Intr. a la Estadı́stica 2021-2022 Fac. Comercio, Turismo y CC.

Sociales Jovellanos 10 de enero de 2022

1. The price of a certain product has fluctuated a lot over the last four years: it increased by 30% from
(the beginning of) 2018 to 2019, decreased by 5% from 2019 to 2020, decreased again by 20% from
2020 to 2021 and increased by 20% from 2021 to 2022. The initial unit price was e20.

(a) (0.5 points.-) Calculate its final unit price (price at the beginning of 2022).
Solution.-Let p2022 be the final price and let Iij and ROCji be respectively the price relative and
the rate of change between years i and j. According to the information in the exercise statement,
we have the following:
• ROC2019
2018
2019
= 0.30, and thus I2018 = 1.30
• ROC2020
2019
2020
= −0.05, and thus I2019 = 0.95
• ROC2021
2020
2021
= −0.20, and thus I2020 = 0.80
• ROC2022
2021
2022
= 0.20, and thus I2021 = 1.20
2022
Therefore p2022 = p2018 · I2018 2019
=e20 · (I2018 2020
· I2019 2021
· I2020 2022
· I2021 ) = e20 · (1.30 · 0.95 · 0.80 · 1.20) =
e20 · 1.1856 ≈ e23.71.
2022
(b) (0.5 points.-) Calculate its price relative (simple index) I2018 .
2022 2019 2020 2021 2022
Solution.- I2018 = I2018 · I2019 · I2020 · I2021 = 1.1856 (as calculated above).
(c) (0.5 points.-) What was the compound annual (average) rate of variation of during this 4-year
period? p √
2022 − 1 = 4 1.1856 − 1 ≈ 0.0435.
Solution.- The compound annual rate of variation is i = 4 I2018
The (average) annual rate of variation was 4.35%. In words, the price increased by 4.35% per
year during that 4-year period.

2. Consider the following frequency tables reporting the annual income (in thousand e) in two samples
of 15 families each:
Sample 1: Sample 2:
xi ni (freq.) xi ni (freq.)
45 2 15 8
50 4 20 4
55 6 60 1
60 3 80 2

(a) (0.5 points.-) Complete the following tables:

Solution.- The tables are completed:

Sample 1: Pi
Pi Pi j=1 xj ·nj
xi (inc.) ni (freq.) xi · ni Ni = j=1 nj j=1 xj · nj Pi = Ni /n Qi = Pk
xj ·nj
j=1
45 2 90 2 90 0.133 0.1125
50 4 200 6 290 0.4 0.3625
55 6 330 12 620 0.8 0.7750
60 3 180 15 800 1 1
Sample 2: Pi
Pi Pi j=1 xj ·nj
xi (inc.) ni (freq.) xi · ni Ni = j=1 nj j=1 xj · nj Pi = Ni /n Qi = Pk
xj ·nj
j=1
15 8 120 8 120 0.5333 0.24
20 4 80 12 200 0.80 0.40
60 1 60 13 260 0.8667 0.52
120 2 240 15 500 1 1
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(b) (0.5 points.-) What percentage of the 15 families from Sample 1 receive e50,000 or less a year?
And what percentage of the total annual income do they receive? What percentage of the 15
families from Sample 2 receive e50,000 or less a year? And what percentage of the total annual
income do they receive?
Solution.- The respective answers are 40% and 36.25%, respectively for Sample 1, and 80% and
40% respectively for Sample 2.
(c) (0.5 points.-) Calculate the Gini inequality index of Sample 1. Is it higher or lower than the
index of Sample 2 (You do not need to explicitly calculate the Gini index in the second sample.)
Solution.- The Gini index associated to Sample 1 is:

(0.133 + 0.4 + 0.8) − (0.1125 + 0.3625 + 0.7750) 1.333 − 1.25

IG = = = 0.0623
0.133 + 0.4 + 0.8 1.333
In Sample 2, we observe at a glance that the level of inequality is higher. The differences between
the Pi (percentage of people earning xi or less) and the Qi (percentage of money of the total
amount accumulated by those people) are larger in this second sample than in the first. Thus, the
Gini index is higher in Sample 2 than in Sample 1.

