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COMPUTER II
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TABLE OF CONTENTS

CHAPTER ONE: COMPUTATION

CHAPTER TWO: BRANCHING AND ITERATION

CHAPTER THREE: STRING MANIPULATION

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CHAPTER ONE
COMPUTATION
ON THE INTERACTIONS OF MATH AND COMPUTATION
The Theory of Computation is the study of the formal foundations of computer
science and technology.

This dynamic and rapidly expanding field straddles mathematics and computer
science. It has benefitted tremendously from the very different characters,
motivations and traditions of these parent disciplines. Both sides naturally
emerged from its birth, in the big bang" of Turing's seminal 1936 paper, On
computable numbers, with an application to the Entscheidungs problem". One
has to remember that this is a paper which was written by a PhD student, in the
area of mathematical logic, that combined with its long title might seem
condemned to obscurity. However, with Turing's incredible clarity of vision,
exposition and motivation, it is an inspiring model in mathematical modeling with
singular impact. This paper formally defined an algorithm in the form of what we
call today the Turing machine". On the one hand, the Turing machine is a formal,
mathematical model of computation, enabling for the first time the rigorous
definition of computational tasks, the algorithms to solve them, and the basic
resources these require (in particular, allowing Turing to prove that very basic
tasks are uncomputable!). On the other hand, the extremely elegant definition of
the Turing machine allowed its simple, logical design to be readily implemented in
hardware and software, igniting the computer revolution.

These theoretical and practical sides form the dual nature of ToC and strongly
influenced the field and its evolution. On the mathematical side, the abstract
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notion of computation revealed itself as an extremely deep and mysterious

notion, which illuminates other, often well studied concepts with a new light. In
pursuing the abstract study of computation ToC progresses like any other
mathematical field. Its researchers prove theorems, and follow mathematical
culture to generalize, simplify and create variations, following their noses based
on esthetics and beauty. From the practical side, the universal applicability of
automated computation fueled the rapid development of computer technology,
which now dominates our life. The interaction between the theory and practice
never stops. The evolving world of computer science and industry continuously
creates new types and properties of computation which need theoretical
modeling and understanding, and directly impacts the mathematical evolution of
ToC, while ideas, models and techniques generated there feed back into the
practical world. Besides technology, a more recent and growing source of external
influence on ToC are nature and science. Many natural processes can (and should)
be understood as information processes, and beg similar computational
understanding. Again here, theoretical modeling, techniques and new theoretical
questions feedback to suggest experiments and better understanding of scientific
data.

Needless to say, mathematics and computation did not meet in 1936 for the _rst
time; they have been tied to each other from the dawn of man. Indeed, ancient
mathematics developed primarily from the need to compute, be it in predictions
of natural phenomena of all types, management of crops and livestock,
manufacturing and building, trading commodities and planning for the future.

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Devising representations of numbers, and efficient methods for performing

arithmetic on them were thus, central. More generally, in a very fundamental
way, a mathematical understanding could solve any practical problem only
through a computational process applied to the data at hand. So, while
algorithms were formally defined only in the 20th century, mathematicians and
scientists continuously devised, described, and used better and better algorithms
(albeit informally explained and rarely analyzed) for the computations required to
draw conclusions from their theories. Examples abound, and we list just a few
highlights. Euclid, working around 300 BCE, devised his fast GCD algorithm to
bypass the need to laboriously factor integers when simplifying fractions. Euclid's
famous 13-volume Elements, the central math text for many centuries, contain
dozens of other algorithms to compute numerical and geometric quantities and
structures. In the same era, Chinese mathematicians compiled The Nine Chapters
on the Mathematical Art, containing many computational methods including
“Gaussian elimination" (for solving systems of linear equations). In the 9th
century al-Khwarizmi (after whom algorithm is named!) wrote his books
Compendious Book on Calculation by Completion and Balancing and On the Hindu
Art of Reckoning. These books respectively exposit everything known till that time
about algorithms for algebraic and arithmetic problems, like solving quadratic
equations and linear systems, and performing arithmetic operations in the
decimal system. It is a crucial observation to make, that the very reason that the
decimal system survived as the dominant way to represent numbers is these
efficient algorithms for performing arithmetic on arbitrarily large numbers so
represented.

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The “modern era" has intensified these connections between math and
computation. Again, there are numerous examples. During the Renaissance,
mathematicians found formulas, the most basic computational recipe, for solving
cubic and quartic equations via radicals2. Indeed, famous competitions between
Tartaglia, Piore, Ferrari and others in the early 1500s were all about who had a
faster algorithm for solving cubic equations. The Abel-Ruffini theorem that the
quantic equation has no such formula is perhaps the earliest hardness result: it
proves the non-existence of an algorithm for a concrete problem, in a precise
computational model. Newton's Principia Mathematica is a masterpiece not only
of grand scientific and mathematical theories; it is also a masterpiece of
algorithms for computing the predictions of these theories. Perhaps the most
famous and most general is “Newton's method" for approximating the roots of
real polynomials of arbitrary degree (practically bypassing the Abel-Ruffini
obstacle above). The same can be said about Gauss' magnum opus, Disquisitiones
Arithmeticae|, it is full of algorithms and computational methods. One famous
example (published after his death), is his discovery of the \fast Fourier
transform" (FFT), the central algorithm of signal processing, some 150 years
before its official" discovery by Cooley and Tukey. Aiming beyond concrete
problems, Leibniz, Babbage, Lovelace and others pioneered explicit attempts to
design, build and program general-purpose computational devices.
Finally, Hilbert dreamed of resting all of mathematics on computational
foundations, seeking a “mechanical procedure" which will (in principle) determine
all mathematical truths. He believed that truth and proof coincide (namely that
every true statement has a valid proof), and that such proofs can be found
automatically by such a computational procedure. The quest to formalize

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Hilbert's program within mathematical logic led directly to the works of Godel,
Church, Post and Turing. Their work shattered Hilbert's dreams (proving them
unattainable), but to do so it gave birth to formal definitions of computation and
algorithms. Once these theoretical foundations were laid, the computer
revolution arrived.

The birth of computer science, and with it, the theory of computation, steadily
enhanced, deepened and diversified the interactions between mathematics and
computation, which in the last few decades have been growing explosively. These
interactions can be roughly divided into four (naturally overlapping) categories.
The first two categories arise from one field using the expertise developed by the
other; these interactions are often mainly one-directional. The next two
categories are more complex and are very much interactive. We will see many of
them in action throughout the book.
 One type of interaction arises from the need of ToC to use general
mathematical techniques and results. Initially these sources were restricted
to areas having a natural affinity with computer science, like logic and
discrete mathematics. However, as ToC developed, getting deeper and
broader, it needed to import techniques and results from diverse
mathematical areas, sometimes quite unexpectedly. Such examples include
the use of analytic and geometric techniques for understanding
approximation algorithms, the use of topological methods for studying
distributed systems, and the use of number theory and algebraic geometry
in constructions of pseudo-random objects.
 The opposite type of interaction is the need of mathematics to use
algorithms (and computers). As mentioned, mathematicians needed
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algorithms and developed them for centuries. But after Turing ToC made
algorithm design into a comprehensive theory, ready to be used and
applied, with general techniques for maintaining and manipulating
information of all types, and methods for comparing the qualities and
analyzing the resources of these algorithms. At the same time, computers
became available. This confluence gave rise to a huge boom in developing
specific algorithms and software for mathematicians in almost every field,
with libraries of computational tools for algebra, topology, group theory,
geometry, statistics and more. On a different front, there is a growing
development and use of computer programs for mathematical proof
verification, as well as proof discovery.
 A deeper, fundamental source of interaction is the vast number of
mathematical theorems which guarantee the existence of some
mathematical object. It is by now a reflexive reaction to wonder: can the
object guaranteed to exist be efficiently found? In many cases, some
mentioned above, there are good practical reasons to seek such
procedures. On a more philosophical level, non-constructive existence
proofs (like Hilbert's first proof of the finite basis theorem, and Cantor's
proof that most real numbers are not algebraic) appalled members of the
mathematics community. Even in finite settings, existence proofs beg
better understanding despite the availability of brute-force (but highly
inefficient) search for the required object. We have mounting evidence, in
diverse areas of math, that even without any direct, practical need or
philosophical desire for such efficient algorithms, seeking them anyway
invariably leads to a deeper understanding of the mathematical _eld at

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hand. This quest raises new questions and uncovers new structures,
sometimes reviving “well-understood" subjects.
 The final source of interaction arises from the fact that the study of
computation surprisingly led to the production of new mathematical
results, theories and problems, which are not algorithmic, but rather
structural in nature. These naturally arise both from the need to analyze
algorithms and to prove hardness results. Thus were born completely new
probabilistic concentration results, geometric incidence theorems,
combinatorial regularity lemmas, isoperimetric inequalities, algebraic
identities, statistical tests and more. These inspired collaboration with
many mathematical areas, which in some cases is already quite established
and in others only budding.

Mathematics and computation are linked in numerous strong bonds. This rich
fabric of interactions manifests itself most strongly within the _eld of
computational complexity.

COMPUTATIONAL COMPLEXITY THEORY

Early decades of research in the Theory of computation have centered on
understanding which computational problems can, and which problems cannot
be solved by algorithms. But it quickly became evident that this dividing line is too
coarse; many problems that can be solved in principle remain intractable, as the
best algorithms to solve them will terminate long after anyone cared or lived to
see the answer. This created a need for a much finer theory that will account for
the performance of different algorithms. Thus was born computational
complexity theory in the 1960s, with the initial charge of understanding e_cient

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computation in the most general sense: what are the minimal amounts of natural
resources, like time, memory, communication and others, needed to solve natural
computational tasks by natural computational models. Responding to this charge,
this theory developed a powerful toolkit of algorithmic techniques and ways to
analyze them, as well as a classification system of computational problems in
complexity classes. These also led to the formulation of natural long-term goals
for the field regarding the power and limits of efficient computation. But this
turned out to be only half of the story, as the resources consumed by algorithms
are only the very basic properties of computation, and the utility of algorithms in
different contexts presented other properties to explore.

With time, and with such a variety internal and external motivations,
computational complexity theory has greatly expanded its goals. It took on the
computational modeling and the understanding of a variety of central notions,
some studied for centuries by great minds, including secret, proof, learning,
knowledge, randomness, interaction, evolution, game, strategy, coordination,
synchrony and others. This computational lens often resulted in completely new
meanings of these old concepts. Moreover, in some of these cases the resulting
theories predated, and indeed enabled, significant technological advances5. In
other cases these theories formed the basis of interactions with other sciences.

Thus, starting with the goal of understanding what can be efficiently computed, a
host of natural long-term goals of deep conceptual meaning emerged. What can
be efficiently learned? What can be efficiently proved? Is verifying a proof much
easier than finding one? What does a machine know? What is the power of
randomness in algorithms? Can we effectively use natural sources of

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randomness? What is the power of quantum mechanical computers? Can we

utilize quantum phenomena in algorithms? In settings where different
computational entities have different (possibly conflicting) incentives, what can
be achieved jointly? Privately? Can computers efficiently simulate nature, or the
brain?

The study of efficient computation has created a powerful methodology with

which to investigate such questions. Here are some of its important principles,
which we will see in action repeatedly, and whose meaning will become clearer,
in the chapters of this book. Computational modeling: uncover the underlying
basic operations, information ow and resources of processes. Efficiency: attempt
to minimize resources used and their trade-offs. Asymptotic thinking: study
problems on larger and larger objects, as structure often reveals itself in the limit.
Adversarial thinking: always prepare for the worst, replacing specific and
structural restrictions by general, computational ones, such more stringent
demands often make things simpler to understand! Classification: organize
problems into (complexity) classes according to the resources they require.
Reductions: ignore ignorance, and even if you can't efficiently solve a problem,
assume that you can, and explore which other problems it would help solve
efficiently. Completeness: identify the most difficult problems in a complexity
class. Barriers: when stuck for a long time on a major question, abstract all known
techniques used for it so far, and try to formally argue that they will not su_ce for
its resolution.

These principles work extremely well with each other, and in surprisingly diverse
settings, especially when applied at the right level of abstraction (which I believe

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was indeed cleverly chosen, repeatedly). This methodology allowed ToC to

uncover hidden connections between different fields, and create a beautiful
edifice of structure, a remarkable order in a vast collection of notions, problems,
models, resources and motivations. While many of these principles are in use
throughout mathematics and science, I believe that the disciplined, systematic
use which has become ingrained in the culture of computational complexity,
especially of problem classification via (appropriate) reductions and
completeness, has a great potential to further enhance other academic fields.

Computational complexity is extremely active and dynamic. While I have

attempted to describe, besides the fundamentals, also some of the most recent
advances in most areas, I expect the state-of-art will continue to expand quickly.
Thus, some of the open problems will become theorems, new research directions
will be created and new open problems will emerge. Indeed, this has happened
repeatedly in the few years it took to write this book.

PRELUDE: COMPUTATION, UNDECIDABILITY AND THE LIMITS OF

MATHEMATICAL KNOWLEDGE
Which mathematical structures can we hope to understand? Consider any
particular class of mathematical objects, and any particular relevant property. We
seek to understand which of the objects have the property and which do not.
Examples of this very general classification problem include the following.
(1) Which Diophantine equations have solutions?
(2) Which knots are unknotted?
(3) Which planar maps are 4-colorable?

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(4) Which theorems are provable in Peano arithmetic?

(5) Which pairs of smooth manifolds are diffeomorphic?
(6) Which elementary statements about the Reals are true?
(7) Which elliptic curves are modular?
(8) Which dynamical systems are chaotic?

