2nd hidition

TARO YAMANE
NEW Y O R K UNIVERSITY

STATISTICS;
An Introductory
Analysis

A HARPER INTERNATIONAL EDITION

jointly published by
HARPER & ROW, NEW YORK, EVANSTON & LONDON
AND JOHN WEATHERHILL, INC., TOKYO
CONTENTS

Preface: Note on Uses and Organization xv

Preface to the Second Edition . xvii

Acknowledgments xix

1. Introduction 1

1.1. Statistical Techniques 2

1.2. Statistical Tables 3
1.3. Graphic Presentation 5

2. Frequency Distribution 6

2.1. The Concept of a Variable 6

2.2. Frequency Distribution 10
2.3. Graphic Presentation 14
2.4. Cumulative Frequency Distribution 20
2.5. Relative Frequencies 29

3. Measures of Location 35

3.1. The Arithmetic Mean 37

3.2. The Median 47
3.3. The Mode 51
3.4. Comparison of the Mean, Median, and Mode 53
3.5. The Geometric Mean 54

vii
viii CONTENTS
4. Measures of Dispersion 59
4.1. The Range 59
4.2. Mean Deviations 60
4.3. The Standard Deviation 61
4.4. Relative Dispersion (Coefficient of Variation) 75

5. Probability Theory 78
5.1. Preliminary Ideas 79
5.2. The Objective Approach to Probability 86
5.3. The Subjective Approach 94
5.4. Postulates of Probability Theory 96
5.5. Conditional Probabilities 99
5.6. A Rule for Multiplication of Probabilities 105
5.7. Statistical Independence 107
5.8. Mathematical Expectation and Random Variable 110
5.9. Summary 112

6. The Normal Curve and Normal Area Table 113

6.1. Introduction 113
6.^. Heuristic Explanation of the Normal Curve and Normal
Area Table 115
6.3. Discussion of the Normal Distribution 122
6.4. Continuity Correction 124
6.5. Ordinate of the Normal Distribution 126

7. Sampling Distribution 129

7.1. All Possible Samples 129
7.2. Simple Random Sampling 133
7.3. Some Practical Problems 138
7.4. Sampling Distribution 139
7.5. Comments on the Standard Error Formula 161
7.6. The Sampling Distribution of the Sample Proportion 162

8. Testing Hypotheses 168

8.1. Introduction of New Terminology 168

8.2. Type I and Type II Errors 172
8.3. Testing Hypotheses 174
8.4. Simple Decision Problems 188
CONTENTS ix

8.5. Examples Using the Sample Mean . 204

8.6. Decision Rules Concerning Proportions 215
8.7. Changing the Sample Size 222
8.8. Calculations of the Decision Rule when /8 is Given 224

9. Decision Theory 227

9.1. Introduction-Payoff Table 228

9.2. Expected Values of an Act 232

10. Estimation 237

10.1. Introduction—Estimation and Estimators 237

10.2. Unbiasedness 240
10.3. Consistent Estimator 241
10.4. Efficiency 242
10.5. Sufficiency 244
10.6. Method of Maximum Likelihood (ML) 245
10.7. The Relationship among the Error, Risk, and Sample
Size 251
10.8. Interval Estimation 259

11. Index Numbers 265

11.1. Weighted Relative Price Index 265

11.2. Weighted Aggregative Price Index 273
11.3. Variations of the Weighted Price Indices 275
11.4. Chain Index Numbers 281
11.5. Splicing and Shifting the Base of Index Numbers 286
11.6. Deflating Prices and Income 294
11.7. Comments on Price Indices 297
11.8. Quantity Index Numbers 304

12. Time Series—Trend Line 330

12.1. Review 330

12.2. Introduction 332
12.3. The Freehand Method 334
12.4. Method of Semiaverages 336
12.5. The Method of Moving Averages 337
12.6. The Method of Least Squares 339
12.7. Changing the Unit Value and Shifting the Origin 345
x CONTENTS

13. Seasonal and Cyclical Movement 350

13.1. Definitions of Terms 350
13.2. Seasonal Variation 353
13.3. The Method of Simple Averages 354
13.4. Ratio-to-Moving Average Method . 357
13.5. Seasonally Adjusted Data 360
13.6. Cyclical Fluctuations 362
13.7. Comments on Time Series 363

14. Linear Regression Analysis , 368

14.1. Introduction 368
14.2. The Regression Problem 369
14.3. Estimation of A and B—Type I Population Case 379
14.4. Finding a Regression Function 384
14.5. Sample Standard Deviation (Standard Error of Estimate) 389
14.6. Interpretation of crY\ and the Coefficient of Determina-
tion r2 391
14.7. Estimating <j\ and <T\ 405
14.8. Summary 411
14.9. Estimating^ and B—Type II Population 412
14.10. Tests Concerning a and b 415
14.11. Confidence Interval for crYX 419
14.12. Confidence Interval for Y 425
14.13. Comments on Regression Analysis 428

