Lind16e Preface

Lin20522_fm_i-xxx.
indd Page iii 20/11/13 3:45 PM user-f-w-198
/201/MH02018/Lin20522_disk1of1/0078020522/Lin20522_pagefiles
Statistical Techniques in
BUSINESS &
ECONOMICS
SIXTEENTH EDITION
DOUGLAS A. LIND
Coastal Carolina University and The University of Toledo
WILLIAM G. MARCHAL
The University of Toledo
SAMUEL A. WATHEN
Coastal Carolina University
Lin20522_fm_i-xxx.indd Page iv 20/11/13 3:45 PM user-f-w-198
STATISTICAL TECHNIQUES IN BUSINESS & ECONOMICS, SIXTEENTH EDITION

Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright 2015 by McGraw-Hill
Education. All rights reserved. Printed in the United States of America. Previous editions 2012, 2010, and 2008.
No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database
or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in
any network or other electronic storage or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside the
United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 0 DOW/DOW 1 0 9 8 7 6 5 4
ISBN
978-0-07-802052-0
MHID 0-07-802052-2
Senior Vice President, Products & Markets: Kurt L. Strand
Vice President, Content Production & Technology Services: Kimberly Meriwether David
Managing Director: Douglas Reiner
Senior Brand Manager: Thomas Hayward
Executive Director of Development: Ann Torbert
Development Editor: Kaylee Putbrese
Director of Digital Content: Doug Ruby
Digital Development Editor: Meg B. Maloney
Senior Marketing Manager: Heather A. Kazakoff
Content Project Manager: Diane L. Nowaczyk
Content Project Manager: Brian Nacik
Senior Buyer: Carol A. Bielski
Design: Jana Singer
Cover Image: Adrianna Williams/The Image Bank/Getty Images
Lead Content Licensing Specialist: Keri Johnson
Typeface: 9.5/11 Helvetica Neue 55
Compositor: Aptara, Inc.
Printer: R. R. Donnelley
All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.
Library of Congress Cataloging-in-Publication Data
Lind, Douglas A.
Statistical techniques in business & economics / Douglas A. Lind, Coastal Carolina University and
The University of Toledo, William G. Marchal, The University of Toledo, Samuel A. Wathen, Coastal
Carolina University. Sixteenth edition.
pages cm. (The McGraw-Hill/Irwin series in operations and decision sciences)
Includes index.
ISBN 978-0-07-802052-0 (alk. paper) ISBN 0-07-802052-2 (alk. paper)
1. Social sciencesStatistical methods. 2. EconomicsStatistical methods. 3. Commercial statistics.
I. Marchal, William G. II. Wathen, Samuel Adam. III. Title. IV. Title: Statistical techniques in business
and economics.
HA29.M268 2015
519.5dc23
2013035290
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not
indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not
guarantee the accuracy of the information presented at these sites.
www.mhhe.com
Lin20522_fm_i-xxx.indd Page v 20/11/13 3:45 PM user-f-w-198
D E D I C AT I O N
To Jane, my wife and best friend, and our sons, their wives, and our
grandchildren: Mike and Sue (Steve and Courtney), Steve and Kathryn
(Kennedy, Jake, and Brady), and Mark and Sarah (Jared, Drew, and Nate).
Douglas A. Lind
To my newest grandchildren (George Orn Marchal, Liam Brophy Horowitz,
and Eloise Larae Marchal Murray), newest son-in-law (James Miller
Nicholson), and newest wife (Andrea).
William G. Marchal
To my wonderful family: Isaac, Hannah, and Barb.
Samuel A. Wathen
Lin20522_fm_i-xxx.indd Page vi 20/11/13 3:45 PM user-f-w-198
A NOTE FROM THE AUTHORS
Over the years, we have received many compliments on this text and understand that
its a favorite among students. We accept that as the highest compliment and continue to work very hard to maintain that status.
The objective of Statistical Techniques in Business and Economics is to provide
students majoring in management, marketing, finance, accounting, economics, and
other fields of business administration with an introductory survey of the many applications of descriptive and inferential statistics. We focus on business applications, but
we also use many exercises and examples that relate to the current world of the college student. A previous course in statistics is not necessary, and the mathematical
requirement is first-year algebra.
In this text, we show beginning students every step needed to be successful in
a basic statistics course. This step-by-step approach enhances performance, accelerates preparedness, and significantly improves motivation. Understanding the
concepts, seeing and doing plenty of examples and exercises, and comprehending
the application of statistical methods in business and economics are the focus of
this book.
The first edition of this text was published in 1967. At that time, locating relevant
business data was difficult. That has changed! Today, locating data is not a problem.
The number of items you purchase at the grocery store is automatically recorded at
the checkout counter. Phone companies track the time of our calls, the length of calls,
and the identity of the person called. Credit card companies maintain information on
the number, time and date, and amount of our purchases. Medical devices automatically monitor our heart rate, blood pressure, and temperature from remote locations.
A large amount of business information is recorded and reported almost instantly.
CNN, USA Today, and MSNBC, for example, all have websites that track stock prices
with a delay of less than 20 minutes.
Today, skills are needed to deal with a large volume of numerical information.
First, we need to be critical consumers of information presented by others. Second,
we need to be able to reduce large amounts of information into a concise and meaningful form to enable us to make effective interpretations, judgments, and decisions.
All students have calculators and most have either personal computers or access to
personal computers in a campus lab. Statistical software, such as Microsoft Excel
and Minitab, is available on these computers. The commands necessary to achieve
the software results are available in Appendix C at the end of the book. We use screen
captures within the chapters, so the student becomes familiar with the nature of the
software output.
Because of the availability of computers and software, it is no longer necessary to
dwell on calculations. We have replaced many of the calculation examples with interpretative ones, to assist the student in understanding and interpreting the statistical
results. In addition, we now place more emphasis on the conceptual nature of the
statistical topics. While making these changes, we still continue to present, as best
we can, the key concepts, along with supporting interesting and relevant examples.
WHATS NEW IN THIS SIXTEENTH EDITION?

We have made changes to this edition that we think you and your students will find
useful and timely.
We reorganized the chapters so that each section corresponds to a learning
objective. The learning objectives have been revised.
We expanded the hypothesis testing procedure in Chapter 10 to six steps,
emphasizing the interpretation of test results.
vi
Lin20522_fm_i-xxx.indd Page vii 20/11/13 3:45 PM user-f-w-198
We have revised example/solution sections in various chapters:

Chapter 5 now includes a new example/solution used to demonstrate contingency tables and tree diagrams. Also the example/solution demonstrating
the combination formula has been revised.
Chapter 6 includes a revised example/solution demonstrating the binomial
distribution.
Chapter 15 includes a new example/solution demonstrating contingency table analysis.
We have revised the simple regression example in Chapter 13 and increased the
number of observations to better illustrate the principles of simple linear
regression.
We have reordered the nonparametric chapters to follow the traditional statistics
chapters.
We moved the sections on one- and two-sample tests of proportions, placing all
analysis of nominal data in one chapter: Nonparametric Methods: Nominal Level
Hypothesis Tests.
We combined the answers to the Self-Review Exercises into a new appendix.
We combined the Software Commands into a new appendix.
We combined the Glossaries in the section reviews into a single Glossary that follows the appendices at the end of the text.
We improved graphics throughout the text.
vii
Lin20522_fm_i-xxx.indd Page viii 20/11/13 3:45 PM user-f-w-198
Lin20522_ch04_093-130.indd Page 94 12/10/13 11:42 AM user-f-w-198
H O W A R E C H A P T E R S O R G A N I Z E D T O E N G AG E
S T U D E N T S A N D P R O M O T E L E A R N I N G?
Chapter Learning Objectives