A central question is what we mean by understanding. When are we satisfied that

our classification problem has been reasonably solved? Are there problems like
these which we can never solve? A central observation (popularized mainly by
David Hilbert) is that \satisfactory" solutions usually provide (explicitly or
implicitly) \mechanical procedures", which when applied to an object, determine
(in finite time) if it has the property or not. Hilbert's problems (1) and (4) above
were stated, it seems, with the expectation that the answer would be positive,
namely that mathematicians would be able to understand them in this very sense.
7It is not essential that you understand every mathematical notion mentioned
below. If curious, reading a

So, Hilbert identified mathematical knowledge with computational access to

answers, but never formally defined computation. This was taken up by logicians
in the early 20th century, and was met with resounding success in the 1930s. The
breakthrough developments by Godel, Turing, Church, and others led to several,
quite different formal definitions of computation, which happily turned out to be
identical in power. Of all, Turing's 1936 paper was most influential. Indeed, it is
easily the most influential math paper in history. In this extremely readable paper,
Turing gave birth to the discipline of Computer Science, ignited the computer
revolution which radically transformed society, solved Hilbert's problem above,

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and more!8 Turing's model of computation (quickly named a Turing machine),

became one of the greatest intellectual inventions ever. Its elegant and simple
design on the one hand, and its universal power (elucidated and exemplified by
Turing) on the other hand immediately led to implementations, and the rapid
progress since then has forever changed life on Earth. This paper serves as one of
the most powerful demonstrations of how excellent theory predates and enables
remarkable technological and scientific advance.

But back to Hilbert's motivation: finally having a rigorous definition of

computation allowed proving mathematical theorems about the limits of its
power! Turing defined an algorithm (also called a decision procedure) to be a
Turing machine (in modern language, simply a computer program) which halts on
every input in finite time. So, algorithms compute functions, and being finite
objects themselves, one immediately sees from a Cantor-like diagonalization
argument that some (indeed almost all) functions are not computable by
algorithms (such functions are also called undecidable). But Turing went further,
and showed that specific, natural functions, like Hilbert's Entscheidungs problem
(4) above was undecidable (this was independently proved by Church as well).
Turing's elegant 1-page proof adapts a Godelian self-reference argument on a
Turing machine (and as a side bonus a similar argument gives a short proof of
Godel's incompleteness theorem). These demonstrate so powerfully the
mathematical value of Turing's basic computational model. Turing thus shattered
Hilbert's first dream. Problem (4) being undecidable means that we will never
understand in general, in his sense, which theorems are provable (say in Peano
arithmetic); no algorithm can discern provable from unprovable theorems. It took
35 more years to do the same to Hilbert's problem (1). Its undecidability (proved
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by Davis, Putnam, Robinson, and Mattiasevich in 1970) says that we will never
understand in this way polynomial equations over integers; no algorithm can
discern solvable from unsolvable ones.

A crucial ingredient in those (and all other undecidability) results is showing that
each of these mathematical structures (Peano proofs, integer polynomials) can
encode computation" (in particular, these seemingly static objects encode a
dynamic process!). This is known today to hold for many different mathematical
structures in algebra, topology, geometry, analysis, logic, and more, even though
a priori the structures studied seem to be completely unrelated to computation.
This ubiquity makes every mathematician a potential computer scientist in
disguise. We shall return to refined versions of this idea later.

Naturally, such negative results did not stop mathematical work on these
structures and properties| it merely suggested the study of interesting subclasses
of the given objects. Specific classes of Diophantine equations were understood
much better, e.g. Fermat's Last Theorem and the resolution of problem (7)
regarding the modularity of elliptic curves. The same holds for restricted logics for
number theory, e.g. Presburger arithmetic.

The notion of a decision procedure (or algorithm) as a minimal requirement for

understanding a mathematical problem has also led to direct positive results. It
suggests that we should look for a decision procedure as a means, or as the first
step for understanding a problem. With this goal in mind, Haken showed how
knots can be understood in this sense, designing a decision procedure for
problem (2), determining knottedness. Similarly Tarski showed that real-closed
fields can be thus understood, designing a decision procedure for problem (6).

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Naturally, significant mathematical, structural understanding was needed to

develop these algorithms. Haken developed the theory of normal surfaces and
Tarski invented quantifier elimination for their algorithms; in both cases these
ideas and techniques became cornerstones of their respective fields.

These important examples, and many others like them, only underscore what has
been obvious for centuries: mathematical and algorithmic understanding are
strongly related and often go hand in hand, as discussed at length in the
introduction. And what was true in previous centuries is truer in this one: the
language of algorithms is compatible with and actually generalizes the language
of equations and formulas (which are special cases of algorithms), and is a
powerful language for understanding and explaining complex mathematical
structures.

The many decision procedures developed for basic mathematical classification

problems, such as Haken's and Tarski's solutions to problems (2) and (6)
respectively, demonstrate this notion of algorithmic understanding in principle.
After all, what they guarantee is an algorithm that will deliver the correct solution
in finite time. Should this satisfy us? Finite time can be very long, and it is very
hard to distinguish a billion years from infinity. This is not just an abstract
question. Both Haken's and Tarski's original algorithms were extremely slow, and
computing their answer for objects of moderate size may indeed have required a
billion years.

This viewpoint suggests using a computational yardstick, and measuring the

quality of understanding by the quality of the algorithms providing it. Indeed, we
argue that better mathematical understanding of given mathematical structures

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often goes hand in hand with better algorithms for classifying their properties.
Formalizing the notions of algorithms' efficiency is the business of computational
complexity theory, the subject of this book, which we shall start developing in the
next section. But before we do, I would like to use the set of problems above to
highlight a few other issues, which we will not develop further here.

One basic issue raised by most of the problems above is the contrast between
continuity in mathematics and discreteness of computation. Algorithms
manipulate finite objects (like bits) in discrete time steps. Knots, manifolds,
dynamical systems, etc. are continuous objects. How can they be described to an
algorithm and processed by it? As many readers would know, the answers vary,
but finite descriptions exist for all. For example, we use knot diagrams for knots,
triangulations for manifolds, symbolic description or successive approximations
for dynamical systems etc. It is these discrete representations that are indeed
used in algorithms for these (and other) continuous problems (as e.g. Haken's
algorithm demonstrates). Observe that this has to be the case; every continuous
object we humans will ever consider has discrete representations! After all, Math
textbooks and papers are finite sequences of characters from a finite alphabet,
just like the input to Turing machines. And their readers, us, would never be able
to process and discuss them otherwise. All this does not belittle the difficulties
which may arise when seeking representations of continuous mathematical
structures that would be useful for description, processing and discussion, it
rather further illustrates the inevitable ties of mathematics and computation. Let
me note that this issue is crucial even for representing simple discrete structures.
Consider where mathematics would be if we continued using unary encodings of
integers, and observe that the great invention of the decimal encoding (or more
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generally the positional number system) was motivated by, and came equipped
with efficient algorithms for arithmetic manipulation!

Problem (3) on the 4-colorability of planar maps points to a different aspect of the
interaction of computation in mathematics. Many readers will know that problem
(3) has a very simple decision procedure: answer `yes' on every input. The
correctness of this trivial algorithm is guaranteed by the highly non-trivial proof of
the 4-color theorem of Appel and Haken. This theorem states that in every planar
map (as the ones used in Geography texts, and Figure 2), each region can be
colored from a set of 4 colors (e.g. Red, Blue, Green, Yellow) so that no two
regions sharing a border get the same color. This mathematical proof was the first
to use a computer program as an essential tool to check that an enormously large
but finite number of finite graphs is indeed 4-colorable. This proof naturally raised
numerous discussions and arguments on the value of such proofs; discussions
which only intensified with time, as more and more proofs use computers in a
similar way (another famous example is Hales' proof of the Kepler conjecture). I
leave it to the reader to contemplate the relative merits of computer vs. human
generated proofs (and the task of distinguishing the two). Another point to make
is that problem (3) may seem to some very different from the rest; all are well
known “deep" problems of mathematics, whereas (3) seems “recreational".
Indeed in the 20th century it was quite popular in mathematics to call such
problems “trivial" even without knowing the 4-color theorem, simply by virtue of
the fact that a trivial brute-force algorithm which tries all (finitely many) possible
colorings could determine the answer. This again brings us right back into the
quality of algorithms we start explaining next; you may revisit the task of
distinguishing “deep" and \trivial" problems.
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COMPUTATIONAL COMPLEXITY 101: THE BASICS

In this section, we shall develop the basic notions of data representation, efficient
computations, efficient reductions between problems, efficient verification of
proofs, the classes P, NP, and coNP, and the notion of NP-complete problems. We
will focus on classification (or decision) problems; other types of problems, and
classes, (enumeration, approximation, construction, etc.) are studied as well, and
some will be discussed later in the book.

When studying efficiency, we will focus on time as the primary resource of

algorithms. By “time" we mean the number of elementary operations10
performed. Other resources of algorithms, such as memory, parallelism,
communication, randomness and more are studied in computational complexity,
and some will be treated later in the book.

MOTIVATING EXAMPLES
Let us consider the following three classification problems. As in the previous
chapter, for each classification (or decision) problem like these, we get a
description of an object, and have to decide if it has the desired property or not.
(1’) Which Diophantine equations of the form Ax2 + By + C = 0 are solvable by
positive integers?
(2’) Which knots on 3-dimensional manifolds bound a surface of genus _ g?
(3’) Which planar maps are 3-colorable?

Problem (1’) is a restriction of problem (1’) above. Problem (1’) was undecidable,
and it is natural to try to better understand more restricted classes of Diophantine
equations. Problem (2’) is a generalization of problem (2’) above in two ways: the

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unknotting problem (2’) considers the special case of the manifold R3 and genus g
= 0. Problem (2’) was decidable, and so we may want to understand if its
generalization (2’) is decidable as well. Problem (3’) is an interesting variant of
problem (3’). While every map has a 4-coloring, not every map has a 3-coloring;
some do and some don't, and so this is another nontrivial classification problem
to understand.

Most mathematicians would tend to agree that these three problems have
absolutely nothing to do with each other. They are each from very different fields-
algebra, topology, and combinatorics, respectively - each with its completely
different notions, goals and tools. However, the theorem below suggests that this
view may be wrong.

Theorem 3.1. Problems (1’) , (2’) and (3’) are equivalent.

Moreover, the equivalence notion is natural and completely formal. Intuitively,

any understanding we have of one problem, can be simply translated into a
similar understanding of the other. The formal meaning of this equivalence will
unfold and be formalized. To get there, we need to develop the language and
machinery which yield such surprising results.

We start with explaining (informally and by example) how such varied complex
mathematical objects can be described in finite terms, eventually as a sequence
of bits. Often there are several alternative representations, and typically it is
simple to convert one to the other. Let us discuss the representation of inputs in
these three problems.

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For problem (1’) consider first the set of all equations of the form Ax2 + By + C = 0
with integer coefficients A, B, C. A finite representation of such equation is
obvious - the triple of coefficients (A, B, C), say with each integer written in binary
notation. Given such a triple, the decision problem is whether the corresponding
polynomial has a positive integer root (x; y). Let 2DIO denote the subset of triples
for which the answer is YES.

Finite representation of inputs to problem (20) is tricky, but still natural. The
inputs consist of a 3-dimensional manifold M, a knot K embedded on it, and an
integer G. A finite representation can describe M by a triangulation (a finite
collection of tetrahedra and their adjacencies). The knot K will be described as a
closed path along edges of the given tetrahedra. Given a triple (M, K, G), the
decision problem is whether a surface that K bounds has genus at most G. Let
KNOT denote the subset for which the answer is YES.

Finite representation of inputs to problem (30) is nontrivial as well. Let us discuss

not maps but rather graphs, in which vertices represent the countries and edges
represent adjacency of countries (this view is equivalent; for a planar map, its
graph is simply its dual map). To describe a graph (in a way which makes its
planarity evident), one elegant possibility is to use a simple and beautiful theorem
of Fary (discovered independently by others, and which has many proofs). It
states that every planar graph has a straight line embedding in the plane (with no
edges crossing). So, the input can be a set V of coordinates of the vertices (which
can in fact be small integers), and a set E of edges, each a pair of elements from V.
Let 3COL be the subset of those inputs (V, E) describing a 3-colorable map.

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Any finite object (integers, tuples of integers, finite graphs, finite complexes, etc.)
can be represented naturally by binary sequences, over the alphabet f0; 1g, and
this is how they will be described as inputs to algorithms. As discussed above,
even continuous objects like knots have finite description and so can be described
this way as well. We will not discuss here subtle issues like whether objects have
unique representations, or whether every binary sequence should represent a
legal object, etc. It suffices to say (for the discussion level we aim at), that in most
natural problems this encoding of inputs can be chosen such that these are not
real issues, and moreover going back and forth between the object and its binary
representation is simple and efficient (a notion to be formally defined below).

Consequently, we let I denote the set of all finite binary sequences, and regard it
as the set of inputs to all our classification problems. In this language, given a
binary sequence x Ɛ I we may interpret it as a triple of integers (A, B, C) and ask if
the related equation is in 2DIO. This is problem (1’). We can also interpret x as a
triple (M, K, G) of manifold, knot and integer, and ask if it is in the set KNOT. This
is problem (2’), and the same can be done with (3’).

Theorem 3.1 states that there are simple translations (in both directions)
between solving problem (1’) and problem (2’). More precisely, it provides
efficiently computable functions f, h: I I performing these translations:
(A, B, C) Ɛ 2DIO iff f(A, B, C) Ɛ KNOT,
and
(M, K, G) Ɛ KNOT iff h(M, K, G) Ɛ 2DIO.
Thus, an efficient algorithm to solve one of these problems immediately implies a
similar one for the other. Putting it more dramatically, if we have gained enough

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understanding of topology to solve e.g. the knot genus problem, it means that we
automatically have gained enough number theoretic understanding for solving
these quadratic Diophantine problems (and vice versa!).

The translating functions f and h are called reductions. We capture the simplicity
of a reduction in computational terms, demanding that it will be efficiently
computable.

Similar pairs of reductions exist between the map 3-coloring problem and each of
the other two problems. If sufficient understanding of graph theory leads to an
efficient algorithm to determine if a given planar map is 3-colorable, similar
algorithms follow for both KNOT and 2DIO. And vice versa - understanding any of
them will similarly resolve 3-coloring. Note that this positive interpretation of this
equivalence paints all three problems as equally \accessible". But the flip side says
that they are also equally \intractable", as if any one of them lacks such an
efficient classification algorithm, so do the other two! Indeed, with the better
understanding of these equivalences today it seems more likely that the second
interpretation is right: these problems are all hard-to-understand.