3. The table below summarizes information gathered from a survey of 500 citizens in five southern Eu-
ropean countries about their level of English. The citizens are classified according to their nationality
(X) and their level of English (Y ). 100 young adults were selected in each of the five countries.

Y \X Portugal Spain France Italy Greece

Basic 10 25 40 33 20
Intermediate 40 50 35 45 50
Advanced 50 25 25 22 30

(a) (0.5 points.-) How many respondents have an advanced level in English? Among them, what
percentage are Spanish and what percentage are Portuguese?
Solution.- 50 + 25 + 25 + 22 + 30 = 152 of the respondents have an advanced level of English. Of
these, 50 are Portuguese and 25 are Spanish. Thus, of all those with an advanced level of English,
32.89% are Portuguese and approximately 16.45% are Spanish.
(b) (0.5 points.-) In the observed sample, are nationality and English level independent? Justify
your answer.
Solution.- They are not independent. If they were, among other things, the above two percent-
ages should correspond to the respective percentages of Portuguese and Spaniards in the sample.
However, in the sample there are 20% of people of each nationality. Generally speaking, in this
sample, the Portuguese have a higher level of English than respondents of other nationalities.

4. (0.5 points.-) A businessperson holds a portfolio of shares in three companies A, B and C. She
increases her holdings in them from time to time and keeps a record of the stock prices at the end of
each month. The following table records her holdings (number of shares) and stock share prices at the
end of 4 consecutive months:

Share price ($) Number held (thousands)

Co. Jan. Feb. March April Jan. Feb. March April
A 56.0 54.5 57.5 56.0 5.0 5.0 5.5 5.5
B 0.50 0.52 0.36 0.25 10.0 11.0 11.0 10.0
C 6.00 6.86 7.90 9.00 7.0 7.5 8.0 8.5

Calculate the Laspeyres index for April using January as the base month.
wi ·(Ii )April
P
Solution.- LApril
Jan =
i=A,B,C
P Jan
, where wi represents the total amount of money she had invested
i=A,B,C wi
in company i in January (i = A, B, C) Thus wA = 56 · 5 = 280, wB = 0.5 · 10 = 5 and wC = 6 · 7 = 42
(all of them in thousand dollars). On the other hand (IA )April April April
Jan = 1, (IB )Jan = 10.5 and (IC )Jan = 1.5.
Thus:
 3

280 · 1 + 5 · 0.5 + 42 · 1.5 345.5

LApril
Jan = = ≈ 1.0566
280 + 5 + 42 327

5. The CEO of the local Tourism Authority developed a study (before this pandemic situation) concerning
the relation between families annual income (X and their annual expenditure on recreation (Y ), both
measured in thousand e. This information was used to tailor marketing campaigns to certain
consumer segments.

mean std. dev. minimum Perc. 25 Perc. 50 Perc. 75 maximum sample size
X 33.46 10.18 16.00 28.0 31.0 35.0 73.40 289
Y ... 1.39 2.24 4.0 4.5 5.1 10.24 289

The regression line of (Y ) against (X) is y = 0.13x + 0.32 and the coefficient of determination is
R2 = 0.9413. Based on the above information:
(a) (0.5 points.-) Find her predicted expenditure on recreation by a family with an annual income
of e60,000 (based on the above regression model)?
Solution.- The predicted expenditure on recreation (in thousand euros) is:

ŷ(x = 60) = 0.13 · 60 + 0.32 = 8.12

(The predicted expenditure on recreation is e8120).

(b) (0.5 points.-) Comment on how confident we can be about the accuracy of his forecast.
Solution.- The determination coefficient R2 is very high (close to 1), the value x = 60 (from which
we have predicted the value of the expenditure on recreation) is between the minimum (33.46) and
maximum (73.40) of the sample incomes, and the sample size (n = 289) is quite large. Therefore,
our estimate is quite reliable.
(c) (0.5 points.-) What has been the average (arithmetic mean) expenditure on recreation per family
in the sample?
Solution.- We must calculate the arithmetic mean of Y in the sample, y. Having into account that
the regression line contains the point (x, y) and that x = 33.46 we have y = 0.13 · 33.46 + 0.32 =
4.6698. (The average expenditure on recreation was e4,669.80).

YOU MUST JUSTIFY YOUR ANSWERS TO OBTAIN FULL CREDIT.