Each chapter begins with a set of learning objectives designed to provide focus for the chapter and motivate
student learning. These objectives, located in the margins next to the topic, indicate what the student should be
able to do after completing each section in the chapter.
MERRILL LYNCH recently completed
LEARNING OBJECTIVES
Chapter Opening Exercise
a study of online investment portfo-
When you have completed this chapter, you will be able to:
lios for a sample of clients. For the
LO2-1
70 participants in the study, organize
A representative exercise opens the

chapter and shows how the chapter
content can be applied to a real-world
situation.
Introduction to the Topic
these data into a frequency distribu-
Summarize qualitative variables with frequency and

relative frequency tables.
LO2-2 Display a frequency table using a bar or pie chart.
tion. (See Exercise 43 and LO2-3.)
LO2-3
Summarize quantitative variables with frequency and

relative frequency distributions.
LO2-4
Display a frequency distribution using a histogram or

frequency polygon.
INTRODUCTION
Chapter 2 began our study of descriptive statistics. To summarize raw data into a
Each chapter starts with a review of
meaningful form, we organized qualitative data into a frequency table and portrayed
the important concepts of the previthe results in a bar chart. In a similar fashion, we organized quantitative data into a
ous chapter and provides a link to the
frequency distribution and portrayed the results in a histogram. We also looked at
other graphical techniques such as pie charts to portray qualitative data and frematerial in the current chapter. This
quency polygons to portray quantitative data.
step-by-step approach increases
This chapter is concerned with two numerical ways of describing quantitative
comprehension by providing continuvariables, namely, measures of location and measures of dispersion. Measures of
ity across the concepts.
location are often referred to as averages. The purpose of a measure of location is to
pinpoint the center of a distribution of data. An
Example/Solution
E X A M P L E
After important concepts are introduced, a solved example is given. This

example provides a how-to illustration
and shows a relevant business application that helps students answer the
question, What will I use this for?
The service departments at Tionesta Ford Lincoln Mercury and Sheffield Motors
Inc., two of the four Applewood Auto Group dealerships, were both open 24 days
last month. Listed below is the number of vehicles serviced last month at the two
dealerships. Construct dot plots and report summary statistics to compare the two
dealerships.
Tionesta Ford Lincoln Mercury
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
23
30
29
35
33
32
25
32
27
28
36
35
28
33
31
37
39
35
32
36
26
32
27
30
Self-Reviews
Self-Reviews are interspersed
throughout each chapter and
closely patterned after the
preceding examples. They
help students monitor their
progress and provide immediate reinforcement for that
particular technique.
viii
The Quality Control department of Plainsville Peanut Company is responsible for checking the
weight of the 8-ounce jar of peanut butter. The weights of a sample of nine jars produced last
hour are:
SELF-REVIEW
42
7.69
(a)
(b)
7.72
7.8
7.86
7.90
7.94
7.97
8.06
What is the median weight?

Determine the weights corresponding to the first and third quartiles.
8.09
Lin20522_fm_i-xxx.indd Page ix 20/11/13 3:45 PM user-f-w-198
Lin20522_ch05_131-172.indd Page 159 12/10/13 12:50 PM user-f-w-198
Statistics in Action
Statistics in Action articles are scattered throughout the text, usually about two per chapter. They
provide unique and interesting applications and
historical insights in the field
of statistics. Page 63 12/10/13
Lin20522_ch03_050-092.indd
STATISTICS IN ACTION
If you wish to get some
attention at the next gathering you attend, announce
11:37 AM user-f-w-198
that you believe that at
least two people present
were born on the same
datethat is, the same day
of the year but not necessarily the same year. If there
are 30 people in the room,
Definitions
Definitions of new terms or terms unique to
the study of statistics are set apart from the
text and highlighted for easy reference and
review. They also appear in the Glossary at
the end of the book.
JOINT PROBABILITY A probability that measures the likelihood two or more

events will happen concurrently.
Formulas
Formulas that are used for the first time are
boxed and numbered for reference. In addition, a formula card is bound into the back
of the text that lists all the key formulas.
Exercises
Exercises are included after
sections within the chapter
and at the end of the chapter. Section exercises cover
the material studied in the
section.
E X E R C I S E S
SPECIAL RULE OF MULTIPLICATION
P(A and B) 5 P(A)P(B)
[55]
33. P(A1 ) 5 .60, P(A2 ) 5 .40, P(B1 A1 ) 5 .05, and P(B1 A2 ) 5 .10. Use Bayes theorem to determine P(A1 B1 ).
34. P(A1 ) 5 .20, P(A2 ) 5 .40, P(A3 ) 5 .40, P(B1 A1 ) 5 .25, P(B1 A2 ) 5 .05, and P(B1 A3 ) 5 .10.
Use Bayes theorem to determine P(A3 B1 ).
35. The Ludlow Wildcats baseball team, a minor league team in the Cleveland Indians organization, plays 70% of their games at night and 30% during the day. The team wins 50% of
their night games and 90% of their day games. According to todays newspaper, they won
yesterday. What is the probability the game was played at night?
36. Dr. Stallter has been teaching basic statistics for many years. She knows that 80% of the
students will complete the assigned problems. She has also determined that among those
who do their assignments, 90% will pass the course. Among those students who do not do
Computer Output
The text includes many software examples, using
Excel, MegaStat, and Minitab.
ix
Lin20522_fm_i-xxx.indd Page x 20/11/13 3:45 PM user-f-w-198
HOW DOES THIS TEXT RE INFORCE

S T U D E N T L E A R N I N G?
Lin20522_ch07_206-246.indd Page 237 10/18/13 8:39 AM f-494
BY C H A P T E R
C H A P T E R
I. A random variable is a numerical value determined by the outcome of an experiment.

II. A probability distribution is a listing of all possible outcomes of an experiment and the probability associated with each outcome.
A. A discrete probability distribution can assume only certain values. The main features are:
1. The sum of the probabilities is 1.00.
2. The probability of a particular outcome is between 0.00 and 1.00.
3. The outcomes are mutually exclusive.
B. A continuous distribution can assume an infinite number of values within a specific range.
III. The mean and variance of a probability distribution are computed as follows.
A. The mean is equal to:
Chapter Summary
Each chapter contains a brief summary of the chapter material, including the vocabulary and the critical
formulas.
[61]
s2 5 [ (x 2 m) 2P(x) ]
[62]
P R O N U N C I A T I O N
Lin20522_ch07_206-246.indd
This tool lists the mathematical
symbol, itsPage 241 10/18/13 8:39 AM f-494
meaning, and how to pronounce it. We believe
this will help the student retain the meaning of
the symbol and generally enhance course
communications.
C H A P T E R
K E Y
SYMBOL
MEANING
PRONUNCIATION
P(A)
Probability of A
P of A
/201-1/MH02018/Lin20522_disk1of1/0078020522/Lin20522_pagefiles
P(,A)
Probability of not A
P of not A
P(A and B)
Probability of A and B
P of A and B
P(A or B)
Probability of A or B
P of A or B
P(A B)
Probability of A given B has happened
P of A given B
Permutation of n items selected r at a time
Pnr
Cr
Combination of n items selected r at a time
Cnr
n r
n
E X E R C I S E S
41. The amount of cola in a 12-ounce can is uniformly distributed between 11.96 ounces and
12.05 ounces.
a. What is the mean amount per can?
b. What is the standard deviation amount per can?
c. What is the probability of selecting a can of cola and finding it has less than 12 ounces?
d. What is the probability of selecting a can of cola and finding it has more than 11.98
ounces?
e. What is the probability of selecting a can of cola and finding it has more than 11.00
ounces?
42. A tube of Listerine Tartar Control toothpaste contains 4.2 ounces. As people use the toothpaste, the amount remaining in any tube is random. Assume the amount of toothpaste remaining in the tube follows a uniform distribution. From this information, we can determine
the following information about the amount remaining in a toothpaste tube without invading
anyones privacy.
a. How much toothpaste would you expect to be remaining in the tube?
b. What is the standard deviation of the amount remaining in the tube?
c. What is the likelihood there is less than 3.0 ounces remaining in the tube?
d. What is the probability there is more than 1.5 ounces remaining in the tube?
43. Many retail stores offer their own credit cards. At the time of the credit application, the
customer is given a 10% discount on the purchase. The time required for the credit application process follows a uniform distribution with the times ranging from 4 minutes to
10 minutes.
a. What is the mean time for the application process?
b. What is the standard deviation of the process time?
c. What is the likelihood a particular application will take less than 6 minutes?
Generally, the end-of-chapter exercises are the most challenging and