When teaching this material in class, or in lectures to unsuspecting audiences, it is

always fun to watch listeners' amazement at these remarkably strong unexpected
connections between such remote problems. I hope it had a similar impact on
you. But then comes the time to dispel the mystery, and explain the source of
these connections. Here we go.

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EFFICIENT COMPUTATION AND THE CLASS P

Efficient algorithms are the engine which drive an ever growing part of industry
and economy and with it your everyday life. These jewels are embedded in most
devices and applications you use daily. In this section we abstract a mathematical
notion of efficient computation, polynomial-time algorithms. We motivate it and
give examples of such algorithms.

In all that follows, we focus on asymptotic complexity. Thus e.g. we care neither
about the time it takes to factor the number 267 - 1 (as much as Mersenne cared
about it), nor about the time it takes to factor all 67-bit numbers, but rather
about the asymptotic behavior of factoring n-bit numbers, as a function of the
input length n. The asymptotic viewpoint is inherent to computational complexity
theory, and we shall see in this book that it reveals structure which would be
obscured by finite, precise analysis. We note that the dependence on input size
does not exist in Computability theory, where algorithms are simply required to
halt in finite time. However, much of the methodology of these fields was
imported to computational complexity theory - complexity classes of problems,
reductions between problems and complete problems, all of which we shall meet.

Efficient computation (for a given problem) will be taken to be one whose

runtime on any input of length n is bounded by a polynomial function in n. Let In
denote all binary sequences in I of length n, namely In = {0, 1}n.

Definition: (The class P). A function f : I I is in the class P if there is an

algorithm computing f and positive constants A, c, such that for every n and every
x Ɛ In the algorithm computes f(x) in at most Anc steps (namely, elementary
operations).
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Note that the definition applies in particular to Boolean functions (whose output
is {0, 1g}) which capture classification problems (often called “decision
problems"). We will abuse notation and sometimes think of P as the class
containing only these classification problems. Observe that a function with a long
output can be viewed as a sequence of Boolean functions, one for each output
bit.

This definition was suggested by Cobham, Edmonds and Rabin all attempting to
formally delineate efficient from just finite (in their cases, exponential time)
algorithms. Of course, nontrivial polynomial-time algorithms were discovered
earlier, long before the computer age. Many were discovered by mathematicians,
who needed efficient methods to calculate (by hand). The most ancient and
famous example is of course Euclid's GCD (greatest common divisor) algorithm
mentioned earlier, which was invented to bypass the need to factor integers
when computing their common factor.

There are two major choices made in selecting P to model the class of efficiently
computable functions, which are often debated and certainly demand
explanation. One is the choice of polynomial as the bound on time in terms of
input length, and the second is the choice of worst case requirement, namely that
this time bound holds for all inputs. We discuss the motivation and importance of
these two choices below. However, it is important to stress that these are not
dogmatic: computational complexity has considered and investigated numerous
other alternatives to these choices, e.g. many finer grained bounds on efficiency
other than polynomial, as well as many different notions of average case and
input dependent measures replacing the worst-case demands. Some of them will

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be discussed later in the book. Still, these choices were extremely important for
the early days of computational complexity, revealing beautiful structure that will
become solid foundation for the field and enable the later study finer and more
diverse alternatives.

Why polynomial? The choice of polynomial time to represent efficient

computation seems arbitrary. However, this particular choice has justified itself
over time from many points of view. We list some important ones.

Polynomials typify “slowly growing" functions. The closure of polynomials under

addition, multiplication and composition preserves the notion of e_ciency under
natural programming practices, such as using two programs in sequence, or using
one as a subroutine of another. This choice removes the necessity to describe the
computational model precisely (e.g. it does not matter if we allow arithmetic
operations only on single digits or on arbitrary integers, since long addition,
subtraction, multiplication and division have simple polynomial-time algorithms
taught in grade school). Similarly, we need not worry about data representation:
one can efficiently translate between essentially any two natural representations
of a set of finite objects.

From a practical viewpoint, a running time of, say, n2 is far more desirable than
n100, and of course linear time is even better. Indeed even the constant coe_cient
of the polynomial running time can be crucial for real-life feasibility of an
algorithm. However, there seems to be a “law of small numbers" at work, in that
very few known polynomial-time algorithms for natural problems have exponents
above 3 or 4 (even though at discovery the initial exponent may have been 30 or
40). On the other hand, many important natural problems which so far resist any

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efficient algorithms, cannot at present be solved faster than in exponential time

(which of course is totally impractical even for small input data). This exponential
gap gives great motivation for the definition of P; reducing the complexity of such
problems from exponential to (any) polynomial will be a huge conceptual
improvement, likely involving new techniques.

Why worst-case? Another criticism of the definition of the class P is that a

problem is deemed efficiently solvable if every input of length n can be solved in
poly (n)-time. From a practical standpoint, it would suffice that the instances we
care about (e.g. those generated by our application, be it industry or nature) be
solved quickly by our algorithms, and the rest can take a long time. Perhaps it
suffices that “typical" instances be solved quickly. Of course, understanding what
instances arise in practice is a great problem in itself, and a variety of models of
typical behavior and algorithms for them are studied (and we shall mention this
later). The clear advantage of “worst-case" analysis is that we don't have to worry
about which instances arise - they will all be solved quickly by what we call an
efficient algorithm. This notion composes well, when one algorithm is using
another. Moreover, it accounts for adversarial situation, where an input (or more
generally, external behavior) is generated by an unknown opponent who wishes
to slow down the algorithm (or system) - modeling such adversaries is crucial in
such fields as cryptography and error correction, and is facilitated by worst-case
analysis. Finally, as mentioned, this notion turned out to reveal a very elegant
structure of the complexity universe, which inspired the more refined study of
average-case and instance-specific theories.

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Understanding the class P is central. There are numerous computational problems

that arise (in theory and practice) which demand efficient solutions. Many
algorithmic techniques were developed in the past four decades and enable
solving many of these problems. These drive the ultra-fast home computer
applications we now take for granted like web searching, spell checking, data
processing, computer game graphics, and fast arithmetic, as well as heavier duty
programs used across industry, business, math, and science. But many more
problems yet (some of which we shall meet soon), perhaps of higher practical and
theoretical value, remain elusive. The challenge of characterizing this
fundamental mathematical object - the class P of efficiently solvable problems - is
far beyond us at this point.

We end this section with some examples of nontrivial problems in P of

mathematical significance from diverse areas. In each, the interplay between
mathematical and computational understanding needed for the development of
these algorithms is evident. Most examples are elementary in nature, but ff some
mathematical notion is unfamiliar, feel free to ignore that example or possibly
better, look up its meaning.

Some problems in P
 Perfect Matching. Given a graph, test if it has a perfect matching, namely a
pairing of all its vertices such that every pair is an edge of the graph. The
ingenious algorithm of Edmonds is probably the first non-trivial algorithm in
P, and as mentioned above, this paper was central to highlighting P as an
important class to study. The structure of matchings in graphs is one of the
most well-studied subject in combinatorics.

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 Primality testing. Given an integer, determine if it is prime. Gauss literally

appealed to the mathematical community to find an efficient algorithm, but
it took two centuries to resolve. The story of this recent achievement of
Agrawal, Kayal and Saxena and its history is beautifully recounted by
Granville. Of course, there is no need to elaborate on how central prime
numbers are in mathematics (and even popular culture).
 Planarity testing. Given a graph, determine if it is planar, namely if it can it
be embedded in the plane without any edges crossing (try to determine
this for the graphs. A sequence of linear time algorithms for this basic
problem was discovered, starting with the paper of Hopcroft and Tarjan.
 Linear programming. Given a set of linear inequalities in many variables,
determine if they are mutually consistent, namely, there are real values to
the variables satisfying all inequalities (a small example is in Figure 4). This
problem, and its optimization version, is enormously useful in applications.
It captures many other problems, e.g. finding optimal strategies of zero-
sum games. The convex optimization techniques used to give the efficient
algorithms for it actually do much more.
 Factoring polynomials. Given a multivariate polynomial with rational
coefficients, find its irreducible factors over Q. The tools developed by
Lenstra, Lenstra and Lovasz (mainly regarding \short" bases in lattices in Rn)
have many other applications.
 Hereditary graph properties. Given a finite graph, test if it is a member of
some fixed minor-closed family. A polynomial-time algorithm (which has a
huge exponent in general) follows Robertson and Seymour's monumental
structure theory of such families, including a finite basis theorem.

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 Permutation group membership. Given a list of permutations on n

elements, can the first one be generated by the rest? The “non-
commutative Gaussian elimination" techniques developed, started off a
development of algorithmic group theory, of extensive use by group
theorists, and which in particular lead to the breakthrough on testing graph
isomorphism.
 Hyperbolic word problem. Given any presentation of a hyperbolic group by
generators and relations, and a word w in the generators, check whether w
represents the identity element.

Gromov's geometric techniques, including isoperimetric bounds on the Cayley

graphs of such groups, allow a polynomial-time algorithm (and more). Note that
for general finitely presented groups, this problem is undecidable.

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CHAPTER TWO
BRANCHING AND ITERATION
The C language provides three types of decision-making constructs: if-else, the
conditional expression?:, and the switch statement. It also provides three looping
constructs: while, do-while, and for. And it has the infamous goto, which is
capable of both non-conditional branching and looping.

IF-ELSE

The basic if statement tests a conditional expression and, if it is non-zero (i.e.,

TRUE), executes the subsequent statement. For example, in this code segment

if (a < b)
b = a;

the assignment b = a will only occur if a is less-than b. The else statement deals
with the alternative case where the conditional expression is 0 (i.e., FALSE).

if (a < b)
b = a;
else
b += 7;

The if-else statement can also command multiple statements by wrapping them
in braces. Statements so grouped are called a compound statement, or block, and
they are syntactically equivalent to a single statement.

if (a < b) {
b = a;
a *= 2;
}
else {
b += 7;
--a;

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It is possible to chain if-else statements if the following form

if (expression)
statement;
else if (expression)
statement;
else if (expression)
statement;
else
statement;

This chain is evaluated from the top and, if a particular if-conditional is TRUE, then
its statement is executed and the chain is terminated. On the other hand, if the
conditional is FALSE, the next if-conditional is tested. If all the conditionals
evaluate to FALSE, then the final else statement is executed as a default. (Note,
the final else is optional and, if it is missing, the default action is no action.)

An example if-else chain is shown below. This code segment performs integer
division on the first k elements of an array of integers num[SIZE]. The first two if-
statements do error-checking,1 and the final else does the actual calculation.
Notice that the else is a compound statement, and that a variable (int i) is
declared there; variables may be declared at the top of any block, and their scope
is local to that block.

if (k < 0 || k > SIZE)

printf("Error: Invalid number of elements (out-of-bounds).\n");
else if (denom == 0)
printf("Error: Denominator is zero.\n");
else {
int i;
printf("Result of division by %d: ", denom);
for (i = 0; i < k; ++i)
printf("%d ", num[i]/denom);
printf("\n");
}

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Note. A common mistake with if-else blocks is the “dangling else problem”. For
example, consider the following nested-if statement.

if (a < b)
if (m != 0)
b = a;
else
a = m;

The intention of the programmer, as indicated by the indentation, is that the else
corresponds to the outer if statement. However, it actually belongs to the inner if
statement. Desired association can be enforced by brackets.

if (a < b) {
if (m != 0)
b = a;
}
else
a = m;

?: CONDITIONAL EXPRESSION
The conditional expression is a ternary operator; that is, it takes three operands.
It has the following form

(expression 1) ? (expression 2) : (expression 3)

If the first expression is TRUE (i.e., non-zero), the second expression is evaluated,
otherwise the third is evaluated. Thus, the result of the ternary expression will be
the result of either the second or third expressions, respectively. For example, to
calculate the maximum of two values

c = (a > b) ? a : b; /* c = max(a,b) */

As a branching construct, the ?: operator appears far less frequently than the if-
else and switch constructs.

SWITCH
The switch statement is a multi-way decision that tests whether an expression
matches one of a number of constant integer values, and branches.

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The general form of the switch statement is as follows:

switch (expression) {
case const-int-expr: statements
case const-int-expr: statements
default: statements
}

On evaluating the expression, if it matches one of the set of constant integer

expressions, the switch branches to the matching case label and executes the
statements following that point. Otherwise it jumps to the default label and
executes its statements. The default label is optional, and if it does not exist, and
none of the case labels match, the switch simply performs no action.

Note. The default label is typically the last label in the block. While this is good
practice in general, it is not mandatory, and case labels may appear below
default.

The statements following a case label are executed until terminated by a break
statement, which causes an immediate exit from the switch block. However, if a
break is not encountered, execution will flow on through to the next cases until
the end of the block.2 This is termed fall through and is the default behaviour in a
switch. Fall through is rarely used because it is difficult to code correctly; it should
be used with caution.

Style Note: It is generally good practice to have a default label even when it is not
necessary, even if it just contains an assert to catch logical errors (i.e., program
bugs). Also, fall-through is much less common than break, and every case label
should either end with a break or have a /* Fall Through */ comment to make
ones intentions explicit. Finally, it is wise to put a break after the last case in the
block, even though it is not logically necessary. Some day additional cases might
be added to the end and this practice will prevent unexpected bugs.

It is worth mentioning here that all the control structures—if-else, ?:, while, do-
while, and for—can be nested, which means that they can exist within other
control statements. The switchstatement is no exception, and the statements
following a case label may include a switch or other control structure. For
example, the following code-structure is legitimate.

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if (expression)
while (expression)
switch(integer expression) {
case A1:
switch(integer expression) {
case B1: statements
case B2: statements
case B3: statements
}
case A2: statements
default: statements
}

The following example converts the value of a double variable angle to

normalized radians (i.e., −π ≤ angle ≤ π). The original angle representation is
either degrees or radians, as indicated by the integer angletype, and DEG, RAD,
and PI are symbolic constants.

switch (angletype)
{
case DEG:
angle *= PI / 180.0; /* convert to radians */
/* fall through */
case RAD:
while (angle > PI) /* normalise radians */
angle -= 2.0*PI;
while (angle < -PI)
angle += 2.0*PI;
break;
default:
printf("Error: Invalid type\n");
break;
}

WHILE LOOPS
The while loop has the general form

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while (expression)
statement;

If the conditional expression is TRUE, then the while will execute the following
statement, after which it will reevaluate the conditional. It continues this iteration
while ever the conditional remains TRUE. As with the if-else statement, the while
loop can execute multiple statements as a block by enclosing them in braces.

