing committees typify the individuals of the
nation. Congress is better fitted for counsel than the voters simply
because its members are less than four hundred instead of more
than ten millions.
It has been impossible to carry out the programme of the
Constitution; and, without careful reform, the national legislature will
even more dangerously approach the perilous model of a mass
meeting. There are several ways in which Congress can be so
integrated as to impart to its proceedings system and party
responsibility. That may be done by entrusting the preparation and
initiation of legislation to a single committee in each house,
composed of the leading men of the majority in that house. Such a
change would not necessarily affect the present precedents as to the
relations between the executive and the legislature. They might still
stand stiffly apart. Congress would be integrated and invigorated,
however, though the whole system of the government would not be.
To integrate that, some common meeting-ground of public
consultation must be provided for the executive and the houses.
That can be accomplished only by the admission to Congress, in
whatever capacity,—whether simply to answer proper questions and
to engage in debate, or with the full privileges of membership,—of
official representatives of the executive who understand the
administration and are interested and able to defend it. Let the
tenure of ministers have what disconnection from legislative
responsibility may seem necessary to the preservation of the
equality of House and Senate, and the separation of administration
from legislation; light would at least be thrown upon administration; it
would be given the same advantages of public suggestion and
unhampered self-defence that Congress, its competitor, has; and
Congress would be constrained to apply system and party
responsibility to its proceedings.
The establishment in the United States of what is known as
‘ministerial responsibility’ would unquestionably involve some
important changes in our constitutional system. I am strongly of the
opinion that such changes would not be too great a price to pay for
the advantages secured us by such a government. Ministerial
responsibility supplies the only conditions which have yet proved
efficacious, in the political experience of the world, for vesting
recognized leadership in men chosen for their abilities by a natural
selection of debate in a sovereign assembly of whose contests the
whole country is witness. Such survival of the ablest in debate
seems the only process available for selecting leaders under a
popular government. The mere fact that such a contest proceeds
with such a result is the strongest possible incentive to men of first-
rate powers to enter legislative service; and popular governments,
more than any other governments, need leaders so placed that, by
direct contact with both the legislative and the executive departments
of the government, they shall see the problems of government at first
hand; and so trained that they shall at the same time be, not mere
administrators, but also men of tact and eloquence, fitted to
persuade masses of men and to draw about themselves a loyal
following.
If we borrowed ministerial responsibility from England, we
should, too, unquestionably enjoy an infinite advantage over the
English in the use of it. We should sacrifice by its adoption none of
that great benefit and security which our federal system derives from
a clear enumeration of powers and an inflexible difficulty of
amendment. If anything would be definite under cabinet government,
responsibility would be definite; and, unless I am totally mistaken in
my estimate of the legal conscience of the people of this country,—
which seems to me to be the heart of our whole system,—definite
responsibility will establish rather than shake those arrangements of
our Constitution which are really our own, and to which our national
pride properly attaches, namely, the distinct division of powers
between the state and federal governments, the slow and solemn
formalities of constitutional change, and the interpretative functions
of the federal courts. If we are really attached to these principles, the
concentration of responsibility in government will doubly insure their
preservation. If we are not, they are in danger of destruction in any
case.
But we cannot have ministerial responsibility in its fulness under
the Constitution as it stands. The most that we can have is distinct
legislative responsibility, with or without any connection of co-
operation or of mutual confidence between the executive and
Congress. To have so much would be an immense gain. Changes
made to this end would leave the federal system still an unwieldy
mechanism of counteracting forces, still without unity or flexibility; but
we should at least have made the very great advance of fastening
upon Congress an even more positive form of accountability than
now rests upon the President and the courts. Questions of vast
importance and infinite delicacy have constantly to be dealt with by
Congress; and there is an evident tendency to widen the range of
those questions. The grave social and economic problems now
thrusting themselves forward, as the result of the tremendous growth
and concentration of our population, and the consequent sharp
competition for the means of livelihood, indicate that our system is
already aging, and that any clumsiness, looseness, or irresponsibility
in governmental action must prove a source of grave and increasing
peril. There are already commercial heats and political distempers in
our body politic which warn of an early necessity for carefully
prescribed physic. Under such circumstances, some measure of
legislative reform is clearly indispensable. We cannot afford to put up
any longer with such legislation as we may happen upon. We must
look and plan ahead. We must have legislation which has been
definitely forecast in party programmes and explicitly sanctioned by
the public voice. Instead of the present arrangements for
compromise, piecemeal legislation, we must have coherent plans
from recognized party leaders, and means for holding those leaders
to a faithful execution of their plans in clear-cut Acts of Congress.
LIST OF VOLUMES OF ESSAYS ON LITERATURE,
ART, MUSIC, ETC., PUBLISHED BY CHARLES SCRIBNER’S
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HENRY ADAMS.
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“Prof. Boyesen is cultivated without being pedantic, and serious without
being dull. The literature he analyzes and expounds is the literature that has
international value.”—Boston Beacon.
W. C. BROWNELL.
French Traits. (12mo, $1.50.)
Contents: The Social Instinct—Morality—Intelligence—Sense
and Sentiment—Manners—Women—The Art Instinct—The
Provincial Spirit—Democracy—New York after Paris.
“These chapters form a volume of criticism which is sympathetic, intelligent,
acute, and contains a great amount of wholesome suggestion.”—Boston
Advertiser.
French Art. (12mo, $1.25.)
“Brought to the judgment in this cool and scientific spirit, the whole course
of French painting and sculpture, as shown by the masters pre-eminent in each
era, is reviewed by a critic as certain of his criticisms as he is capable in
forming them.”—Springfield Republican.
THOMAS CARLYLE.
Lectures on the History of Literature. (Now printed for the
first time. 12mo, $1.00.)
Summary of Contents: Literature in General—Language,
Tradition—The Greeks—The Heroic Ages—Homer—Æschylus to
Socrates—The Romans—Middle Ages—Christianity—The Crusades
—Dante—The Spaniards—Chivalry—Cervantes—The Germans—
Luther—The Origin, Work and Destiny of the English—Shakespeare
—Milton—Swift—Hume—Wertherism—The French Revolution—
Goethe and his Works.
“Every intelligent American reader will instantly wish to read this book
through, and many will say that it is the clearest and wisest and most genuine
book that Carlyle ever produced. We could have no work from his hand which
embodies more clearly and emphatically his literary opinions than his rapid and
graphic survey of the great writers and great literary epochs of the world.”—
Boston Herald.
ALICE MORSE EARLE.