integrate the chapter concepts. The
answers and worked-out solutions for
all odd-numbered exercises are in Appendix D at the end of the text. Many
exercises are noted with a data file
icon in the margin. For these exercises,
there are data files in Excel format located on the texts website, www
.mhhe.com/lind16e. These files help
students use statistical software to
solve the exercises.
Data Set Exercises
m 5 [xP(x) ]
B. The variance is equal to:
Pronunciation Key
Chapter Exercises
/201-1/MH02018/Lin20522_disk1of1/0078020522/Lin20522_pagefiles
S U M M A R Y
D A T A
S E T
E X E R C I S E S
(The data for these exercises are available at the text website: www.mhhe.com/lind16e.)
74. Refer to the Real Estate data, which report information on homes sold in the Goodyear,
The last several exercises at the end of
Arizona, area during the last year.
a. The mean selling price (in $ thousands) of the homes was computed earlier to be
each chapter are based on three large
Lin20522_appc_744-755.indd Page 747 19/11/13 9:27 AM f-500
$221.10, with a standard deviation of
$47.11. Use the normal distribution to estimate
data sets. These data sets are printed
the percentage of homes selling for more than $280.0. Compare this to the actual results. Does the normal distribution yield a good approximation of the actual results?
in Appendix A in the text and are also
b. The mean distance from the center of the city is 14.629 miles, with a standard deviation
of 4.874 miles. Use the normal distribution to estimate the number of homes 18 or more
on the texts website. These data sets
miles but less than 22 miles from the center of the city. Compare this to the actual results. Does the normal distribution yield a good approximation of the actual results?
present the students with real-world
and more complex applications.
Software Commands
Software examples using Excel, MegaStat, and Minitab are included throughout the text. The explanations of the
computer input commands are placed at
the end of the text in Appendix C.
CHAPTER 5
51. The Excel Commands to determine the number of permutations shown on page 164 are:
a. Click on the Formulas tab in the top menu, then, on the
far left, select Insert Function fx.
b. In the Insert Function box, select Statistical as the category, then scroll down to PERMUT in the Select a function list. Click OK.
c. In the PERM box after Number, enter 8 and in the
Number_chosen box enter 3. The correct answer of 336
appears twice in the box.
Lin20522_fm_i-xxx.indd Page xi 03/12/13 4:29 PM f-500
Answers to Self-Review
167 a.
Rank
The worked-out solutions to the Self-Reviews are provided

at the end of the text in Appendix E.
d2
805
777
820
682
777
810
805
840
777
820
23
62
60
40
70
28
30
42
55
51
5.5
3.0
8.5
1.0
3.0
7.0
5.5
10.0
3.0
8.5
1
9
8
4
10
2
3
5
7
6
4.5
26.0
0.5
23.0
27.0
5.0
2.5
5.0
24.0
2.5
0
20.25
36.00
0.25
9.00
49.00
25.00
6.25
25.00
16.00
6.25
193.00
BY S E C T I O N
Section Reviews
A REVIEW OF CHAPTERS 14
After selected groups of chapters

This section is a review of the major concepts and terms introduced in Chapters 14. Chapter 1 began by describing the
meaning and purpose of statistics. Next we described the different types of variables and the four levels of measurement.
(14, 57, 8 and 9, 1012, 13 and
Chapter 2 was concerned with describing a set of observations by organizing it into a frequency distribution and then portraying the frequency distribution as a histogram or a frequency polygon. Chapter 3 began by describing measures of location,
14, 15 and 16, and 17 and 18), a
such as the mean, weighted mean, median, geometric mean, and mode. This chapter also included measures of dispersion,
or spread. Discussed in this section were the range, variance, and standard deviation. Chapter 4 included several graphing
Section Review is included. Much
techniques such as dot plots, box plots, and scatter diagrams. We also discussed the coefficient of skewness, which reports
the lack of symmetry in a set of data.
like a review before an exam, these
include a brief overview of the
chapters and problems for review.
Cases
C A S E S
The review also includes continuing

cases and several small cases that
let students make decisions using
tools and techniques from a variety
of chapters.
The following case will appear in subsequent review sections. Assume that you work in the Planning Department of
the Century National Bank and report to Ms. Lamberg. You
will need to do some data analysis and prepare a short written report. Remember, Mr. Selig is the president of the bank,
so you will want to ensure that your report is complete and
accurate. A copy of the data appears in Appendix A.6.
Century National Bank has offices in several cities in
the Midwest and the southeastern part of the United States.
Mr. Dan Selig, president and CEO, would like to know the
characteristics of his checking account customers. What is
the balance of a typical customer?
How many other bank services do the checking account customers use? Do the customers use the ATM service and, if so, how often? What about debit cards? Who
uses them, and how often are they used?
A. Century National Bank
balances for the four branches. Is there a difference

among the branches? Be sure to explain the difference
between the mean and the median in your report.
3. Determine the range and the standard deviation of the
checking account balances. What do the first and third
quartiles show? Determine the coefficient of skewness
and indicate what it shows. Because Mr. Selig does not
deal with statistics daily, include a brief description and
interpretation of the standard deviation and other
measures.
B. Wildcat Plumbing Supply Inc.: Do We

Have Gender Differences?
Wildcat Plumbing Supply has served the plumbing needs of
Southwest Arizona for more than 40 years. The company
was founded by Mr. Terrence St. Julian and is run today by
Practice Test
The Practice Test is intended to
give students an idea of content
that might appear on a test and
how the test might be structured.
The Practice Test includes both
objective questions and problems
covering the material studied in
the section.
P R A C T I C E
T E S T
There is a practice test at the end of each review section. The tests are in two parts. The first part contains several objective
questions, usually in a fill-in-the-blank format. The second part is problems. In most cases, it should take 30 to 45 minutes to
complete the test. The problems require a calculator. Check the answers in the Answer Section in the back of the book.
Part 1Objective
1. The science of collecting, organizing, presenting, analyzing, and interpreting data to assist in
.
making effective decisions is called
2. Methods of organizing, summarizing, and presenting data in an informative way are
.
called
3. The entire set of individuals or objects of interest or the measurements obtained from all
.
individuals or objects of interest are called the
4. List the two types of variables.
1.
2.
3.
4.
xi
Lin20522_fm_i-xxx.indd Page xii 20/11/13 3:45 PM user-f-w-198
W H AT T E C H N O L O G Y C O N N E C T S S T U D E N T S
T O B U S I N E S S S TAT I S T I C S?
MCGRAW-HILL CONNECT
BUSINESS STATISTICS
Less Managing. More Teaching. Greater Learning.
McGraw-Hill Connect Business Statistics is an online assignment and assessment solution that connects students with the tools and resources theyll need to achieve success. McGraw-Hill Connect Business Statistics
helps prepare students for their future by enabling faster learning, more efficient studying, and higher retention of
knowledge.
McGraw-Hill Connect Business Statistics Features

Connect Business Statistics offers a number of powerful tools and features to make managing assignments
easier, so faculty can spend more time teaching. With Connect Business Statistics, students can engage with
their coursework anytime and anywhere, making the learning process more accessible and efficient. Connect
Business Statistics offers you the features described below.
Simple Assignment Management

With Connect Business Statistics, creating assignments is easier than ever, so you can spend more time teaching and less time managing. The assignment management function enables you to
Create and deliver assignments easily with selectable end-of-chapter questions and test bank items.
Streamline lesson planning, student progress reporting, and assignment grading to make classroom management more efficient than ever.
Go paperless with the eBook and online submission and grading of student assignments.
Smart Grading
When it comes to studying, time is precious. Connect Business Statistics helps students learn more efficiently
by providing feedback and practice material when they need it, where they need it. When it comes to teaching,
your time is also precious. The grading function enables you to
Have assignments scored automatically, giving students immediate feedback on their work and side-by-side
comparisons with correct answers.
Access and review each response; manually change grades or leave comments for students to review.
Reinforce classroom concepts with practice tests and instant quizzes.
Instructor Library
The Connect Business Statistics Instructor Library is your repository for additional resources to improve student
engagement in and out of class. You can select and use any asset that enhances your lecture.
Student Study Center

The Connect Business Statistics Student Study Center is the place for students to access additional resources.
The Student Study Center
Offers students quick access to lectures, practice materials, eBooks, and more.
Provides instant practice material and study questions, easily accessible on the go.
xii
Lin20522_fm_i-xxx.indd Page xiii 20/11/13 3:45 PM user-f-w-198
LearnSmart
Students want to make the best use of their study time. The LearnSmart adaptive self-study technology within
Connect Business Statistics provides students with a seamless combination of practice, assessment, and remediation for every concept in the textbook. LearnSmarts intelligent software adapts to every student response and
automatically delivers concepts that advance the students understanding while reducing time devoted to the
concepts already mastered. The result for every student is the fastest path to mastery of the chapter concepts.
LearnSmart
Applies an intelligent concept engine to identify the relationships between concepts and to serve new
concepts to each student only when he or she is ready.
Adapts automatically to each student, so students spend less time on the topics they understand and practice more those they have yet to master.
Provides continual reinforcement and remediation, but gives only as much guidance as students need.
Integrates diagnostics as part of the learning experience.
Enables you to assess which concepts students have efficiently learned on their own, thus freeing class time
for more applications and discussion.
LearnSmart Achieve
LearnSmart Achieve is a revolutionary new learning system that combines a continually adaptive learning experience with necessary course resources to focus students on mastering concepts they dont already know. The
program adjusts to each student individually as he or she progresses, creating just-in-time learning experiences
by presenting interactive content that is tailored to each students needs. A convenient time-management feature
and reports for instructors also ensure students stay on track.
Student Progress Tracking