For example, the following code segment computes the greatest common divisor
(GCD) of two positive integers m and n (i.e., the maximum value that will divide
both m and n). The loop iterates until the value of n becomes 0, at which point
the GCD is the value of m.

while (n) {
int tmp = n;
n = m%n;
m = tmp;
}

DO-WHILE LOOPS
The do-while loop has the general form

do
statement;
while (expression);

Its behaviour is virtually the same as the while loop except that it always executes
the statement at least once. The statement is executed first and then the
conditional expression is evaluated to decide upon further iteration. Thus, the
body of a while loop is executed zero or more times, and the body of a do-while
loop is executed one or more times.

Style note: It is good form to always put braces around the do-while body, even
when it consists of only one statement. This prevents the while part from being
mistaken for the beginning of a while loop.

The following code example takes a non-negative integer val and prints it in
reverse order. The use of a do-while means that 0 can be printed without needing
extra special-case code.

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do
{
printf("%d", val % 10);
val /= 10;
} while (val != 0);

FOR LOOPS
The for loop has the general form
for (expr1; expr2; expr3)
statement;

Its behaviour is equivalent to a while loop with the following arrangement of

expressions.

expr1;
while (expr2) {
statement;
expr3;
}

In the ‘for loop’ expressions 1, 2, and 3 are optional, although the semicolons
must remain. If expressions 1 or 3 are not there, then the loop simple behaves
like the while loop above without expressions 1 or 3. If expression 2 is omitted,
then the conditional is always TRUE, and an infinite loop results

for (;;) /* infinite loop */

statement;

Note. It is possible to stack several expressions in the various parts of the for loop
using the comma operator. The comma operator enables multiple statements to
appear as a single statement without having to enclose them with braces.
However, it should be used sparingly, and is most suited for situations like the
following example. This example reverses a character string in-place. The first
loop finds the end of the string, and the second loop performs the reversing
operation by swapping characters.

for (j=0; str[j] != ’\0’; ++j);

for (i=0, --j; i < j; ++i, --j) {
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tmp = str[i];
str[i] = str[j];
str[j] = tmp;
}

BREAK AND CONTINUE

As seen previously, break can be used to branch out of a switch-statement. It may
also be used to branch out of any of the iterative constructs. Thus, a break may be
used to terminate the execution of a switch, while, do-while, or for. It is important
to realize that a break will only branch out of an inner-most enclosing block, and
transfers program-flow to the first statement following the block. For example,
consider a nested while-loop,

while (expression) {
while (expression) {
if (expression)
break;
statements
}
statements
}

Here, the break will terminate the inner while-loop and proceed to execute the
statements of the outer while-loop.

This next example shows a fast technique for finding the smallest element in an
array of length SIZE. A break is used to terminate the infinite outer while-loop.

i = SIZE;
temp = smallest = array[0];
while (1) {
while (array[--i] > smallest);
if (i == 0) break;
array[0] = smallest = array[i];
}
array[0] = temp;

The continue-statement operates on loops only; it does not operate on switch.

For while and do-while it causes transfer of program-control immediately to the
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conditional test, which is reevaluated for the next iteration. The same action
occurs for a for-loop after first executing the increment expression (i.e.,
expression 3). Note that, as with break, continue acts on the inner-most enclosing
block of a nested loop.

The continue statement is often used when the part of the loop that follows is
complicated, so that reversing a test and indenting another level would nest the
program too deeply.

The following example shows the outline of a code-segment that performs

operations on the positive elements of an array but skips the negative elements.
The continue provides a concise means for ignoring the negative values

for (i = 0; i<SIZE ; ++i) {

if (array[i] < 0) /* skip -ve elements */
continue;
/* process +ve elements */
}

Note. Both break and continue have no effect on an if-statement. A common

misconception is that break can be used to jump out of an if compound
statement. For example, given a nested construct of the form,

while (expression) {
statements
if (expression) {
statements
if (expression)
break;
statements
}
statements after if
}
statements after loop

it is commonly presumed that the break will transfer control to the statements
after if, whereas it will actually transfer control to the statements after loop.

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GOTO
The goto statement has a well-deserved reputation for being able to produce
unreadable “spaghetti” code. It is almost never necessary to use one, and they
should be avoided in general. However, on rare occasions they are convenient
and safe. A goto statement provides the ability to jump to a named-label
anywhere within the same function.

One situation where a goto can be useful is if it becomes necessary to break out
of a deeply nested structure, such as nested loops. A break statement cannot do
this as it can only break out of one level at a time. The following example gives
the basic idea.

1 #include <stdio.h> /* for printf() */

2 #include <stdlib.h> /* for rand() */
3 #include <string.h> /* for memset() */
4
5 #define SIZE 1000
6 enum { VAL1=’a’, VAL2=’b’, VAL3=’Z’ };
8 int main(void)
9 /* Demonstrate a legitimate use of goto (adapted from K&R page 66). This
example is contrived, but the idea is to
10 * find a common element in two arrays. In the process, we demonstrate a
couple of useful standard library functions. */
11 {
12 char a[SIZE], b[SIZE];
13 int i, j;
14
15 /* Initialise arrays so they are different from each other */
16 memset(a, VAL1, SIZE);
17 memset(b, VAL2, SIZE);
18
19 /* Set a random element in each array to VALUE */
20 a[rand()%SIZE] = VAL3;
21 b[rand()%SIZE] = VAL3;
22
23 /* Search for location of common elements */
24 for (i=0; i<SIZE; ++i)
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25 for (j=0; j<SIZE; ++j)

26 if (a[i] == b[j])
27 goto found;
28
29 /* Error: match not found */
30 printf("Did not find any common elements!!\n");
31 return 0;
32
33 found: /* Results on success */
34 printf("a[%d] = %c and b[%d] = %c\n", i, a[i], j, b[j]);
35 }

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CHAPTER THREE
STRING MANIPULATION
WHAT IS A STRING?
 A String is a data type in the Python programming language
 A String can be described as a "sequence of characters"
 Characters are arranged in a particular position in a String.
For example:
word1 ="hello"
 In this String the character 'h' is the first character in the String, followed by
'e', etc. The following String contains the same characters but they are
arranged in a different position:

word2 = "loleh"

STRING INDEXING
INDEXING
 A way to analyze a string is to use “indexing” notation
 Indexing is a way to reference individual elements within a string based on
their position
 You can create an index by placing an integer value inside a pair of square
brackets after your string variable.

word = “superman”
print (word[0])
>> s
 Indexes always start with zero. The first character in a string is considered
the “0th” element in the string.
 The index of last character in a string is equal to the length of the string - 1

# Superman
# 01234567
word = "Superman”
print (len(word))
print (word[0])

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>> 8
>> S
INDEX EXCEPTIONS
 You will raise an exception if you attempt to access an index of a string that
does not exist. For example:

word = "Superman”
print (word[10])
# error! index 10 doesn’t exist on word

ITERATING OVER A STRING USING INDEXING

 You can use a "for" loop to iterate over the characters in a String, like this:

word = "hello"
for c in word:
print (c)
 However, if you want to iterate over the String using indexing you will need
to generate a range of numbers that correlate to the indexes you wish to
visit. For example:

word = "hello"
for i in range(0, 5):
print (word[i])
 Most times we won't know how long a String is when we begin to examine
it.
 We can easily count the # of characters in a String using the len() function
though. For example:

word = "hello"
for i in range(0, len(word)):
print (word[i])

PROGRAMING CHALLENGE
 Write a program to count the # of “S” characters in the following String.
 Use String indexing to examine each character. "Superman sings in the
shower."

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 Given the String: "Superman sings in the shower."

 Write a program that prints out the String in reverse order
 Given the String: "Superman sings in the shower."
 Write a program that examines every other character ("S", "p", "r", etc.)

NEGATIVE INDEXING
 You can use negative integers to identify character positions relative to the
end of the string

Example:
word = "Superman”
print (word[-1], word[-2],
word[-3])
>> n a m
String Immutability
STRING IMMUTABILITY
Strings are “Immutable”
 Strings are an immutable data type. This means that they cannot be
changed once they are created.
 This may seem counter intuitive, since we have been doing the following
since the beginning of the semester:

word = “superman”
print (“word is”, word)
word = “wonder woman”
print (“word is now”, word)
>> word is superman
>> word is now wonder woman

 What actually happens “under the hood” is that Python creates a separate
string in your computer’s memory and “points” to that string instead of the
original one.
name ‘superman’
name superman
wonder woman

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 This means that you cannot change the individual characters within a string
using index notation. You will raise an exception if you attempt to do so.

word = "Superman”
word[0] = "X”
# exception!
CHANGING A STRING
 In order to make changes to a String you will need to create a new String
variable
 This new variable can then hold the changed version of the String
For example, consider this programming challenge:
"Write a program that replaces all vowels in a String with the underscore
character"
 At first glance, you could assume that you could simply use String indexing
to change the characters in question. For example:

word = "hello"
word[1] = "_"
word[4] = "_"
 But because Strings are immutable this won't work!
 Instead, we can use a new String variable to hold our changes and then use
a loop to examine each character in sequence to "build" the new String. For
example:

word = "hello"
newword = ""
for c in word:
if c == 'e' or c == 'o':
newword += "_"
else:
newword += c

 Write a function that accepts three arguments – a string, a character to

search for and a replacement character
 Have your function search the string for all occurrences of that character
and perform the replacement
 Return the new String

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VOWEL COUNTER
 Write a new function that counts the #’s of vowels in a string (A,E,I,O,U)
 Use your character counter function to implement your new function
Programming Challenge: Pig Latin Translator
 Write a program that asks the user for a word
 Translate their word into Pig Latin. A Pig Latin word can be generated using
the following rules:
 Remove the first letter of the word
 Place the first letter of the word at the end of the word\
 Add the string ”ay” to the end of the word
The ASCII Table & Strings
GETTING THE ASCII VALUE OF A CHARACTER
 Remember that Python (and all programming languages) use the standard
ASCII encoding system to organize individual characters
 You can use the ord() function to look up the ASCII value of a character by
doing the following:

value = ord(“A”)
>> 65
 The ord() function accepts one argument – a single character- and returns
an integer that represents the ASCII value of that character

PROGRAMMING CHALLENGE
 Write a program that asks the user for a string
 Print the string, character by character, along with its associated ASCII value

Example:

give me a name: craig

>> c = 99
>> r = 114
>> a = 97
>> i = 105
>> g = 103

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CREATING STRINGS FROM THEIR ASCII CODES

 The ord() function turns a single character into its equivalent ASCII integer
code
 You can also reverse the process and turn an integer into its equivalent
letter value using the chr() function

Example:
x = chr(65)
print (x)
>> A

PROGRAMMING CHALLENGE
 Write a program that generates a random password for the user
 Passwords should follow these rules:
 Be at least 10 characters long
 Contain a mixture of uppercase letters, lowercase letters and numbers

STRING FUNCTIONS
 We already know a few functions that can be used in conjunction with
Strings
For example, the len() function can be used to count the # of characters in a String
 As you can imagine, there are other functions that you can use when
working with Strings to make things easier for you as a programmer!

GETTING THE LARGEST AND SMALLEST CHARACTER IN A STRING

 You can use two built in Python functions to obtain the maximum and
minimum characters in a string (based on their ASCII codes) – Example:

a = max(“python”)
b = min(“python”)
print (“max:”, a)
print (“min:”, b)
>> y
>> h

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PROGRAMMING CHALLENGE
 Write a program to find the letter that is closest to the end of the alphabet
in the following Strings.

zelda
peach
apple
 Then find the letter that is closest to the beginning of the alphabet.
 Write a program to find the letter that is closest to the end of the alphabet
in the following Strings.

Don’t use the max function!

zelda
peach
apple
 Then find the letter that is closest to the beginning of the alphabet.

Don’t use the min function!

SLICING A STRING
 Sometimes you may find it necessary to extract a portion of a string from
another string.
 You can use “slicing” notation in Python to extract a span of characters
from a string into a new string. We call this new String a "substring". For
example:

full_name =“John Smith”

first_name = full_name[0:4]
print (first_name)
>> John

STRING SLICING NOTATION

 When you ask Python to slice a string you need to use bracket notation to
specify the index range of the characters you wish to extract.
 The syntax for this notation is as follows:

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substring = bigstring[start:end:step]
 You must supply at least a start or an ending index value.
 Substrings contain all characters starting at the start value specified and
continue up to (but do not include) the ending value.
 Omitting a starting or ending index value will cause Python to assume you
want to start at the beginning of the string (if you omit a start value) or you
want to continue slicing to the end of the string (if you omit the end value)
 This should look a lot like the range function!

word = "Superman sings in the

shower.”
print (word[0:8])
print (word[9:14])
print (word[:5])
print (word[9:])
print (word[-7:])
print (word[0:len(word):3])
What will the following code print?
String Slicing Notation
word = "Superman sings in the shower."
print (word[0:8]) # Superman
print (word[9:14]) # sings
print (word[:5]) # Super
print (word[9:]) # sings in the
shower.
print (word[-7:]) # shower.
print (word[0:len(word):3]) # Seasgit
or

STRING OPERATORS
 We already know that the "+" and "*" operators can be used in conjunction
with a String
 The "+" operator can be used to "concatenate" two Strings together
 The "*" operator can be used to repeat a String a certain number of times
(specified as an integer)

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TESTING STRINGS WITH IN AND NOT IN

 The "in" operator is a Boolean operator that you can use to test to see if a
substring exists inside of another string.

Example:
word = "Jackson James John Chris Tom”
if "Chris" in word:
print ("found him!”)
else:
print ("can't find Chris")
 When you construct an expression with the “in” operator the result will
evaluate to a Boolean
 You can also test to see if a string is not in another string by using the “not”
keyword in your expression.