The Sabbath in Puritan New England. (12mo, $1.25.)
“She writes with a keen sense of humor, and out of the full stores of
adequate knowledge and plentiful explorations among old pamphlets, letters,
sermons, and that treasury, not yet run dry in New England, family traditions.
The book is as sympathetic as it is bright and humorous.”—The Independent.
China Collecting in America. (with 75 illustrations. Sq. 8vo,
$3.00.)
“Her book is full of entertainment, not only for the china hunter and
collector, but for all who are interested in early times and manufactures, in the
old houses and country people, in the history of America, and the habits and
customs of the past.”—New York Observer.
Customs and Fashions in Old New England. (12mo, $1.25.)
Mrs. Earle describes the daily life and habits, the festivals, larder,
taverns, modes of travel, peculiarities of courtship, marriages,
funerals, the utensils and furniture of the Puritan farm and home,
with the same wit, sympathetic feeling, and copious information so
marked in her former works.
HENRY T. FINCK.
Chopin, and Other Musical Essays. (12mo, $1.50.)
“Written from abundant knowledge: enlivened by anecdote and touches of
enthusiasm, suggestive, stimulating.”—Boston Post.
JAMES ANTHONY FROUDE.

The Spanish Story of the Armada, and Other Essays.
(12mo, $1.50.)
Contents: The Spanish Story of the Armada—Antonio Perez:
An Unsolved Historical Riddle—Saint Teresa—The Templars—The
Norway Fjords—Norway Once More.
Short Studies on Great Subjects. (Half leather, 12mo, 4
vols., each $1.50.)
CONTENTS:
Vol. I. The Science of History—Times of Erasmus and Luther—The Influence
of the Reformation on the Scottish Character—The Philosophy of Catholicism—A
Plea for the Free Discussion of Theological Difficulties—Criticism and the Gospel
History—The Book of Job—Spinoza—The Dissolution of Monasteries—England’s
Forgotten Worthies—Homer—The Lives of the Saints—Representative Man—
Reynard the Fox—The Cat’s Pilgrimage—Fables—Parable of the Bread-fruit Tree
—Compensation.
Vol. II. Calvinism—A Bishop of the Twelfth Century—Father Newman on “The
Grammar of Assent”—Conditions and Prospects of Protestantism—England and
Her Colonies—A Fortnight in Kerry—Reciprocal Duties in State and Subject—The
Merchant and His Wife—On Progress—The Colonies Once More—Education—
England’s War—The Eastern Question—Scientific Method Applied to History.
Vol. III. Annals of an English Abbey—Revival of Romanism—Sea Studies—
Society in Italy in the Last Days of the Roman Republic—Lucian—Divus Caesar—
On the Uses of a Landed Gentry—Party Politics—Leaves from a South African
Journal.
Vol. IV. The Oxford Counter—Reformation—Life and Times of Thomas Becket
—Origen and Celsus—A Cagliostro of the Second Century—Cheneys and the
House of Russell—A Siding at a Railway Station.
“All the papers here collected are marked by the qualities which have made
Mr. Froude the most popular of living English historians—by skill in
argumentative and rhetorical exposition, by felicities of diction, by contagious
earnestness, and by the rare power of fusing the results of research in the
imagination so as to produce a picture of the past at once exact and vivid.”—
N. Y. Sun.
WILLIAM EWART GLADSTONE.
Gleanings of Past Years, 1843–1879. (7 vols., 16mo, each
$1.00.)
Contents: Vol. I., The Throne and the Prince Consort. The
Cabinet and Constitution—Vol. II., Personal and Literary—Vol. III.,
Historical and Speculative—Vol. IV., Foreign—Vol. V. and VI.,
Ecclesiastical—Vol. VII., Miscellaneous.
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very wide range of intellectual effort. Perhaps their most striking feature is the
breadth of genuine intellectual sympathy, of which they afford such abundant
evidence.”—Nation.
ROBERT GRANT.
The Reflections of a Married Man. (12mo, cloth, $1.00;
paper, 50 cents.)
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objective form; and few experiences are more familiar than those which Mr.
Grant here chronicles for us. Altogether Mr. Grant has given us a capital little
book, which should easily strike up literary comradeship with ‘The Reveries of a
Bachelor.’”—Boston Transcript.