Connect Business Statistics keeps instructors informed about how each student, section, and class is performing, allowing for more productive use of lecture and office hours. The progress-tracking function enables
you to
View scored work immediately and track individual or group performance with assignment and grade reports.
Access an instant view of student or class performance relative to learning objectives.
Collect data and generate reports required by many accreditation organizations, such as AACSB and AICPA.
McGraw-Hill Connect Plus Business Statistics

McGraw-Hill reinvents the textbook learning experience for the modern student with Connect Plus Business
Statistics. A seamless integration of an eBook and Connect Business Statistics, Connect Plus Business Statistics provides all of the Connect Business Statistics features plus the following:
An integrated eBook, allowing for anytime, anywhere access to the textbook.
Dynamic links between the problems or questions you assign to your students and the location in the eBook
where that problem or question is covered.
A powerful search function to pinpoint and connect key concepts in a snap.
In short, Connect Business Statistics offers you and your students powerful tools and features that optimize
your time and energies, enabling you to focus on course content, teaching, and student learning. Connect Business Statistics also offers a wealth of content resources for both instructors and students. This state-of-the-art,
thoroughly tested system supports you in preparing students for the world that awaits.
xiii
Lin20522_fm_i-xxx.indd Page xiv 20/11/13 3:45 PM user-f-w-198
For more information about Connect, go to www.mcgrawhillconnect.com, or contact your local McGraw-Hill
sales representative.
COURSESMART
CourseSmart is a new way to find and buy eTextbooks. At CourseSmart you can save up
to 50% of the cost of your print textbook, reduce your impact on the environment, and
gain access to powerful web tools for learning. Try a free chapter to see if its right for you.
Visit www.CourseSmart.com and search by title, author, or ISBN.
TEGRITY CAMPUS: LECTURES 24/7

Tegrity Campus is a service that makes class time available 24/7 by automatically
capturing every lecture in a searchable format for students to review when they
study and complete assignments. With a simple one-click start-and-stop process, you capture all computer screens and corresponding audio. Students can replay any part of any class with
easy-to-use browser-based viewing on a PC or Mac.
Educators know that the more students can see, hear, and experience class resources, the better they learn.
In fact, studies prove it. With Tegrity Campus, students quickly recall key moments by using Tegrity Campuss
unique search feature. This search helps students efficiently find what they need, when they need it, across an
entire semester of class recordings. Help turn all your students study time into learning moments immediately
supported by your lecture.
To learn more about Tegrity watch a two-minute Flash demo at http://tegritycampus.mhhe.com.
ASSURANCE OF LEARNING READY

Many educational institutions today are focused on the notion of assurance of learning, an important element of
some accreditation standards. Statistical Techniques in Business & Economics is designed specifically to support
your assurance of learning initiatives with a simple, yet powerful solution.
Each test bank question for Statistical Techniques in Business & Economics maps to a specific chapter learning objective listed in the text. You can use our test bank software, EZ Test and EZ Test Online, or Connect Business Statistics to easily query for learning objectives that directly relate to the learning objectives for your course.
You can then use the reporting features of EZ Test to aggregate student results in similar fashion, making the
collection and presentation of assurance of learning data simple and easy.
MCGRAW-HILL CUSTOMER CARE CONTACT INFORMATION

At McGraw-Hill, we understand that getting the most from new technology can be challenging. Thats why our
services dont stop after you purchase our products. You can e-mail our product specialists 24 hours a day to get
product-training online. Or you can search our knowledge bank of frequently asked questions on our support
website. For customer support, call 800-331-5094, e-mail hmsupport@mcgraw-hill.com, or visit www.mhhe
.com/support. One of our technical support analysts will be able to assist you in a timely fashion.
xiv
Lin20522_fm_i-xxx.indd Page xv 20/11/13 3:45 PM user-f-w-198
W H AT S O F T WA R E I S AVA I L A B L E W I T H
THIS TEXT?
MEGASTAT FOR MICROSOFT EXCEL

MegaStat by J. B. Orris of Butler University is a full-featured Excel statistical analysis add-in that is available on
the MegaStat website at www.mhhe.com/megastat (for purchase). MegaStat works with recent versions of
Microsoft Excel (Windows and Mac OS X). See the website for details on supported versions.
Once installed, MegaStat will always be available on the Excel add-ins ribbon with no expiration date or data limitations. MegaStat performs statistical analyses within an Excel workbook. When a MegaStat menu item is selected, a dialog box pops up for data selection and options. Since MegaStat is an easy-to-use extension of
Excel, students can focus on learning statistics without being distracted by the software. Ease-of-use features
include Auto Expand for quick data selection and Auto Label detect.
MegaStat does most calculations found in introductory statistics textbooks, such as descriptive statistics, frequency distributions, and probability calculations as well as hypothesis testing, ANOVA chi-square, and regression (simple and multiple). MegaStat output is carefully formatted and appended to an output worksheet.
Video tutorials are included that provide a walkthrough using MegaStat for typical business statistics topics. A
context-sensitive help system is built into MegaStat and a Users Guide is included in PDF format.
MINITAB/SPSS/JMP
Minitab Student Version 14, SPSS Student Version 18.0, and JMP Student Edition Version 8 are software
tools that are available to help students solve the business statistics exercises in the text. Each can be packaged
with any McGraw-Hill business statistics text.
xv
Lin20522_fm_i-xxx.indd Page xvi 20/11/13 3:45 PM user-f-w-198
WHAT R E SO U RC E S AR E AVAI L AB LE FO R I N STR UC TO R S?
ONLINE LEARNING CENTER:

www.mhhe.com/lind16e
The Online Learning Center (OLC) provides the instructor with a complete Instructors Manual in Word format, the
complete Test Bank in both Word files and computerized EZ Test format, Instructor PowerPoint slides, text art
files, an introduction to ALEKS, an introduction to McGraw-Hill Connect Business StatisticsTM, and more.
All test bank questions are available in an EZ Test electronic format. Included are a number of multiple-choice,
true/false, and short-answer questions and problems. The answers to all questions are given, along with a rating
of the level of difficulty, chapter goal the question tests, Blooms taxonomy question type, and the AACSB knowledge category.
WebCT/Blackboard/eCollege
All of the material in the Online Learning Center is also
available in portable WebCT, Blackboard, or eCollege
content cartridges provided free to adopters of this
text.
xvi
Lin20522_fm_i-xxx.indd Page xvii 20/11/13 3:46 PM user-f-w-198
W H AT R E S O U R C E S A R E AVA I L A B L E F O R S T U D E N T S?
ALEKS is an assessment and learning

program that provides individualized instruction in Business Statistics, Business Math, and Accounting. Available
online, ALEKS interacts with students
much like a skilled human tutor, with the
ability to assess precisely a students
knowledge and provide instruction on
the exact topics the student is most
ready to learn. By providing topics to
meet individual students needs, allowing students to move between explanation and practice, correcting and
analyzing errors, and defining terms,
ALEKS helps students to master course
content quickly and easily.
ALEKS also includes a new instructor module with powerful, assignment-driven features and extensive content flexibility. ALEKS simplifies course management and allows instructors to spend less time with administrative tasks and more time directing
student learning. To learn more about ALEKS, visit www.aleks.com.
ONLINE LEARNING CENTER:

The Online Learning Center (OLC) provides students with the following content:
Quizzes
PowerPoints
Data sets/files
Appendixes
Chapter 20
BUSINESS STATISTICS CENTER (BSC):

www.mhhe.com/bstat
The BSC contains links to statistical publications and resources,
software downloads, learning aids, statistical websites and
databases, and McGraw-Hill product websites and online
courses.
xvii
Lin20522_fm_i-xxx.indd Page xviii 20/11/13 3:46 PM user-f-w-198
AC K N O W L E D G M E N T S
This edition of Statistical Techniques in Business and Economics is the product of many people: students, colleagues, reviewers,
and the staff at McGraw-Hill/Irwin. We thank them all. We wish to express our sincere gratitude to the survey and focus group participants, and the reviewers:
Reviewers
Sung K. Ahn
Washington State University
Pullman
Vaughn S. Armstrong
Utah Valley University
Scott Bailey
Troy University
Douglas Barrett
University of North Alabama
Arnab Bisi
Purdue University
Pamela A. Boger
Ohio UniversityAthens
Emma Bojinova
Canisius College
Ann Brandwein
Baruch College
Giorgio Canarella
California State UniversityLos
Angeles
Lee Cannell
El Paso Community College
James Carden
University of Mississippi
Mary Coe
St. Mary College of California
Anne Davey
Northeastern State University
Neil Desnoyers
Drexel University
Nirmal Devi
Embry Riddle Aeronautical
University
David Doorn
University of MinnesotaDuluth
Ronald Elkins
Central Washington University
Vickie Fry
Westmoreland County Community
College
Xiaoning Gilliam
Texas Tech University
xviii
Mark Gius
Quinnipiac University
Clifford B. Hawley
West Virginia University
Peter M. Hutchinson
Saint Vincent College
Lloyd R. Jaisingh
Morehead State University
Ken Kelley
University of Notre Dame
Mark Kesh
University of Texas
Melody Kiang
California State UniversityLong
Beach
Morris Knapp
Miami Dade College
David G. Leupp
University of ColoradoColorado
State
Teresa Ling
Seattle University
Cecilia Maldonado
Georgia Southwestern State
University
John D. McGinnis
Pennsylvania StateAltoona
Mary Ruth J. McRae
Appalachian State University
Jackie Miller
The Ohio State University
Carolyn Monroe
Baylor University
Valerie Muehsam
Sam Houston State University
Tariq Mughal
University of Utah
Elizabeth J. T. Murff
Eastern Washington University
Quinton Nottingham
Virginia Polytechnic Institute and
State University
Ren Ordonez
Southern Oregon University
Ed Pappanastos
Troy University
Michelle Ray Parsons
Aims Community College
Robert Patterson
Penn State University
Joseph Petry
University of Illinois at UrbanaChampaign
Germain N. Pichop
Oklahoma City Community College
Tammy Prater
Alabama State University
Michael Racer
University of Memphis
Darrell Radson
Drexel University
Steven Ramsier
Florida State University
Emily N. Roberts
University of ColoradoDenver
Christopher W. Rogers
Miami Dade College
Stephen Hays Russell
Weber State University
Martin Sabo
Community College of Denver
Farhad Saboori
Albright College
Amar Sahay
Salt Lake Community College and
University of Utah
Abdus Samad
Utah Valley University
Nina Sarkar
Queensborough Community College
Roberta Schini
West Chester University of
Pennsylvania
Robert Smidt
California Polytechnic State
University
Gary Smith
Florida State University
Lin20522_fm_i-xxx.indd Page xix 20/11/13 3:46 PM user-f-w-198
Stanley D. Stephenson
Texas State UniversitySan Marcos
Debra Stiver
University of NevadaReno
Bedassa Tadesse
University of MinnesotaDuluth
Stephen Trouard
Mississippi College
Elzbieta Trybus
California State University
Northridge
Daniel Tschopp
Daemen College
Sue Umashankar
University of Arizona
Bulent Uyar
University of Northern Iowa
Jesus M. Valencia
Slippery Rock University
Joseph Van Matre
University of Alabama at
Birmingham
Raja Vatti
St. Johns University
Holly Verhasselt
University of HoustonVictoria
Angie Waits
Gadsden State Community College
Bin Wang
St. Edwards University
Kathleen Whitcomb
University of South Carolina
Blake Whitten
University of Iowa
Oliver Yu
San Jose State University
Zhiwei Zhu
University of Louisiana
Survey and Focus Group

Participants
Nawar Al-Shara
American University
Charles H. Apigian
Middle Tennessee State University
Nagraj Balakrishnan
Clemson University
Philip Boudreaux
University of Louisiana at Lafayette
Nancy Brooks
University of Vermont
Qidong Cao
Winthrop University
Margaret M. Capen
East Carolina University
Robert Carver
Stonehill College
Jan E. Christopher
Delaware State University
James Cochran
Louisiana Tech University
Farideh Dehkordi-Vakil
Western Illinois University
Brant Deppa
Winona State University
Bernard Dickman
Hofstra University
Casey DiRienzo
Elon University
Erick M. Elder
University of Arkansas at Little
Rock
Nicholas R. Farnum
California State UniversityFullerton
K. Renee Fister
Murray State University
Gary Franko
Siena College
Maurice Gilbert
Troy State University
Deborah J. Gougeon
University of Scranton
Christine Guenther
Pacific University
Charles F. Harrington
University of Southern Indiana
Craig Heinicke
Baldwin-Wallace College
George Hilton
Pacific Union College
Cindy L. Hinz
St. Bonaventure University
Johnny C. Ho
Columbus State University
Shaomin Huang
Lewis-Clark State College
J. Morgan Jones
University of North Carolina at
Chapel Hill
Michael Kazlow
Pace University
John Lawrence
California State UniversityFullerton
Sheila M. Lawrence
Rutgers, The State University of
New Jersey
Jae Lee
State University of New York at
New Paltz
Rosa Lemel
Kean University
Robert Lemke
Lake Forest College
Francis P. Mathur
California State Polytechnic
University, Pomona
Ralph D. May
Southwestern Oklahoma State
University
Richard N. McGrath
Bowling Green State University
Larry T. McRae
Appalachian State University
Dragan Miljkovic
Southwest Missouri State
University
John M. Miller
Sam Houston State University
Cameron Montgomery
Delta State University
Broderick Oluyede
Georgia Southern University
Andrew Paizis
Queens College
Andrew L. H. Parkes
Paul Paschke
Oregon State University
Srikant Raghavan
Lawrence Technological
University
Surekha K. B. Rao
Indiana University Northwest
xix
Lin20522_fm_i-xxx.indd Page xx 03/12/13 4:22 PM f-500
Timothy J. Schibik
University of Southern Indiana
Carlton Scott
University of California, Irvine
Samuel L. Seaman
Baylor University
Scott J. Seipel
Middle Tennessee State University
Sankara N. Sethuraman
Augusta State University
Daniel G. Shimshak
University of Massachusetts,
Boston
Robert K. Smidt
California Polytechnic State
University
William Stein
Texas A&M University
Robert E. Stevens
University of Louisiana at Monroe
Debra Stiver
University of NevadaReno
Ron Stunda
Birmingham-Southern College
Edward Sullivan
Lebanon Valley College
Dharma Thiruvaiyaru
Augusta State University
Daniel Tschopp
Daemen College
Bulent Uyar
Lee J. Van Scyoc

University of WisconsinOshkosh
Stuart H. Warnock
Tarleton State University
Mark H. Witkowski
University of Texas at San
Antonio
William F. Younkin
University of Miami
Shuo Zhang
State University of New York,
Fredonia
Zhiwei Zhu
University of Louisiana at
Lafayette
Their suggestions and thorough reviews of the previous edition and the manuscript of this edition make this a better text.
Special thanks go to a number of people. Professor Malcolm Gold, Avila University, reviewed
the page proofs and the solutions manual, checking text and exercises for accuracy. Professor
Jose LopezCalleja, Miami Dade CollegeKendall, prepared the test bank. Professor Vickie Fry,
Westmoreland County Community College, accuracy checked the Connect exercises.
We also wish to thank the staff at McGraw-Hill. This includes Thomas Hayward, Senior Brand
Manager; Kaylee Putbrese, Development Editor; Diane Nowaczyk, Content Project Manager; and
others we do not know personally, but who have made valuable contributions.
xx
Lin20522_fm_i-xxx.indd Page xxi 20/11/13 3:46 PM user-f-w-198
E N H A N C E M E N T S T O S TAT I S T I C A L T E C H N I Q U E S
I N B U S I N E S S & E C O N O M I C S , 16 E
MAJOR CHANGES MADE TO INDIVIDUAL

CHAPTERS:
CHAPTER 1 What Is Statistics?
New photo and chapter opening exercise on the Nook Color
sold by Barnes & Noble.
Revised Self-Review 64 applying the binomial distribution.

New exercise 10 using the number of underwater loans.
New exercise using a raffle at a local golf club to demonstrate probability and expected returns.
CHAPTER 7 Continuous Probability Distributions
New introduction with new graphic showing the increasing

amount of information collected and processed with new
technologies.
Updated Statistics in Action.
New ordinal scale example based on rankings of states

based on business climate.
Revised explanation of the Empirical Rule as it relates to the

normal distribution.
Revised Self-Review 72 based on daily personal water

consumption.
The chapter includes several new examples.