Example:
word = "Jackson James John Chris Tom”
if ”Johnny" not in word:
print (”No Johnny!”)
else:
print (”Johnny is here!")
String Methods
STRING METHODS
 A “method” is a function that belongs to an “object”, and performs some
operation on that object. Example:
 We really haven’t explored objects much in class as of yet, but strings can
be used as a good introduction to objects and methods.
 Object Oriented Programming!
 The general syntax for calling a method on an object looks a lot like a
function call, with the notable exception that the method call generally
does not need to pass an argument to the function specifying which piece
of data is being operated on. Syntax:

[Link](arguments)

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STRING TESTING METHODS

 String testing methods allow you to determine if certain patterns existing
within a given string variable.
For example:

word = '1234’
if [Link]() == True:
print ("All chars in word are digits!”)
else:
print ("Not all chars in word are digits!”)
 In the above example we are calling the “isdigit” method on the string
variable “word”. This method returns True if all characters contained in this
string are numeric digits (0-9) and False if not.

Method Output
isalnum() True if all characters are alphanumeric
isalpha() True if all characters are alphabetic
isdigit() True if all characters are digits
islower() True is all alpha characters are lower
isspace() True if all characters are “whitespace”
isupper() True if all alpha characters are upper

PROGRAMMING CHALLENGE: CHARACTER

ANALYSIS
 Write a program that counts the # of spaces, digits, vowels and consonants
in a string that the user inputs. Example:

>> Enter a phrase: Sally Sells

1000 sea shells.
>> Spaces: 4
>> Digits: 4
>> Vowels: 5
>> Consonants: 12
MODIFICATION METHODS
 Remember that strings are immutable and cannot be directly changed.

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 With that said, they do contain a number of “modification” methods that

return new copies of the string that reflect a desired change. For example:

word = “Craig”
newword = [Link]()
print (word)
>> craig

STRING MODIFICATION METHODS

lower() Returns a lowercase version of the string
upper() Returns an uppercase version of the string
rstrip() Removes whitespace at end of string
lstrip() Removes leading whitespace characters
capitalize()
Returns a copy of the string with the first character capitalized
title() Returns a copy of the string with the first character of each word
capitalized
swapcase() Returns a copy of the string where case is swapped among all alpha
characters

SEARCHING AND REPLACING

 Programs often need to perform search and replace functions on data,
much like the “find and replace” functionality that exists in your word
processor.

FINDING SUBSTRINGS
 You can find whether a string exists inside another string by using the find()
method. Example:

word = "Like finding a needle in a

haystack!”
location = [Link]("needle”)
print (location)
 The find() method will return the index of the first occurrence of a substring
within a string.
 If the find() method cannot find the desired substring it will return -1

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REPLACING SUBSTRINGS
 You can have Python replace all occurrences of a substring by using the
replace() method. Example:

word = "Voldemort had one goal in life - to kill Harry Potter.”

newword = [Link]("Voldemort", "He who shall not be named”)
print (word)
print (newword)
>> Voldemort had one goal in life - to kill Harry Potter.
>> He who shall not be named had one goal in life - to kill Harry Potter.

PROGRAMMING CHALLENGE: REDACTED!

 Write a program that redacts all instances of “Python” from the following
string:
“Python is a programming language that is fairly easy to learn. Python is great for
beginning and advanced programmers.”
 To produce the following:
“______ is a programming language that is fairly easy to learn. _____ is great for
beginning and advanced programmers.”

PROGRAMMING CHALLENGE: PRONOUN SWITCHER

 Write a program that replaces the pronoun “his” with the pronoun “her” in
the following phrase:
"Pat said that his score on his history test was 86."

PROGRAMMING CHALLENGE – WORD REPLACE

 The Intergovernmental Panel on Climate Change (IPCC) is the international
body for assessing the science related to climate change. The IPCC was set
up in 1988 by the World Meteorological Organization (WMO) and United
Nations Environment Programme (UNEP) to provide policymakers with
regular assessments of the scientific basis of climate change, its impacts
and future risks, and options for adaptation and mitigation. IPCC
assessments provide a scientific basis for governments at all levels to
develop climate related policies, and they underlie negotiations at the UN
Climate Conference – the United Nations Framework Convention on
Climate Change (UNFCCC). The assessments are policy-relevant but not

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policy-prescriptive: they may present projections of future climate change

based on different scenarios and the risks that climate change poses and
discuss the implications of response options, but they do not tell
policymakers what actions to take. The IPCC embodies a unique
opportunity to provide rigorous and balanced scientific information to
decision-makers because of its scientific and intergovernmental nature.
Participation in the IPCC is open to all member countries of the WMO and
United Nations. It currently has 195 members. The Panel, made up of
representatives of the member states, meets in Plenary Sessions to take
major decisions. The IPCC Bureau, elected by member governments,
provides guidance to the Panel on the scientific and technical aspects of the
Panel’s work and advises the Panel on related management and strategic
issues. IPCC assessments are written by hundreds of leading scientists who
volunteer their time and expertise as Coordinating Lead Authors and Lead
Authors of the reports. They enlist hundreds of other experts as
Contributing Authors to provide complementary expertise in specific areas.
IPCC reports undergo multiple rounds of drafting and review to ensure they
are comprehensive and objective and produced in an open and transparent
way. Thousands of other experts contribute to the reports by acting as
reviewers, ensuring the reports reflect the full range of views in the
scientific community. Teams of Review Editors provide a thorough
monitoring mechanism for making sure that review comments are
addressed. (For more details see IPCC Factsheet – How does the IPCC select
its authors? and IPCC Factsheet – How does the IPCC review process
work?).
CHARACTER COUNTER
 Write a function that accepts two arguments – a string and an single
character
 Have your function search the string for all occurrences of that character
 Return the number of times the character was found in the supplied string

PROGRAMMING CHALLENGE: PALINDROME TESTER

 Write a program that asks the user for a word
 Determine whether the supplied word is a palindrome (a word that reads
the same backwards and forwards)

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PROGRAMMING CHALLENGE: USERNAME GENERATION

 You just accepted a position at NYU’s ITS department and your first task is
to write a program that generates student Net IDs for all incoming
freshmen
 Net IDs are generated as follows:
 The first two characters of a student’s first name
 The first two characters of a student’s last name
 The last three characters of a student’s N#
 Write a program that asks the user for these three pieces of information
(first name, last name and N#) and generate their Net ID.
 Note that if a student’s first name or last name is less than 2 characters
then you should use the entire first name or last name.

PROGRAMMING CHALLENGE: SIMPLE USERNAME AND PASSWORD VALIDATOR

 Write a program that asks a user for a username and a password
 Ensure that the user doesn’t use their username as part of their password.
For example:

username: craig
password: craig1234 # invalid!
username: craig
password: abc123 # ok!

PROGRAMMING CHALLENGE
 Write a program that accepts a phrase from the user
 Strip out any leading or trailing “white space” from the string
 If the string has an even number of characters, make it all lowercase
 If the string has an odd number of characters, make it all uppercase

PROGRAMMING CHALLENGE: HE WHO SHALL NOT BE NAMED

 Write a program that asks a user to type in a message.
 If they use the word “voldemort” anywhere in their message you should
warn them to be more careful!

PROGRAMMING CHALLENGE
 Write a program that prompts the user to enter in a valid Social Security

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Number, in the following format:

NNN-NN-NNNN
where ‘N’ is a digit. The program should display “Valid SSN” if the supplied string
is valid and “Invalid SSN” if it is not.
 Extension: Turn your program into a function

PROGRAMMING CHALLENGE
 Write a function that counts the number of letters in a string. You should
count both uppercase and lowercase letters. Example:

x = count_letters(“Python is fun”)
print (x)
>> 11

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2, Tokunbo Alli Street, Ikeja, Lagos

Website: [Link]

E-mail: inquiries@[Link], chrisafety@[Link]

Tel: 01- 3427217, 08132733378

STATISTICS II

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TABLE OF CONTENTS
WHAT IS STATISTICS?
CHAPTER ONE: DESCRIPTIVE STATISTICS AND FREQUENCY
DISTRIBUTIONS
CHAPTER TWO: THE NORMAL AND T-DISTRIBUTIONS
CHAPTER THREE: MAKING ESTIMATES
CHAPTER FOUR: HYPOTHESIS TESTING
CHAPTER FIVE: THE T-TEST
CHAPTER SIX: F-TEST AND ONE-WAY ANOVA
CHAPTER SEVEN: SOME NON-PARAMETRIC TESTS

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WHAT IS STATISTICS?
There are two common definitions of statistics. The first is "turning data into
information", the second is "making inferences about populations from samples".
These two definitions are quite different, but between them they capture most of
what you will learn in most introductory statistics courses. The first, "turning data
into information," is a good definition of descriptive statistics—the topic of the
first part of this, and most, introductory texts. The second, "making inferences
about populations from samples", is a good definition of inferential statistics —
the topic of the latter part of this, and most, introductory texts.

To reach an understanding of the second definition an understanding of the first

definition is needed; that is why we will study descriptive statistics before
inferential statistics. To reach an understanding of how to turn data into
information, an understanding of some terms and concepts is needed. This first
chapter provides an explanation of the terms and concepts you will need before
you can do anything statistical.

Before starting in on statistics, I want to introduce you to the two young

managers who will be using statistics to solve problems throughout this book. Ann
Howard and Kevin Schmidt just graduated from college last year, and were hired
as "Assistants to the General Manager" at Foothill Mills, a small manufacturer of
socks, stockings, and pantyhose. Since Foothill is a small firm, Ann and Kevin get a
wide variety of assignments. Their boss, John McGrath, knows a lot about knitting
hosiery, but is from the old school of management, and doesn't know much about
using statistics to solve business problems. We will see Ann or Kevin, or both, in
every chapter. By the end of the book, they may solve enough problems, and use
enough statistics, to earn promotions.

DATA AND INFORMATION; SAMPLES AND POPULATIONS

Though we tend to use data and information interchangeably in normal
conversation, we need to think of them as different things when we are thinking
about statistics. Data is the raw numbers before we do anything with them.

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Information is the product of arranging and summarizing those numbers. A listing

of the score everyone earned on the first statistics test I gave last semester is
data. If you summarize that data by computing the mean (the average score), or
by producing a table that shows how many students earned A's, how many B's,
etc. you have turned the data into information.

Imagine that one of Foothill Mill's high profile, but small sales, products is "Easy
Bounce", a cushioned sock that helps keep basketball players from bruising their
feet as they come down from jumping. John McGrath gave Ann and Kevin the task
of finding new markets for Easy Bounce socks. Ann and Kevin have decided that a
good extension of this market is college volleyball players. Before they start, they
want to learn about what size socks college volleyball players wear. First they
need to gather some data, maybe by calling some equipment managers from
nearby colleges to ask how many of what size volleyball socks were used last
season. Then they will want to turn that data into information by arranging and
summarizing their data, possibly even comparing the sizes of volleyball socks used
at nearby colleges to the sizes of socks sold to basketball players.

SOME DEFINITIONS AND IMPORTANT CONCEPTS

It may seem obvious, but a population is all of the members of a certain group. A
sample is some of the members of the population. The same group of individuals
may be a population in one context and a sample in another. The women in your
stat class are the population of "women enrolled in this statistics class", and they
are also a sample of "all students enrolled in this statistics class". It is important to
be aware of what sample you are using to make an inference about what
population.

How exact is statistics? Upon close inspection, you will find that statistics is not all
that exact; sometimes I have told my classes that statistics is "knowing when its
close enough to call it equal". When making estimations, you will find that you are
almost never exactly right. If you make the estimations using the correct method
however, you will seldom be far from wrong. The same idea goes for hypothesis
testing. You can never be sure that you've made the correct judgement, but if you

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conduct the hypothesis test with the correct method, you can be sure that the
chance you've made the wrong judgement is small.

A term that needs to be defined is probability. Probability is a measure of the

chance that something will occur. In statistics, when an inference is made, it is
made with some probability that it is wrong (or some confidence that it is right).
Think about repeating some action, like using a certain procedure to infer the
mean of a population, over and over and over. Inevitably, sometimes the
procedure will give a faulty estimate, sometimes you will be wrong. The
probability that the procedure gives the wrong answer is simply the proportion of
the times that the estimate is wrong. The confidence is simply the proportion of
times that the answer is right. The probability of something happening is
expressed as the proportion of the time that it can be expected to happen.
Proportions are written as decimal fractions, and so are probabilities. If the
probability that Foothill Hosiery's best salesperson will make the sale is .75, three-
quarters of the time the sale is made.

WHY BOTHER WITH STAT?

Reflect on what you have just read. What you are going to learn to do by learning
statistics is to learn the right way to make educated guesses. For most students,
statistics is not a favorite course. It is viewed as hard, or cosmic, or just plain
confusing. By now, you should be thinking: "I could just skip stat, and avoid
making inferences about what populations are like by always collecting data on
the whole population and knowing for sure what the population is like." Well,
many things come back to money, and its money that makes you take stat.
Collecting data on a whole population is usually very expensive, and often almost
impossible. If you can make a good, educated inference about a population from
data collected from a small portion of that population, you will be able to save
yourself, and your employer, a lot of time and money. You will also be able to
make inferences about populations for which collecting data on the whole
population is virtually impossible. Learning statistics now will allow you to save
resources later and if the resources saved later are greater than the cost of
learning statistics now, it will be worthwhile to learn statistics. It is my hope that
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the approach followed in this text will reduce the initial cost of learning statistics.
If you have already had finance, you'll understand it this way—this approach to
learning statistics will increase the net present value of investing in learning
statistics by decreasing the initial cost.

Imagine how long it would take and how expensive it would be if Ann and Kevin
decided that they had to find out what size sock every college volleyball player
wore in order to see if volleyball players wore the same size socks as basketball
players. By knowing how samples are related to populations, Ann and Kevin can
quickly and inexpensively get a good idea of what size socks volleyball players
wear, saving Foothill a lot of money and keeping John McGrath happy.