15. Correlation Analysis 431

15.1. The Bivariate Distribution 432
15.2. Correlation Coefficient: Case I 435
15.3. The Bivariate Distribution and Regression Analysis 445
15.4. The Correlation Coefficient: Case II 447
15.5. Comments and Summary 457
15.6. Tests of Hypothesis Concerning Correlation Coefficients 462
15.7. Rank Correlation 467

16. Random Variables and Probability Distributions 473

16.1. Sets 473
16.2. Sample Space 476
16.3. Axioms 478
CONTENTS xi

16.4. Random Variable 479

16.5. Conditional Probability 488

17. The t Distribution 502

17.1. Expected Value of Sample Variance 503

17.2. Pooled Variance 504
17.3. Degrees of Freedom 505
17.4. The t Distribution 507
17.5. Examples 511
17.6. Tests Concerning the Difference of Two Means 514
17.7. Confidence Intervals for a Mean 524
17.8. Confidence Interval for the Difference Between Means
from Two Populations when the Standard Deviations
Are Known 527
17.9. Confidence Interval for the Difference Between Means
from Two Normal Populations when the Standard
Deviations Are Unknown 528

18. The Binomial Distribution 531

18.1.Bernoulli Trials 531

18.2.A Geometrical Interpretation 533
18.3.Finding the Binomial Distribution 535
18.4.Tables of the Binomial Probability Distribution 537
18.5.The Sampling Distribution of the Sample Proportion p 541
18.6.Tests of Hypotheses, Using the Binomial Distribution 550
18.7.Calculation of the OC Curve . 557
18.8.Estimators of 77 and o-p 562
18.9.The Normal Distribution as an Approximation of the
Binomial Distribution 567
18.10. Confidence Interval 572
18.11. Determining the Sample Size n by Use of a Confidence
Interval 579
18.12. Comparison of Two Percentages 584

19. The Poisson Distribution 588

19.1. The Poisson Distribution as the Limit of the Binomial

Distribution 589
19.2. The Poisson Process 594
xii CONTENTS

19.3. Finding the Poisson Distribution 595

19.4. Estimation of X and Applications 599
19.5. The Multinomial Distribution 606
19.6. The Hypergeometric Distribution 611

20. The Chi-Square Distribution 613

2
20.1. x Distribution and Its Properties 614
20.2. K. Pearson's Approximation 616
20.3. The Goodness-of-Fit Test 617
20.4. Tests of Independence: Contingency Tables 625
20.5. Test of Homogeneity 636
20.6. Confidence Interval for cr2 640

21. The F Distribution 642

21.1. The F Distribution 642
21.2. TheF Table 645
21.3. Testing the Equality of Variances 651
21.4. Other Tests Using the F Distribution 655
21.5. Analysis of Variance 664
21.6. Fixed Effects, Completely Randomized, 1-Way Classifi-
cation Model 677
21.7. Fixed Effects, Randomized Block, 1-Way Classification
Model 695
21.8. Fixed Effects, Completely Randomized, 2-Way Classifi-
cation, 1 Observation Per Cell Model 711
21.9. Fixed Effects, Completely Randomized, 2-Way Classi-
fication, n Observations Per Cell Model 716
21.10. Fixed Effects, Randomized Blocks, 2-Way Classifica-
tion, n Observations Per Cell 725
21.11. Random Effects, Completely Randomized, 1-Way
Classification Model 732
21.12. Random Effects, Randomized Blocks, 1-Way Classi-
fication Model 737
21.13. Random Effects, Completely Randomized, 2-Way
Classification, 1 Observation Per Cell Model 741
21.14. Random Effects, Completely Randomized, 2-Way
Classification, n Observations Model 743
21.15. Random Effects, Randomized Blocks, 2-Way Classi-
fication, n Observations Model 746
CONTENTS xiii

22. Multiple Linear Regression 752

22.1. Introduction . 753

22.2. Estimation of Parameters 754
22.3. Estimating o-2 757
22.4. Interpretation of the Regression Equation 760
22.5. The Coefficient of Multiple Determination 763
22.6. Partial Correlation 766
22.7. Gauss Multipliers 774
22.8. Example 781
22.9. Tests of Hypotheses of the Regression Coefficients 788
22.10. Summary 793
22.11. Regression Analysis and Analysis of Variance 796
22.12. Addition of Variables 806
22.13. The Durbin-Watson Test 809
22.14. Generalization of the Partial Correlation Coefficient 813
22.15. Graphic Correlation 823
22.16. Multiplicative Forms of Regression Functions 828
22.17. Appendix: Matrix Algebra 835

23. Time Series (II) 845

23.1. The Trend Line 845

23.2. The Moving Average • 860
23.3. Tests of Independence 865
23.4. Stationary Time Series 869
Tables 876
Index 915