Chapter is more focused on the revised learning objectives
and improving the chapters flow.
CHAPTER 8 Sampling Methods and the Central

Limit Theorem
Revised exercise 17 is based on economic data.
New example of simple random sampling and the application of the table of random numbers.
CHAPTER 2 Describing Data: Frequency

Tables, Frequency Distributions, and Graphic
Presentation
The discussions of systematic random, stratified random,

and cluster sampling have been revised.
Revised exercise 44 based on the price of a gallon of milk.
Revised Self-Review 23 to include data.

Updated the company list in revised exercise 38.
New or revised exercises 45, 47, and 48.
CHAPTER 9 Estimation and Confidence Intervals

New Statistics in Action describing EPA fuel economy.
New separate section on point estimates.
CHAPTER 3 Describing Data: Numerical

Measures
Reorganized chapter based on revised learning objectives.
Replaced the mean deviation with more emphasis on the
variance and standard deviation.
Updated statistics in action.
Integration and application of the central limit theorem.

A revised simulation demonstrating the interpretation of
confidence level.
New presentation on using the t table to find z values.
A revised discussion of determining the confidence interval
for the population mean.
Expanded section on calculating sample size.
CHAPTER 4 Describing Data: Displaying and

Exploring Data
Updated exercise 22 with 2012 New York Yankee player
salaries.
CHAPTER 5 A Survey of Probability Concepts

New explanation of odds compared to probabilities.
New exercise 21.
New example/solution for demonstrating contingency tables
and tree diagrams.
New exercise 12 (milk consumption).
CHAPTER 10 One-Sample Tests of Hypothesis

New example/solution involving airport parking.
Revised software solution and explanation of p-values.
New exercises 17 (daily water consumption) and 19 (number
of text messages by teenagers).
Conducting a test of hypothesis about a population proportion is moved to Chapter 15.
New contingency table exercise 31.
New example introducing the concept of hypothesis

testing.
Revised example/solution demonstrating the combination

formula.
Sixth step added to the hypothesis testing procedure emphasizing the interpretation of the hypothesis test results.
CHAPTER 6 Discrete Probability Distributions
CHAPTER 11 Two-Sample Tests of Hypothesis
Revised the section on the binomial distribution.
New introduction to the chapter.
Revised example/solution demonstrating the binomial

distribution.
Section of two-sample tests about proportions moved to

Chapter 15.
xxi
Lin20522_fm_i-xxx.indd Page xxii 20/11/13 3:46 PM user-f-w-198
Changed subscripts in example/solution for easier

understanding.
Updated exercise with 2012 New York Yankee player
salaries.
CHAPTER 12 Analysis of Variance

New introduction to the chapter.
New exercise 24 using the speed of browsers to search the
Internet.
Revised exercise 33 comparing learning in traditional versus
online courses.
New section on Comparing Two Population Variances.
New example illustrating the comparison of variances.
Revised section on two-way ANOVA with interaction with
new examples and revised example/solution.
Revised the names of the airlines in the one-way ANOVA
example.
Changed the subscripts in example/solution for easier
understanding.
New exercise 30 (flight times between Los Angeles and
SanFrancisco).
CHAPTER 13 Correlation and Linear Regression
CHAPTER 15 Nonparametric Methods: Nominal

Level Hypothesis Tests
Moved and renamed chapter.
Moved one-sample and two-sample tests of proportions
from Chapters 10 and 11 to Chapter 15.
New example introducing goodness-of-fit tests.
Removed the graphical methods to evaluate normality.
Revised section on contingency table analysis with a new
example/solution.
Revised Data Set exercises.
CHAPTER 16 Nonparametric Methods: Analysis

of Ordinal Data
Moved and renamed chapter.
New example/solution and self-review demonstrating a
hypothesis test about the median.
New example/solution demonstrating the rank-order
correlation.
CHAPTER 17 Index Numbers

Moved chapter to follow nonparametric statistics.
Updated dates, illustrations, and examples.
Rewrote the introduction section to the chapter.
Revised example/solution demonstrating the use of the Production Price Index to deflate sales dollars.
The data used as the basis for the North American Copier
Sales example/solution used throughout the chapter has
been changed and expanded to 15 observations to more
clearly demonstrate the chapters learning objectives.
Revised example/solution demonstrating the comparison of

the Dow Jones Industrial Average and the Nasdaq using
indexing.
Revised section on transforming data using the economic

relationship between price and sales.
New exercises 35 (transforming data), 36 (Masters prizes
and scores), 43 (2012 NFL points scored versus points
allowed), 44 (store size and sales), and 61 (airline distance
and fare).
CHAPTER 14 Multiple Regression Analysis

Rewrote the section on evaluating the multiple regression
equation.
More emphasis on the regression ANOVA table.
Enhanced the discussion of the p-value in decision making.
More emphasis on calculating the variance inflation factor to
evaluate multicollinearity.
xxii
New self-review about using indexes to compare two different measures over time.
Revised Data Set Exercise.
CHAPTER 18 Time Series and Forecasting

Moved chapter to follow nonparametric statistics and index
numbers.
Updated dates, illustrations, and examples.
Revised section on the components of a time series.
Revised graphics for better illustration.
CHAPTER 19 Statistical Process Control and

Quality Management
Updated 2012 Malcolm Baldrige National Quality Award
winners.
Lin20522_fm_i-xxx.indd Page xxiii 21/11/13 11:17 AM f-500
BRIEF CONTENTS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
What Is Statistics?
Describing Data: Frequency Tables, Frequency Distributions, and

Graphic Presentation
17
Describing Data: Numerical Measures
50
Describing Data: Displaying and Exploring Data

A Survey of Probability Concepts
131
Discrete Probability Distributions
173
Continuous Probability Distributions
93
206
Review Section
Sampling Methods and the Central Limit Theorem

Estimation and Confidence Intervals
247
279
One-Sample Tests of Hypothesis
315
Two-Sample Tests of Hypothesis
348
Analysis of Variance
Review Section
Review Section
379
Review Section
Correlation and Linear Regression

Multiple Regression Analysis
426
476
Review Section
Nonparametric Methods: Nominal Level Hypothesis Tests

Nonparametric Methods: Analysis of Ordinal Data
Index Numbers
570
Review Section
608
Time Series and Forecasting
639
Review Section
Statistical Process Control and Quality Management

An Introduction to Decision Theory
716
816
Photo Credits
Index
682
On the website:
Appendixes:
Data Sets, Tables, Software Commands, Answers
Glossary
533
822
823
xxiii
Lin20522_fm_i-xxx.indd Page xxiv 21/11/13 11:19 AM f-500
CONTENTS
A Note from the Authors
vi
1 What Is Statistics?
EXERCISES
40
Chapter Summary 41
Introduction 2
Chapter Exercises 42
Why Study Statistics? 2
Data Set Exercises 49
What Is Meant by Statistics? 3

Types of Statistics 4
Descriptive Statistics 4
Inferential Statistics 5
3 Describing Data:
Numerical Measures
Types of Variables 6
Introduction 51
Levels of Measurement 7
Measures of Location 51
Nominal-Level Data 7
Ordinal-Level Data 8
Interval-Level Data 9
Ratio-Level Data 10
EXERCISES
The Population Mean 52

The Sample Mean 53
Properties of the Arithmetic Mean
11
EXERCISES
Ethics and Statistics 12
EXERCISES
Chapter Summary 13
EXERCISES
2 Describing Data:
Frequency Tables,
Frequency Distributions,
and Graphic
Presentation
17
Introduction 18
Relative Class Frequencies
Graphic Presentation of Qualitative Data 20

24
30
31
EXERCISES
67
Why Study Dispersion? 68
72
Population Variance 73
Population Standard Deviation
75
75
Sample Variance and Standard

Deviation 76
Software Solution 77
78
Interpretation and Uses of the Standard

Deviation 78
34
Chebyshevs Theorem 78
The Empirical Rule 79
36
Cumulative Frequency Distributions
65
The Geometric Mean 65
EXERCISES
Graphic Presentation of a Frequency

Distribution 32
xxiv
EXERCISES
EXERCISES
Constructing Frequency Distributions 25
EXERCISES
63
The Weighted Mean 64
EXERCISES
20
Relative Frequency Distribution
62
Software Solution
Range 69
Variance 70
Constructing Frequency Tables 19
Histogram 32
Frequency Polygon
60
The Relative Positions of the Mean,

Median, and Mode 61
EXERCISES
55
The Median 56
The Mode 58
Computer Software Applications 12
EXERCISES
54
37
EXERCISES
80
50
Lin20522_fm_i-xxx.indd Page xxv 21/11/13 11:17 AM f-500
xxv
CONTENTS
The Mean and Standard Deviation of