There are two basic types of inferences that can be made. The first is to estimate
something about the population, usually its mean. The second is to see if the
population has certain characteristics, for example you might want to infer if a
population has a mean greater than 5.6. This second type of inference, hypothesis
testing, is what we will concentrate on. If you understand hypothesis testing,
estimation is easy. There are many applications, especially in more advanced
statistics, in which the difference between estimation and hypothesis testing
seems blurred.
ESTIMATION
Estimation is one of the basic inferential statistics techniques. The idea is simple;
collect data from a sample and process it in some way that yields a good
inference of something about the population. There are two types of estimates:
point estimates and interval estimates. To make a point estimate, you simply find
the single number that you think is your best guess of the characteristic of the
population. As you can imagine, you will seldom be exactly correct, but if you
make your estimate correctly, you will seldom be very far wrong. How to correctly
make these estimates is an important part of statistics.

To make an interval estimate, you define an interval within which you believe the
population characteristic lies. Generally, the wider the interval, the more
confident you are that it contains the population characteristic. At one extreme,

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you have complete confidence that the mean of a population lies between - ∞
and + ∞ but that information has little value. At the other extreme, though you
can feel comfortable that the population mean has a value close to that guessed
by a correctly conducted point estimate, you have almost no confidence ("zero
plus" to statisticians) that the population mean is exactly equal to the estimate.
There is a trade-off between width of the interval, and confidence that it contains
the population mean. How to find a narrow range with an acceptable level of
confidence is another skill learned when learning statistics.

HYPOTHESIS TESTING
The other type of inference is hypothesis testing. Though hypothesis testing and
interval estimation use similar mathematics, they make quite different inferences
about the population. Estimation makes no prior statement about the population;
it is designed to make an educated guess about a population that you know
nothing about. Hypothesis testing tests to see if the population has a certain
characteristic—say a certain mean. This works by using statisticians' knowledge of
how samples taken from populations with certain characteristics are likely to look
to see if the sample you have is likely to have come from such a population.

A simple example is probably the best way to get to this. Statisticians know that if
the means of a large number of samples of the same size taken from the same
population are averaged together, the mean of those sample means equals the
mean of the original population, and that most of those sample means will be
fairly close to the population mean. If you have a sample that you suspect comes
from a certain population, you can test the hypothesis that the population mean
equals some number, m, by seeing if your sample has a mean close to m or not. If
your sample has a mean close to m, you can comfortably say that your sample is
likely to be one of the samples from a population with a mean of m.

SAMPLING
It is important to recognize that there is another cost to using statistics, even after
you have learned statistics. As we said before, you are never sure that your

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inferences are correct. The more precise you want your inference to be, either
the larger the sample you will have to collect (and the more time and money
you'll have to spend on collecting it), or the greater the chance you must take that
you'll make a mistake. Basically, if your sample is a good representation of the
whole population—if it contains members from across the range of the
population in proportions similar to that in the population—the inferences made
will be good. If you manage to pick a sample that is not a good representation of
the population, your inferences are likely to be wrong. By choosing samples
carefully, you can increase the chance of a sample which is representative of the
population, and increase the chance of an accurate inference.

The intuition behind this is easy. Imagine that you want to infer the mean of a
population. The way to do this is to choose a sample, find the mean of that
sample, and use that sample mean as your inference of the population mean. If
your sample happened to include all, or almost all, observations with values that
are at the high end of those in the population, your sample mean will
overestimate the population mean. If your sample includes roughly equal
numbers of observations with "high" and "low" and "middle" values, the mean of
the sample will be close to the population mean, and the sample mean will
provide a good inference of the population mean. If your sample includes mostly
observations from the middle of the population, you will also get a good
inference. Note that the sample mean will seldom be exactly equal to the
population mean, however, because most samples will have a rough balance
between high and low and middle values, the sample mean will usually be close
to the true population mean. The key to good sampling is to avoid choosing the
members of your sample in a manner that tends to choose too many "high" or
too many "low" observations.

There are three basic ways to accomplish this goal. You can choose your sample
randomly, you can choose a stratified sample, or you can choose a cluster sample.
While there is no way to insure that a single sample will be representative,
following the discipline of random, stratified, or cluster sampling greatly reduces
the probability of choosing an unrepresentative sample.

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THE SAMPLING DISTRIBUTION

The thing that makes statistics work is that statisticians have discovered how
samples are related to populations. This means that statisticians (and, by the end
of the course, you) know that if all of the possible samples from a population are
taken and something (generically called a “statistic”) is computed for each
sample, something is known about how the new population of statistics
computed from each sample is related to the original population. For example, if
all of the samples of a given size are taken from a population, the mean of each
sample is computed, and then the mean of those sample means is found,
statisticians know that the mean of the sample means is equal to the mean of the
original population.
There are many possible sampling distributions. Many different statistics can be
computed from the samples, and each different original population will generate
a different set of samples. The amazing thing, and the thing that makes it possible
to make inferences about populations from samples, is that there are a few
statistics which all have about the same sampling distribution when computed
from the samples from many different populations.

You are probably still a little confused about what a sampling distribution is. It will
be discussed more in the chapter on the Normal and t-distributions. An example
here will help. Imagine that you have a population—the sock sizes of all of the
volleyball players in the South Atlantic Conference. You take a sample of a certain
size, say six, and find the mean of that sample. Then take another sample of six
sock sizes, and find the mean of that sample. Keep taking different samples until
you've found the mean of all of the possible samples of six. You will have
generated a new population, the population of sample means. This population is
the sampling distribution. Because statisticians often can find what proportion of
members of this new population will take on certain values if they know certain
things about the original population, we will be able to make certain inferences
about the original population from a single sample.

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UNIVARIATE AND MULTIVARIATE STATISTICS AND THE IDEA OF AN

OBSERVATION
A population may include just one thing about every member of a group, or it
may include two or more things about every member. In either case there will be
one observation for each group member. Univariate statistics are concerned with
making inferences about one variable population like "what is the mean shoe size
of business students?" Multivariate statistics is concerned with making inferences
about the way that two or more variables are connected in the population like,
"do students with high grade point averages usually have big feet?" What's
important about multivariate statistics is that it allows you to make better
predictions. If you had to predict the shoe size of a business student and you had
found out that students with high grade point averages usually have big feet,
knowing the student's grade point average might help. Multivariate statistics are
powerful and find applications in economics, finance, and cost accounting.

Ann Howard and Kevin Schmidt might use multivariate statistics if Mr. McGrath
asked them to study the effects of radio advertising on sock sales. They could
collect a multivariate sample by collecting two variables from each of a number of
cities—recent changes in sales and the amount spent on radio ads. By using
multivariate techniques you will learn in later chapters, Ann and Kevin can see if
more radio advertising means more sock sales.

CONCLUSION
As you can see, there is a lot of ground to cover by the end of this course. There
are a few ideas that tie most of what you learn together: populations and
samples, the difference between data and information, and most important,
sampling distributions. We'll start out with the easiest part, descriptive statistics,
turning data into information. Your professor will probably skip some chapters, or
do a chapter toward the end of the book before one that's earlier in the book. As
long as you cover the chapters “Descriptive Statistics and frequency
distributions”, “The normal and the t-distributions”, “Making estimates” and that
is alright.

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You should learn more than just statistics by the time the semester is over.
Statistics is fairly difficult, largely because understanding what is going on requires
that you learn to stand back and think about things; you cannot memorize it all,
you have to figure out much of it. This will help you learn to use statistics, not just
learn statistics for its own sake.

You will do much better if you attend class regularly and if you read each chapter
at least three times. First, the day before you are going to discuss a topic in class,
read the chapter carefully but do not worry if you understand everything. Second,
soon after a topic has been covered in class, read the chapter again, this time
going slowly, making sure you can see what is going on. Finally, read it again
before the exam. Though this is a great statistics book, the stuff is hard, and no
one understands statistics the first time.

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CHAPTER ONE
DESCRIPTIVE STATISTICS AND FREQUENCY DISTRIBUTIONS
This chapter is about describing populations and samples, a subject known as
descriptive statistics. This will all make more sense if you keep in mind that the
information you want to produce is a description of the population or sample as a
whole, not a description of one member of the population. The first topic in this
chapter is a discussion of "distributions", essentially pictures of populations (or
samples). Second will be the discussion of descriptive statistics. The topics are
arranged in this order because the descriptive statistics can be thought of as ways
to describe the picture of a population, the distribution.

DISTRIBUTIONS
The first step in turning data into information is to create a distribution. The most
primitive way to present a distribution is to simply list, in one column, each value
that occurs in the population and, in the next column, the number of times it
occurs. It is customary to list the values from lowest to highest. This is simple
listing is called a "frequency distribution". A more elegant way to turn data into
information is to draw a graph of the distribution. Customarily, the values that
occur are put along the horizontal axis and the frequency of the value is on the
vertical axis.

Ann Howard called the equipment manager at two nearby colleges and found out
the following data on sock sizes used by volleyball players. At Piedmont State last
year, 14 pairs of size 7 socks, 18 pairs of size 8, 15 pairs of size 9, and 6 pairs of
size 10 socks were used. At Graham College, the volleyball team used 3 pairs of
size 6, 10 pairs of size 7, 15 pairs of size 8, 5 pairs of size 9, and 11 pairs of size 10.
Ann arranged her data into a distribution and then drew a graph called a
Histogram:

Ann could have created a relative frequency distribution as well as a frequency

distribution. The difference is that instead of listing how many times each value

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occurred, Ann would list what proportion of her sample was made up of socks of
each size:

Notice that Ann has drawn the graphs differently. In the first graph, she has used
bars for each value, while on the second, she has drawn a point for the relative
frequency of each size, and the "connected the dots". While both methods are
correct, when you have a values that are continuous, you will want to do
something more like the "connect the dots" graph. Sock sizes are discrete, they
only take on a limited number of values. Other things have continuous values,
they can take on an infinite number of values, though we are often in the habit of
rounding them off. An example is how much students weigh. While we usually
give our weight in whole pounds in the US ("I weigh 156 pounds."), few have a
weight that is exactly so many pounds. When you say "I weigh 156", you actually
mean that you weigh between 155½ and 156½ pounds. We are heading toward a
graph of a distribution of a continuous variable where the relative frequency of
any exact value is very small, but the relative frequency of observations between
two values is measurable. What we want to do is to get used to the idea that the
total area under a "connect the dots" relative frequency graph, from the lowest to
the highest possible value is one. Then, the part of the area under the graph
between two values is the relative frequency of observations with values within
that range. The height of the line above any particular value has lost any direct
meaning, because it is now the area under the line between two values that is the
relative frequency of an observation between those two values occurring.

You can get some idea of how this works if you go back to the bar graph of the
distribution of sock sizes, but draw it with relative frequency on the vertical axis. If
you arbitrarily decide that each bar has a width of one, then the area "under the
curve" between 7.5 and 8.5 is simply the height times the width of the bar for
sock size 8: 0.3510 x 1. If you wanted to find the relative frequency of sock sizes
between 6.5 and 8.5, you could simply add together the area of the bar for size 7
(that's between 6.5 and 7.5) and the bar for size 8 (between 7.5 and 8.5).

Now that you see how a distribution is created, you are ready to learn how to
describe one. There are two main things that need to be described about a

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distribution: its location and its shape. Generally, it is best to give a single
measure as the description of the location and a single measure as the description
of the shape.

MEAN
To describe the location of a distribution, statisticians use a "typical" value from
the distribution. There are a number of different ways to find the typical value,
but by far the most used is the "arithmetic mean", usually simply called the
"mean". You already know how to find the arithmetic mean, you are just used to
calling it the "average". Statisticians use average more generally—the arithmetic
mean is one of a number of different averages. Look at the formula for the
arithmetic mean:
μ = Σx
N

All you do is add up all of the members of the population, Σx, and divide by how
many members there are, N. The only trick is to remember that if there is more
than one member of the population with a certain value, to add that value once
for every member that has it. To reflect this, the equation for the mean
sometimes is written:
μ = Σfixi
N
where fi is the frequency of members of the population with the value xi.

This is really the same formula as above. If there are seven members with a value
of ten, the first formula would have you add seven ten times. The second formula
simply has you multiply seven by ten—the same thing as adding together ten
sevens.

Other measures of location are the median and the mode. The median is the
value of the member of the population that is in the middle when the members
are sorted from smallest to largest. Half of the members of the population have
values higher than the median, and half have values lower. The median is a better
measure of location if there are one or two members of the population that are a

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lot larger (or a lot smaller) than all the rest. Such extreme values can make the
mean a poor measure of location, while they have little effect on the median. If
there are an odd number of members of the population, there is no problem
finding which member has the median value. If there is an even number of
members of the population, then there is no single member in the middle. In that
case, just average together the values of the two members that share the middle.

The third common measure of location is the mode. If you have arranged the
population into a frequency or relative frequency distribution, the mode is easy to
find because it is the value that occurs most often. While in some sense, the
mode is really the most typical member of the population, it is often not very near
the middle of the population. You can also have multiple modes. I am sure you
have heard someone say that "it was a bimodal distribution". That simply means
that there were two modes, two values that occurred equally most often.

If you think about it, you should not be surprised to learn that for bell-shaped
distributions, the mean, median, and mode will be equal. Most of what
statisticians do with the describing or inferring the location of a population is
done with the mean. Another thing to think about is using a spreadsheet
program, like Microsoft Excel when arranging data into a frequency distribution or
when finding the median or mode. By using the sort and distribution commands
in 1-2-3, or similar commands in Excel, data can quickly be arranged in order or
placed into value classes and the number in each class found. Excel also has a
function, = AVERAGE (...), for finding the arithmetic mean. You can also have the
spreadsheet program draw your frequency or relative frequency distribution.

One of the reasons that the arithmetic mean is the most used measure of location
is because the mean of a sample is an "unbiased estimator" of the population
mean. Because the sample mean is an unbiased estimator of the population
mean, the sample mean is a good way to make an inference about the population
mean. If you have a sample from a population, and you want to guess what the
mean of that population is, you can legitimately guess that the population mean is
equal to the mean of your sample. This is a legitimate way to make this inference
because the mean of all the sample means equals the mean of the population, so,

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if you used this method many times to infer the population mean, on average
you'd be correct.