Opinions of a Philosopher. (Illustrated by Reinhart and
Smedley. 12mo, cloth, $1.00.)
A sequel to the author’s “Reflections,” relating the experiences
through middle life of Fred and Josephine, with equal charm and
humor.
E. J. HARDY.
The Business of Life: A Book for Everyone.—How To Be
Happy Though Married: Being a Handbook to Marriage—The Five
Talents of Woman: A Book for Girls and Women—Manners
Makyth Man—The Sunny Days of Youth: A Book for Boys and
Young Men. (12mo, each $1.25.)
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which he draws with a lavish hand, and he has the art of brightening his pages
with a constant play of humor that makes what he says uniformly
entertaining.”—Boston Advertiser.
W. E. HENLEY.
Views and Reviews. Essays in Appreciation: Literature. (12mo,
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Congreve—Tolstoï—Fielding, etc., etc.
“Interesting, original, keen and felicitous. His criticism will be found
suggestive, cultivated, independent.”—N. Y. Tribune.
J. G. HOLLAND.
Titcomb’s Letters to Young People, Single and Married—
Gold-Foil, Hammered from Popular Proverbs—Lessons in
Life: A Series of Familiar Essays—Concerning the Jones Family
—Plain Talks on Familiar Subjects—Every-Day Topics, First
Series, Second Series. (Small 12mo, each, $1.25.)
“Dr. Holland will always find a congenial audience in the homes of culture
and refinement. He does not affect the play of the darker and fiercer passions,
but delights in the sweet images that cluster around the domestic hearth. He
cherishes a strong fellow-feeling with the pure and tranquil life in the modest
social circles of the American people, and has thus won his way to the
companionship of many friendly hearts.”—N. Y. Tribune.
WILLIAM RALPH INGE.

Society in Rome under the Cæsars. (12mo, $1.25.)
“Every page is brimful of interest. The picture of life in Rome under the
Cæsars are graphic and thoroughly intelligible.”—Chicago Herald.
ANDREW LANG.
Essays in Little. (Portrait, 12mo, $1.00.)

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Statistics for Business: Decision

Making and Analysis 3rd Edition by

Get the Most Out of

Statistics for Business

Decision Making and Analysis

MyStatLab is available for this textbook.

11 Probability Models for Counts 251

12 The Normal Probability Model 270

CASE: STATISTICS IN ACTION Managing Financial Risk 298

CASE: STATISTICS IN ACTION Modeling Sampling Variation 306

PART III Inference

14 Sampling Variation and Quality 334

15 Confidence Intervals 362

16 Statistical Tests 391

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16.4 Significance versus Importance 408

18 Inference for Counts 453

CASE: STATISTICS IN ACTION Rare Events 484

CASE: STATISTICS IN ACTION Data Mining Using Chi-Squared 491

PART IV Regression Models

20 Curved Patterns 528

21 The Simple Regression Model 557

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22 Regression Diagnostics 596

23 Multiple Regression 630

24 Building Regression Models 667

25 Categorical Explanatory Variables 703

26 Analysis of Variance 736

27 Time Series 768

CASE: STATISTICS IN ACTION Analyzing Experiments 807

CASE: STATISTICS IN ACTION Automated Modeling 815

A01_STIN7167_03_SE_FM.indd 9 12/11/16 10:03 AM

Appendix: Tables 823

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if you are familiar with these methods, we encourage Case Studies

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Prakash Mirchandani, University of Pittsburgh Omeed Selbe, University of Southern California

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■■ Personalized Learning: MyStatLab’s personal-

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XLSTAT™ for Pearson

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Internet Browsers (YDI) 49 Finance and Investments

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The unfortunate campaign in the Soudan was the direct outcome

As compared with this, the power of the President is

SIR EDWIN ARNOLD.

ALICE MORSE EARLE.

JAMES ANTHONY FROUDE.

WILLIAM RALPH INGE.

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