Grouped Data 81
Arithmetic Mean of Grouped Data 81
Standard Deviation of Grouped Data 82
EXERCISES
84
Pronunciation Key 87
EXERCISES
Special Rule of Multiplication 146

General Rule of Multiplication 147
Contingency Tables 149
93
EXERCISES
Stem-and-Leaf Displays 96
154
100
Quartiles, Deciles, and Percentiles
159
Principles of Counting 160
Measures of Position 102

102
105
Box Plots 106
The Multiplication Formula 160

The Permutation Formula 161
The Combination Formula 163
EXERCISES
165
Chapter Summary 165

108
Skewness 109

113
Describing the Relationship between

Two Variables 114
Contingency Tables 116
EXERCISES
152
Bayes Theorem 156
Dot Plots 94
EXERCISES
Tree Diagrams
EXERCISES
Introduction 94
EXERCISES
145
Rules of Multiplication to Calculate

Probability 146
EXERCISES
139
Special Rule of Addition 140

Complement Rule 142
The General Rule of Addition 143
Chapter Summary 85
EXERCISES
EXERCISES
Rules of Addition for Computing Probabilities 140
Ethics and Reporting Results 85
4 Describing Data:
Displaying and
Exploring Data
Classical Probability 135

Empirical Probability 136
Subjective Probability 138
117
Chapter Summary 119

A REVIEW OF CHAPTERS 14 125

PROBLEMS 126
CASES 128
PRACTICE TEST 129
5 A Survey of Probability
Concepts
131
Introduction 132
What Is a Probability? 133
Approaches to Assigning Probabilities 135
6 Discrete Probability
Distributions
173
Introduction 174
What Is a Probability Distribution? 174
Random Variables 176
Discrete Random Variable 177
Continuous Random Variable 177
The Mean, Variance, and Standard Deviation of a
Discrete Probability Distribution 178
Mean 178
Variance and Standard Deviation
EXERCISES
178
180
Binomial Probability Distribution 182

How Is a Binomial Probability Computed?
Binomial Probability Tables 185
EXERCISES
188
Cumulative Binomial Probability

Distributions 189
EXERCISES
190
Hypergeometric Probability Distribution 191
183
Lin20522_fm_i-xxx.indd Page xxvi 21/11/13 11:17 AM f-500
xxvi
CONTENTS
EXERCISES
Simple Random Sampling 249

Systematic Random Sampling 252
Stratified Random Sampling 252
Cluster Sampling 253
194
Poisson Probability Distribution 194

EXERCISES
199
Chapter Summary 199
EXERCISES
254
Sampling Error 256
Sampling Distribution of the Sample Mean 258

EXERCISES
7 Continuous Probability
Distributions
206
EXERCISES
268
Using the Sampling Distribution

of the Sample Mean 269
Introduction 207
The Family of Uniform Probability
Distributions 207
EXERCISES
261
The Central Limit Theorem 262
EXERCISES
272
Chapter Summary 272
210
The Family of Normal Probability

Distributions 211
The Standard Normal Probability Distribution 214
Applications of the Standard Normal

Distribution 215
The Empirical Rule 215
EXERCISES
9 Estimation and
Confidence Intervals
217
Finding Areas under the Normal Curve

EXERCISES
221
EXERCISES
223
EXERCISES
226
217
Population Standard Deviation, Known s

A Computer Simulation 286
Continuity Correction Factor 227

How to Apply the Correction Factor
229
230
235
288
EXERCISES
296
A Confidence Interval for a Population

Proportion 297
EXERCISES
Chapter Summary 236
300
Choosing an Appropriate Sample Size 300


PROBLEMS 242
Sample Size to Estimate a Population Mean 301

Sample Size to Estimate a Population
Proportion 302
EXERCISES
304
Finite-Population Correction Factor 304

EXERCISES
CASES 243
306
Chapter Summary 307
PRACTICE TEST 245
8 Sampling Methods
and the Central Limit
Theorem
247
Introduction 248

PROBLEMS 312
CASE 313
Sampling Methods 248

Reasons to Sample
EXERCISES
282
Population Standard Deviation, s Unknown 289
The Family of Exponential Distributions 231

EXERCISES
Point Estimate for a Population Mean 280

Confidence Intervals for a Population Mean 281
The Normal Approximation to the Binomial 226
EXERCISES
279
Introduction 280
248
PRACTICE TEST 313
Lin20522_fm_i-xxx.indd Page xxvii 20/11/13 3:46 PM user-f-w-198
xxvii
CONTENTS
Comparing Dependent and

Independent Samples 368
10 One-Sample Tests
of Hypothesis
315
EXERCISES
370
Introduction 316
Chapter Summary 371
What Is a Hypothesis? 316
What Is Hypothesis Testing? 317
Six-Step Procedure for Testing a Hypothesis 317
Step 1: State the Null Hypothesis (H0) and the

Alternate Hypothesis (H1) 318
Step 2: Select a Level of Significance 319
Step 3: Select the Test Statistic 320
Step 4: Formulate the Decision Rule 320
Step 5: Make a Decision 321
Step 6: Interpret the Result 322
One-Tailed and Two-Tailed Tests of
Significance 322
Testing for a Population Mean: Known Population
Standard Deviation 324
EXERCISES
The F Distribution 380

Testing a Hypothesis of Equal Population
Variances 381
EXERCISES
385
ANOVA: Analysis of Variance 385
EXERCISES
394
397
Two-Way Analysis of Variance 399
336
EXERCISES
337
403
Two-Way ANOVA with Interaction 404
338
Interaction Plots 404

Testing for Interaction 405
Hypothesis Tests for Interaction
Type II Error 339

EXERCISES
Comparing Two Population Variances 380
Inferences about Pairs of Treatment Means 395
330
Testing for a Population Mean: Population

Standard Deviation Unknown 331
A Software Solution
Introduction 380
EXERCISES
p-Value in Hypothesis Testing 328
EXERCISES
342
EXERCISES
Chapter Summary 342
407
409
Chapter Summary 410
11 Two-Sample Tests
of Hypothesis
348

PROBLEMS 422
Introduction 349
CASES 424
Two-Sample Tests of Hypothesis:

Independent Samples 349
EXERCISES
PRACTICE TEST 424
354
Comparing Population Means with Unknown

Population Standard Deviations 355
Two-Sample Pooled Test
EXERCISES
355
364
Two-Sample Tests of Hypothesis:

Dependent Samples 364
13 Correlation and Linear

Regression
426
Introduction 427
359
Unequal Population Standard Deviations

EXERCISES
379
ANOVA Assumptions 385

The ANOVA Test 387
A Two-Tailed Test 324

A One-Tailed Test 327
EXERCISES
12 Analysis of Variance
What Is Correlation Analysis? 427

361
The Correlation Coefficient 430

EXERCISES
435
Testing the Significance of the Correlation

Coefficient 437
Lin20522_fm_i-xxx.indd Page xxviii 20/11/13 3:46 PM user-f-w-198
xxviii
CONTENTS
EXERCISES
Variation in Residuals Same for Large and

Small y Values 496
Distribution of Residuals 496
Multicollinearity 497
Independent Observations 499
440
Regression Analysis 440

Least Squares Principle 441
Drawing the Regression Line 443
EXERCISES
446
Qualitative Independent Variables 499
Testing the Significance of the Slope 448

EXERCISES
Regression Models with Interaction 502
450
Stepwise Regression 504
Evaluating a Regression Equations Ability

to Predict 450
EXERCISES
Review of Multiple Regression 508
The Standard Error of Estimate 450

The Coefficient of Determination 451
EXERCISES
Chapter Summary 514

452
Relationships among the Correlation Coefficient,

the Coefficient of Determination, and the
Standard Error of Estimate 453
EXERCISES
454
Assumptions Underlying Linear Regression

Constructing Confidence and Prediction
Intervals 456
PROBLEMS 529
455
CASES 530
PRACTICE TEST 531
459
Transforming Data 459

EXERCISES
Interval Estimates of Prediction 455
EXERCISES
506
462
Chapter Summary 463
15 Nonparametric Methods:
Nominal Level Hypothesis
Tests
533
Introduction 534
Test a Hypothesis of a Population Proportion 534
14 Multiple Regression
Analysis
476
Introduction 477
Multiple Regression Analysis 477
EXERCISES
481
Evaluating a Multiple Regression Equation 482