All of these measures of location can be found for samples as well as populations,
using the same formulas. Generally, μ is used for a population mean, and x is is
used for sample means. Upper-case N, really a Greek "nu", is used for the size of a
population, while lower case n is used for sample size. Though it is not universal,
statisticians tend to use the Greek alphabet for population characteristics and the
Roman alphabet for sample characteristics.

MEASURING POPULATION SHAPE

Measuring the shape of a distribution is more difficult. Location has only one
dimension ("where?"), but shape has a lot of dimensions. We will talk about two,
and you will find that most of the time, only one dimension of shape is measured.
The two dimensions of shape discussed here are the width and symmetry of the
distribution. The simplest way to measure the width is to do just that—the range
in the distance between the lowest and highest members of the population. The
range is obviously affected by one or two population members, which are much
higher or lower than all the rest.

The most common measures of distribution width are the standard deviation and
the variance. The standard deviation is simply the square root of the variance, so
if you know one (and have a calculator that does squares and square roots) you
know the other. The standard deviation is just a strange measure of the mean
distance between the members of a population and the mean of the population.
This is easiest to see if you start out by looking at the formula for the variance:
σ2 = Σ(x – μ)2
N

Look at the numerator. To find the variance, the first step (after you have the
mean, μ) is to take each member of the population, and find the difference
between its value and the mean; you should have N differences. Square each of
those, and add them together, dividing the sum by N, the number of members of
the population. Since you find the mean of a group of things by adding them
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together and then dividing by the number in the group, the variance is simply the
"mean of the squared distances between members of the population and the
population mean".

Notice that this is the formula for a population characteristic, so we use the Greek
σ and that we write the variance as σ2, or "sigma square" because the standard
deviation is simply the square root of the variance, its symbol is simply "sigma", σ.

One of the things statisticians have discovered is that 75 per cent of the members
of any population are with two standard deviations of the mean of the
population. This is known as Chebyshev's Theorem. If the mean of a population of
shoe sizes is 9.6 and the standard deviation is 1.1, then 75 per cent of the shoe
sizes are between 7.4 (two standard deviations below the mean) and 11.8 (two
standard deviations above the mean). This same theorem can be stated in
probability terms: the probability that anything is within two standard deviations
of the mean of its population is 0.75.

It is important to be careful when dealing with variances and standard deviations.

In later chapters, there are formulas using the variance, and formulas using the
standard deviation. Be sure you know which one you are supposed to be using.
Here again, spreadsheet programs will figure out the standard deviation for you.
In Excel, there is a function, = STDEVP (...), that does all of the arithmetic. Most
calculators will also compute the standard deviation. Read the little instruction
booklet, and find out how to have your calculator do the numbers before you do
any homework or have a test.

The other measure of shape we will discuss here is the measure of "skewness".
Skewness is simply a measure of whether or not the distribution is symmetric or if
it has a long tail on one side, but not the other. There are a number of ways to
measure skewness, with many of the measures based on a formula much like the
variance. The formula looks a lot like that for the variance, except the distances
between the members and the population mean are cubed, rather than squared,
before they are added together:
sk = Σ(x – μ)3

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At first, it might not seem that cubing rather than squaring those distances would
make much difference. Remember, however, that when you square either a
positive or negative number you get a positive number, but that when you cube a
positive, you get a positive and when you cube a negative you get a negative. Also
remember that when you square a number, it gets larger, but that when you cube
a number, it gets a whole lot larger. Think about a distribution with a long tail out
to the left. There are a few members of that population much smaller than the
mean, members for which (x – μ) is large and negative. When these are cubed,
you end up with some really big negative numbers. Because there are not any
members with such large, positive (x – μ), there are not any corresponding really
big positive numbers to add in when you sum up the (x – μ)3, and the sum will be
negative. A negative measure of skewness means that there is a tail out to the
left, a positive measure means a tail to the right. Take a minute and convince
yourself that if the distribution is symmetric, with equal tails on the left and right,
the measure of skew is zero.

To be really complete, there is one more thing to measure, "kurtosis" or

"peakedness". As you might expect by now, it is measured by taking the distances
between the members and the mean and raising them to the fourth power before
averaging them together.

MEASURING SAMPLE SHAPE

Measuring the location of a sample is done in exactly the way that the location of
a population is done. Measuring the shape of a sample is done a little differently
than measuring the shape of a population, however. The reason behind the
difference is the desire to have the sample measurement serves as an unbiased
estimator of the population measurement. If we took all of the possible samples
of a certain size, n, from a population and found the variance of each one, and
then found the mean of those sample variances, that mean would be a little
smaller than the variance of the population.

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You can see why this is so if you think it through. If you knew the population
mean, you could find Σ (x – μ)/n for each sample, and have an unbiased estimate
for σ2. However, you do not know the population mean, so you will have to infer
it. The best way to infer the population mean is to use the sample mean x. The
variance of a sample will then be found by averaging together all of the
Σ(x – x)2/n.

The mean of a sample is obviously determined by where the members of that

sample lie. If you have a sample that is mostly from the high (or right) side of a
population's distribution, then the sample mean will almost for sure be greater
than the population mean. For such a sample, Σ(x – x)2/n would underestimate σ2.
The same is true for samples that are mostly from the low (or left) side of the
population. If you think about what kind of samples will have Σ(x – x)2/n that is
greater than the population σ2, you will come to the realization that it is only
those samples with a few very high members and a few very low members—and
there are not very many samples like that. By now you should have convinced
yourself that Σ(x − x)2/n will result in a biased estimate of σ2. You can see that, on
average, it is too small.

How can an unbiased estimate of the population variance, σ2, be found? If is

Σ(x − x)2/n on average too small, we need to do something to make it a little
bigger. We want to keep the Σ(x - x)2, but if we divide it by something a little
smaller, the result will be a little larger. Statisticians have found out that the
following way to compute the sample variance results in an unbiased estimator of
the population variance:

S3 = Σ(x – x)2/(n - 1)

If we took all of the possible samples of some size, n, from a population, and
found the sample variance for each of those samples, using this formula, the
mean of those sample variances would equal the population variance, σ2.

Note that we use s2 instead of σ2, and n instead of N (really "nu", not "en") since
this is for a sample and we want to use the Roman letters rather than the Greek
letters, which are used for populations.
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There is another way to see why you divide by n - 1. We also have to address
something called "degrees of freedom" before too long, and it is the degree of
freedom that is the key of the other explanation. As we go through this
explanation, you should be able to see that the two explanations are related.

Imagine that you have a sample with 10 members (n = 10), and you want to use it
to estimate the variance of the population form which it was drawn. You write
each of the 10 values on a separate scrap of paper. If you know the population
mean, you could start by computing all Σ(x – μ)2. In the usual case, you do not
know μ, however, and you must start by finding x from the values on the 10
scraps to use as an estimate of m. Once you have found x, you could lose any one
of the 10 scraps and still be able to find the value that was on the lost scrap from
and the other 9 scraps. If you are going to use x in the formula for sample
variance, only 9 (or n-1), of the x's are free to take on any value. Because only n-1
of the x's can vary freely, you should divide Σ(x – x)2 by n - 1, the number of (x’s)
that are really free. Once you use x in the formula for sample variance, you use up
one "degree of freedom", leaving only n-1. Generally, whenever you use
something you have previously computed from a sample within a formula, you
use up a degree of freedom.

A little thought will link the two explanations. The first explanation is based on the
idea that x, the estimator of μ, varies with the sample. It is because x varies with
the sample that a degree of freedom is used up in the second explanation.

The sample standard deviation is found simply by taking the square root of the
sample variance:
S = √ [Σ(x – x)2/ (n−1)]
While the sample variance is an unbiased estimator of population variance, the
sample standard deviation is not an unbiased estimator of the population
standard deviation—the square root of the average is not the same as the
average of the square roots. This causes statisticians to use variance where it
seems as though they are trying to get at standard deviation. In general,
statisticians tend to use variance more than standard deviation. Be careful with
formulas using sample variance and standard deviation in the following chapters.

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Make sure you are using the right one. Also note that many calculators will find
standard deviation using both the population and sample formulas. Some use σ
and s to show the difference between population and sample formulas, some use
sn and sn-1 to show the difference.

If Ann Howard wanted to infer what the population distribution of volleyball

players' sock sizes looked like she could do so from her sample. If she is going to
send volleyball coaches packages of socks for the players to try, she will want to
have the packages contain an assortment of sizes that will allow each player to
have a pair that fits. Ann wants to infer what the distribution of volleyball players
sock sizes looks like. She wants to know the mean and variance of that
distribution. Her data, again, is:
size frequency
6 3
7 24
8 33
9 20
10 17

The mean sock size can be found:

= [(3 x 6) + (24 x 7) + (33 x 8) + (20 x 9) + (17 x 10)]/97 = 8.25.

To find the sample standard deviation, Ann decides to use Excel. She lists the sock
sizes that were in the sample in column A, and the frequency of each of those
sizes in column B. For column C, she has the computer find for each of Σ Σ(x – x)2
the sock sizes, using the formula = (A1 - 8.25)^2 in the first row, and then copying
it down to the other four rows. In D1, she multiplies C1, by the frequency using
the formula = B1*C1, and copying it down into the other rows. Finally, she finds
the sample standard deviation by adding up the five numbers in column D and
dividing by n-1 = 96 using the Excel formula = sum (D1:D5)/96. The spreadsheet
appears like this when she is done:
A B C D E
1 6 3 5.06 15.19

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2 7 24 1.56 37.5
3 8 33 0.06 2.06
4 9 20 0.56 11.25
5 10 17 3.06 52.06
6 n= 97 Var = 1.217139
7 [Link] = 1.103.24
8

Ann now has an estimate of the variance of the sizes of socks worn by college
volleyball players, 1.22. She has inferred that the population of college volleyball
players' sock sizes has a mean of 8.25 and a variance of 1.22.

SUMMARY
To describe a population you need to describe the picture or graph of its
distribution. The two things that need to be described about the distribution are
its location and its shape. Location is measured by an average, most often, the
arithmetic mean. The most important measure of shape is a measure of
dispersion, roughly width, most often, the variance or its square root the standard
deviation.

Samples need to be described, too. If all we wanted to do with sample

descriptions was describe the sample, we could use exactly the same measures
for sample location and dispersion that are used for populations. We want to use
the sample describers for dual purposes, however: (a) to describe the sample, and
(b) to make inferences about the description of the population that sample came
from. Because we want to use them to make inferences, we want our sample
descriptions to be "unbiased estimators". Our desire to measure sample
dispersion with an unbiased estimator of population dispersion means that the
formula we use for computing sample variance is a little difference than the used
for computing population variance.

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CHAPTER TWO
THE NORMAL AND T-DISTRIBUTIONS
The normal distribution is simply a distribution with a certain shape. It is "normal"
because many things have this same shape. The normal distribution is the “bell-
shaped distribution” that describes how so many natural, machine-made, or
human performance outcomes are distributed. If you ever took a class when you
were "graded on a bell curve", the instructor was fitting the class' grades into a
normal distribution—not a bad practice if the class is large and the tests are
objective, since human performance in such situations is normally distributed.
This chapter will discuss the normal distribution and then move onto a common
sampling distribution, the t-distribution. The t-distribution can be formed by
taking many samples (strictly, all possible samples) of the same size from a normal
population. For each sample, the same statistic, called the t-statistic, which we
will learn more about later, is calculated. The relative frequency distribution of
these t-statistics is the t-distribution. It turns out that t-statistics can be computed
a number of different ways on samples drawn in a number of different situations
and still have the same relative frequency distribution. This makes the t-
distribution useful for making many different inferences, so, it is one of the most
important links between samples and populations used by statisticians. In
between discussing the normal and t-distributions, we will discuss the central
limit theorem. The t-distribution and the central limit theorem give us knowledge
about the relationship between sample means and population means that allows
us to make inferences about the population mean.

The way the t-distribution is used to make inferences about populations from
samples is the model for many of the inferences that statisticians make. Since you
will be learning to make inferences like a statistician, try to understand the
general model of inference making as well as the specific cases presented. Briefly,
the general model of inference-making is to use statisticians' knowledge of a
sampling distribution like the t-distribution as a guide to the probable limits of
where the sample lies relative to the population. Remember that the sample you

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are using to make an inference about the population is only one of many possible
samples from the population. The samples will vary, some being highly
representative of the population, most being fairly representative, and a few not
being very representative at all. By assuming that the sample is at least fairly
representative of the population, the sampling distribution can be used as a link
between the sample and the population so you can make an inference about
some characteristic of the population.

These ideas will be developed more later on. The immediate goal of this chapter
is to introduce you to the normal distribution, the central limit theorem, and the
t-distribution.

NORMAL THINGS
Normal distributions are bell-shaped and symmetric. The mean, median, and
mode are equal. Most of the members of a normally distributed population have
values close to the mean—in a normal population 96 per cent of the members
(much better than Chebyshev's 75 per cent), are within 2 σ of the mean.

Statisticians have found that many things are normally distributed. In nature, the
weights, lengths, and thicknesses of all sorts of plants and animals are normally
distributed. In manufacturing, the diameter, weight, strength, and many other
characteristics of man- or machine-made items are normally distributed. In
human performance, scores on objective tests, the outcomes of many athletic
exercises, and college student grade point averages are normally distributed. The
normal distribution really is a normal occurrence.

If you are a skeptic, you are wondering how can GPAs and the exact diameter of
holes drilled by some machine have the same distribution—they are not even
measured with the same units. In order to see that so many things have the same
normal shape, all must be measured in the same units (or have the units
eliminated)—they must all be "standardized." Statisticians standardize many
measures by using the STANDARD deviation. All normal distributions have the
same shape because they all have the same relative frequency distribution when

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the values for their members are measured in standard deviations above or below
the mean.