The ANOVA Table 483
Multiple Standard Error of Estimate 484
Coefficient of Multiple Determination 484
Adjusted Coefficient of Determination 485
EXERCISES
486
Inferences in Multiple Linear Regression 487

Global Test: Testing the Multiple
Regression Model 487
Evaluating Individual Regression
Coefficients 489
EXERCISES
537
EXERCISES
542
Goodness-of-Fit Tests: Comparing Observed and

Expected Frequency Distributions 543
Hypothesis Test of Equal Expected
Frequencies 543
EXERCISES
548
Hypothesis Test of Unequal Expected

Frequencies 549
Limitations of Chi-Square 551
EXERCISES
553
Testing the Hypothesis That a Distribution

Is Normal 554
EXERCISES
557
Contingency Table Analysis 558

EXERCISES
561
Chapter Summary 562
493
Evaluating the Assumptions of Multiple

Regression 494
Linear Relationship
EXERCISES
Two-Sample Tests about Proportions 538
494

Lin20522_fm_i-xxx.indd Page xxix 20/11/13 3:46 PM user-f-w-198
xxix
CONTENTS
16 Nonparametric
Methods: Analysis
of Ordinal Data
Paasche Price Index 618

Fishers Ideal Index 619
EXERCISES
570
Introduction 571
The Sign Test 571
EXERCISES
580
Wilcoxon Signed-Rank Test for Dependent

Populations 580
EXERCISES
593
Rank-Order Correlation 595
Special Uses of the Consumer Price

Index 628
Shifting the Base 630
633
Chapter Summary 633

18 Time Series and

Forecasting
639
Introduction 640
Testing the Significance of rs 597

EXERCISES
626
Data Set Exercise 638
589
Kruskal-Wallis Test: Analysis of Variance by

Ranks 589
EXERCISES
625
Consumer Price Index 627
EXERCISES
584
Wilcoxon Rank-Sum Test for Independent

Populations 585
EXERCISES
622
Consumer Price Index 623

Producer Price Index 624
Dow Jones Industrial Average (DJIA)
EXERCISES
578
Testing a Hypothesis about a Median 578

EXERCISES
621
Special-Purpose Indexes 622
575
Using the Normal Approximation to the

Binomial 576
EXERCISES
Value Index
EXERCISES
620
Components of a Time Series 640
598
Secular Trend 640

Cyclical Variation 641
Seasonal Variation 642
Irregular Variation 642
Chapter Summary 600

A Moving Average 643
Weighted Moving Average 646

EXERCISES
649
Linear Trend 649
PROBLEMS 605
Least Squares Method
CASES 606
EXERCISES
PRACTICE TEST 607
650
652
Nonlinear Trends 653

EXERCISES
17 Index Numbers
Seasonal Variation 655

608
Introduction 609
661
Deseasonalizing Data 662
Why Convert Data to Indexes? 612

Construction of Index Numbers 612
Using Deseasonalized Data to Forecast 663

EXERCISES
614
665
The Durbin-Watson Statistic 665
Unweighted Indexes 614

Simple Average of the Price Indexes
Simple Aggregate Index 616
Weighted Indexes 616
Laspeyres Price Index
Determining a Seasonal Index 656

EXERCISES
Simple Index Numbers 609
EXERCISES
655
615
EXERCISES
671
Chapter Summary 671

616
Data Set Exercise 678
Lin20522_fm_i-xxx.indd Page xxx 20/11/13 3:46 PM user-f-w-198
xxx
CONTENTS

PROBLEMS 680
PRACTICE TEST 680
EXERCISES
Opportunity Loss
EXERCISES
Expected Opportunity Loss
19 Statistical Process
Control and Quality
Management
682
Introduction 683
A Brief History of Quality Control 683
Six Sigma
686
EXERCISES
Maximin, Maximax, and Minimax Regret
Strategies
Value of Perfect Information
Sensitivity Analysis
EXERCISES
Decision Trees
Sources of Variation 686
Chapter Summary
Diagnostic Charts 687
Chapter Exercises
Pareto Charts 687

Fishbone Diagrams 689
EXERCISES
Purpose and Types of Quality Control Charts 691

Control Charts for Variables 691
Range Charts 694
In-Control and Out-of-Control Situations 696
EXERCISES
698
Attribute Control Charts 699

p-Charts 699
c-Bar Charts 702
EXERCISES
APPENDIXES
715
690
Appendix A: Data Sets 716

Appendix B: Tables 726
Appendix C: Software Commands 744
Appendix D: Answers to Odd-Numbered Chapter
Exercises & Review Exercises & Solutions to Practice
Tests 756
Appendix E: Answers to Self-Review 802
704
Acceptance Sampling 705

EXERCISES
709
Glossary 816
Chapter Summary 709
Photo Credits 822
Index 823
On the website: www.mhhe.com/lind16e
20 An Introduction
to Decision Theory
Introduction
Elements of a Decision
Decision Making under Conditions of Uncertainty
Payoff Table
Expected Payoff

Lind16e Preface

Uploaded by

Copyright:

Available Formats

Lind16e Preface

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Lind16e Preface

Uploaded by

Copyright:

Available Formats

Lin20522_fm_i-xxx.

indd Page iii 20/11/13 3:45 PM user-f-w-198

Lin20522_fm_i-xxx.indd Page iv 20/11/13 3:45 PM user-f-w-198

STATISTICAL TECHNIQUES IN BUSINESS & ECONOMICS, SIXTEENTH EDITION

Lin20522_fm_i-xxx.indd Page v 20/11/13 3:45 PM user-f-w-198

Lin20522_fm_i-xxx.indd Page vi 20/11/13 3:45 PM user-f-w-198

A NOTE FROM THE AUTHORS

WHATS NEW IN THIS SIXTEENTH EDITION?

Lin20522_fm_i-xxx.indd Page vii 20/11/13 3:45 PM user-f-w-198

We have revised example/solution sections in various chapters:

Lin20522_fm_i-xxx.indd Page viii 20/11/13 3:45 PM user-f-w-198

Lin20522_ch04_093-130.indd Page 94 12/10/13 11:42 AM user-f-w-198

Chapter Learning Objectives

Chapter Opening Exercise

a study of online investment portfo-

lios for a sample of clients. For the

70 participants in the study, organize

Lin20522_ch03_050-092.indd Page 51 12/10/13 11:37 AM user-f-w-198

A representative exercise opens the

Introduction to the Topic

these data into a frequency distribu-

Summarize qualitative variables with frequency and

tion. (See Exercise 43 and LO2-3.)

Summarize quantitative variables with frequency and

Display a frequency distribution using a histogram or

After important concepts are introduced, a solved example is given. This

What is the median weight?

Lin20522_fm_i-xxx.indd Page ix 20/11/13 3:45 PM user-f-w-198

Lin20522_ch05_131-172.indd Page 159 12/10/13 12:50 PM user-f-w-198

Lin20522_ch05_131-172.indd Page 144 12/10/13 12:50 PM user-f-w-198

JOINT PROBABILITY A probability that measures the likelihood two or more

SPECIAL RULE OF MULTIPLICATION

P(A and B) 5 P(A)P(B)

Lin20522_fm_i-xxx.indd Page x 20/11/13 3:45 PM user-f-w-198

HOW DOES THIS TEXT RE INFORCE

I. A random variable is a numerical value determined by the outcome of an experiment.

Probability of A given B has happened

Permutation of n items selected r at a time

Combination of n items selected r at a time

Generally, the end-of-chapter exercises are the most challenging and

Data Set Exercises

Lin20522_ch04_093-130.indd Page 125 12/10/13 11:43 AM user-f-w-198

Lin20522_fm_i-xxx.indd Page xi 03/12/13 4:29 PM f-500

The worked-out solutions to the Self-Reviews are provided

Lin20522_ch04_093-130.indd Page 128 12/10/13 11:43 AM user-f-w-198

After selected groups of chapters

The review also includes continuing

A. Century National Bank

balances for the four branches. Is there a difference

B. Wildcat Plumbing Supply Inc.: Do We

Lin20522_fm_i-xxx.indd Page xii 20/11/13 3:45 PM user-f-w-198

McGraw-Hill Connect Business Statistics Features

Simple Assignment Management

Student Study Center

Lin20522_fm_i-xxx.indd Page xiii 20/11/13 3:45 PM user-f-w-198

Student Progress Tracking

McGraw-Hill Connect Plus Business Statistics

Lin20522_fm_i-xxx.indd Page xiv 20/11/13 3:45 PM user-f-w-198

TEGRITY CAMPUS: LECTURES 24/7

ASSURANCE OF LEARNING READY