Using the United States customary system of measurement, if the weight of pet
cats is normally distributed with a mean of 10.8 pounds and a standard deviation
of 2.3 pounds and the daily sales at The First Brew Expresso Café are normally
distributed with μ = $341.46 and σ = $53.21, then the same proportion of pet cats
weigh between 8.5 pounds (μ - 1σ) and 10.8 pounds (μ) as the proportion of daily
First Brew sales which lie between μ – 1σ ($288.25) and μ ($341.46). Any normally
distributed population will have the same proportion of its members between the
mean and one standard deviation below the mean. Converting the values of the
members of a normal population so that each is now expressed in terms of
standard deviations from the mean makes the populations all the same. This
process is known as "standardization" and it makes all normal populations have
the same location and shape.

This standardization process is accomplished by computing a "z-score" for every

member of the normal population. The z-score is found by:

z = (x - μ)/σ

This converts the original value, in its original units, into a standardized value in
units of "standard deviations from the mean." Look at the formula. The
numerator is simply the difference between the value of this member of the
population, x, and the mean of the population μ. It can be measured in
centimeters, or points, or whatever. The denominator is the standard deviation of
the population, σ, and it is also measured in centimeters, or points, or whatever.
If the numerator is 15cm and the standard deviation is 10cm, then the z will be
1.5. This particular member of the population, one with a diameter 15cm greater
than the mean diameter of the population, has a z-value of 1.5 because its value
is 1.5 standard deviations greater than the mean. Because the mean of the x's is
μ, the mean of the z-scores is zero.

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We could convert the value of every member of any normal population into a z-
score. If we did that for any normal population and arranged those z-scores into a
relative frequency distribution, they would all be the same.

Each and every one of those standardized normal distributions would have a
mean of zero and the same shape. There are many tables which show what
proportion of any normal population will have a z-score less than a certain value.
Because the standard normal distribution is symmetric with a mean of zero, the
same proportion of the population that is less than some positive z is also greater
than the same negative z. Some values from a "standard normal" table appear
below:

Proportion below 0.75 0.90 0.95 0.975 0.99 0.995

z-score 0.674 1.282 1.645 1.960 2.326 2.576

John McGrath has asked Kevin Schmidt "How much does a pair of size 11 men’s
dress socks usually weigh?" Kevin asks the people in quality control what they
know about the weight of these socks and is told that the mean weight is 4.25
ounces with a standard deviation of 0.021 ounces. Kevin decides that Mr.
McGrath probably wants more than the mean weight, and decides to give his boss
the range of weights within which 95% of size 11 men's dress socks falls. Kevin
sees that leaving 2.5% (-0.025) in the left tail and 2.5% (0.025) in the right tail will
leave 95% (0.95) in the middle. He assumes that sock weights are normally
distributed, a reasonable assumption for a machine-made product, and consulting
a standard normal table, sees that 0.975 of the members of any normal
population have a z-score less than 1.96 and that 0.975 have a z-score greater
than -1.96, so 0.95 have a z-score between ±1.96…

Now that he knows that 95% of the socks will have a weight with a z-score
between ±1.96, Kevin can translate those z's into ounces. By solving the equation
for both +1.96 and -1.96, he will find the boundaries of the interval within which
95% of the weights of the socks fall:

1.96 = (x - 4.25)/0.021

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solving for x, Kevin finds that the upper limit is 4.29 ounces. He then solves for z=-
1.96:
- 1.96 = (x -4.25)/0.021

and finds that the lower limit is 4.21 ounces. He can now go to John McGrath and
tell him: "95% of size 11 men’s dress socks weigh between 4.21 and 4.29 ounces."

THE CENTRAL LIMIT THEOREM

If this was a statistics course for math majors, you would probably have to prove
this theorem. Because this text is designed for business and other non-math
students, you will only have to learn to understand what the theorem says and
why it is important. To understand what it says, it helps to understand why it
works. Here is an explanation of why it works.

The theorem is about sampling distributions and the relationship between the
location and shape of a population and the location and shape of a sampling
distribution generated from that population. Specifically, the central limit
theorem explains the relationship between a population and the distribution of
sample means found by taking all of the possible samples of a certain size from
the original population, finding the mean of each sample, and arranging them into
a distribution.

The sampling distribution of means is an easy concept. Assume that you have a
population of x's. You take a sample of n of those x's and find the mean of that
sample, giving you one x . Then take another sample of the same size, n, and find
its x ... Do this over and over until you have chosen all possible samples of size n.
You will have generated a new population, a population of x 's. Arrange this
population into a distribution, and you have the sampling distribution of means.
You could find the sampling distribution of medians, or variances, or some other
sample statistic by collecting all of the possible samples of some size, n, finding
the median, variance, or other statistic about each sample, and arranging them
into a distribution.

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The central limit theorem is about the sampling distribution of means. It links the
sampling distribution of x ’s with the original distribution of x's. It tells us that:

(1) The mean of the sample means equals the mean of the original population,
μx = μ. This is what makes x an unbiased estimator of μ.
(2) The distribution of x ’s will be bell-shaped, no matter what the shape of the
original distribution of x's.

This makes sense when you stop and think about it. It means that only a small
portion of the samples have means that are far from the population mean. For a
sample to have a mean that is far from x, almost all of its members have to be
from the right tail of the distribution of x's, or almost all have to be from the left
tail. There are many more samples with most of their members from the middle
of the distribution, or with some members from the right tail and some from the
left tail, and all of those samples will have an x close to x.

(3a) The larger the samples, the closer the sampling distribution will be to
normal, and
(3b) If the distribution of x's is normal, so is the distribution of x’s.

These come from the same basic reasoning as 2), but would require a formal
proof since "normal distribution" is a mathematical concept. It is not too hard to
see that larger samples will generate a "more-bell-shaped" distribution of sample
means than smaller samples, and that is what makes 3a) work.

(4) The variance of the x’s is equal to the variance of the x's divided by the
sample size, or:

σ2x = σ2/ n

therefore, the standard deviation of the sampling distribution is:

σx = σ/√n

While it is a difficult to see why this exact formula holds without going through a
formal proof, the basic idea that larger samples yield sampling distributions with

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smaller standard deviations can be understood intuitively. If σx = σx/√n, then, σx <

σA. Furthermore, when the sample size, n, rises, σ2x gets smaller. This is because it
becomes more unusual to get a sample with an x that is far from μ as n gets
larger. The standard deviation of the sampling distribution includes an (x − μ) for
each, but remember that there are not many x's that are as far from μ as there
are x's that are far from μ, and as n grows there are fewer and fewer samples with
an x far from μ. This means that there are not many (x – μ) that are as large as
quite a few (x - μ) are. By the time you square everything, the average (x− μ)2 is
going to be much smaller than the average (x – μ)2, so, σx is going to be smaller
than σx. If the mean volume of soft drink in a population of 12 ounce cans is 12.05
ounces with a variance of .04 (and a standard deviation of .2), then the sampling
distribution of means of samples of 9 cans will have a mean of 12.05 ounces and a
variance of 0.04/9 = 0.0044 (and a standard deviation of 0.2/3= 0.0667).

You can follow this same line of reasoning once again, and see that as the sample
size gets larger, the variance and standard deviation of the sampling distribution
will get smaller. Just remember that as sample size grows, samples with an x that
is far from μ get rarer and rarer, so that the average (x − μ)2 will get smaller. The
average (x − μ)2 is the variance. If larger samples of soft drink bottles are taken,
say samples of 16, even fewer of the samples will have means that are very far
from the mean of 12.05 ounces. The variance of the sampling distribution when
n=16 will therefore be smaller. According to what you have just learned, the
variance will be only 0.04/16=.0025 (and the standard deviation will be
0.2/4=.05). The formula matches what logically is happening; as the samples get
bigger, the probability of getting a sample with a mean that is far away from the
population mean gets smaller, so the sampling distribution of means gets
narrower and the variance (and standard deviation) gets smaller. In the formula,
you divide the population variance by the sample size to get the sampling
distribution variance. Since bigger samples means dividing by a bigger number,
the variance falls as sample size rises. If you are using the sample mean as to infer
the population mean, using a bigger sample will increase the probability that your
inference is very close to correct because more of the sample means are very
close to the population mean. There is obviously a trade-off here. The reason you

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wanted to use statistics in the first place was to avoid having to go to the bother
and expense of collecting lots of data, but if you collect more data, your statistics
will probably be more accurate.

THE T-DISTRIBUTION
The central limit theorem tells us about the relationship between the sampling
distribution of means and the original population. Notice that if we want to know
the variance of the sampling distribution we need to know the variance of the
original population. You do not need to know the variance of the sampling
distribution to make a point estimate of the mean, but other, more elaborate,
estimation techniques require that you either know or estimate the variance of
the population. If you reflect for a moment, you will realize that it would be
strange to know the variance of the population when you do not know the mean.
Since you need to know the population mean to calculate the population variance
and standard deviation, the only time when you would know the population
variance without the population mean are examples and problems in textbooks.
The usual case occurs when you have to estimate both the population variance
and mean. Statisticians have figured out how to handle these cases by using the
sample variance as an estimate of the population variance (and being able to use
that to estimate the variance of the sampling distribution). Remember that s2 is
an unbiased estimator of σ2 . Remember, too, that the variance of the sampling
distribution of means is related to the variance of the original population
according to the equation:

σ2x = σ2/ n

so, the estimated standard deviation of a sampling distribution of means is:

estimated σx = s/√n

Following this thought, statisticians found that if they took samples of a constant
size from a normal population, computed a statistic called a "t-score" for each
sample, and put those into a relative frequency distribution, the distribution
would be the same for samples of the same size drawn from any normal
population. The shape of this sampling distribution of t's varies somewhat as

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sample size varies, but for any n it's always the same. For example, for samples of
5, 90% of the samples have t-scores between -1.943 and +1.943, while for
samples of 15, 90% have t-scores between ±1.761. The bigger the samples, the
narrower the range of scores that covers any particular proportion of the
samples. That t-score is computed by the formula:

t = (x - μ)/(s/√n)

By comparing the formula for the t-score with the formula for the z-score, you will
be able to see that the ‘t‘ is just an estimated ‘z’. Since there is one t-score for
each sample, the t is just another sampling distribution. It turns out that there are
other things that can be computed from a sample that have the same distribution
as this t. Notice that we've used the sample standard deviation, s, in computing
each t-score. Since we have used s, we've used up one degree of freedom.
Because there are other useful sampling distributions that have this same shape,
but use up various numbers of degrees of freedom, it is the usual practice to refer
to the t-distribution not as the distribution for a particular sample size, but as the
distribution for a particular number of degrees of freedom. There are published
tables showing the shapes of the t-distributions, and they are arranged by
degrees of freedom so that they can be used in all situations.

Looking at the formula, you can see that the mean t-score will be zero since the
mean x equals μ. Each t-distribution is symmetric, with half of the t-scores being
positive and half negative because we know from the central limit theorem that
the sampling distribution of means is normal, and therefore symmetric, when the
original population is normal.

An excerpt from a typical t-table is printed below. Note that there is one line each
for various degrees of freedom. Across the top are the proportions of the
distributions that will be left out in the tail--the amount shaded in the picture. The
body of the table shows which t-score divides the bulk of the distribution of t's for
that df from the area shaded in the tail, which t-score leaves that proportion of t's
to its right. For example, if you chose all of the possible samples with 9df, and

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found the t-score for each, 0.025 (2½ %) of those samples would have t-scores
greater than 2.262, and .975 would have t-scores less than 2.262.

Df prob = 0.10 prob. = 0.05 prob. = 0.025 prob. = 0.01 prob. = .005
1 3.078 6.314 12.70 13.81 63.65
5 1.476 2.015 2.571 3.365 4.032
6 1.440 1.943 2.447 3.143 3.707
7 1.415 1.895 2.365 2.998 3.499
8 1.397 1.860 2.306 2.896 3.355
9 1.383 1.833 2.262 2.821 3.250
10 1.372 1.812 2.228 2.764 3.169
20 1.325 1.725 2.086 2.528 2.845
30 1.310 1.697 2.046 2.457 2.750
40 1.303 1.684 2.021 2.423 2.704
Infinity 1.282 1.645 1.960 2.326 2.58

Exhibit 3: A sampling of a student's t-table. The table shows the probability of

exceeding the value in the body. With 5 df, there is a 0.05 probability that a
sample will have a t-score > 2.015.

Since the t-distributions are symmetric, if 2½% (0.025) of the t's with 9df are
greater than 2.262, then 2½% are less than -2.262. The middle 95% (0.95) of the
t's, when there are 9df, are between -2.262 and +2.262. The middle .90 of
t=scores when there are 14df are between ±1.761, because -1.761 leaves .05 in
the left tail and +1.761 leaves .05 in the right tail. The t-distribution gets closer
and closer to the normal distribution as the number of degrees of freedom rises.
As a result, the last line in the t-table, for infinity df, can also be used to find the z-
scores that leave different proportions of the sample in the tail.

What could Kevin have done if he had been asked "about how much does a pair
of size 11 socks weigh?" and he could not easily find good data on the

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population? Since he knows statistics, he could take a sample and make an

inference about the population mean. Because the distribution of weights of
socks is the result of a manufacturing process, it is almost certainly normal. The
characteristics of almost every manufactured product are normally distributed. In
a manufacturing process, even one that is precise and well-controlled, each
individual piece varies slightly as the temperature varies some, the strength of the
power varies as other machines are turned on and off, the consistency of the raw
material varies slightly, and dozens of other forces that affect the final outcome
vary slightly. Most of the socks, or bolts, or whatever is being manufactured, will
be very close to the mean weight, or size, with just as many a little heavier or
larger as there are that are a little lighter or smaller. Even though the process is
supposed to be producing a population of "identical" items, there will be some
variation among them. This is what causes so many populations to be normally
distributed. Because the distribution of weights is normal, he can use the t-table
to find the shape of the distribution of sample t-scores. Because he can use the t-
table to tell him about the shape of the distribution of sample t-scores, he can
make a good inference about the mean weight of a pair of socks. This is how he
could make that inference:

STEP 1. Take a sample of n, say 15, pairs size 11 socks and carefully weigh
each pair.
STEP 2. Find x and s for his sample.
STEP 3 (where the tricky part starts). Look at the t-table, and find the t-
scores that leave some proportion, say .95, of sample t's with n-1df in the
middle.
STEP 4 (the heart of the tricky part). Assume that his sample has a t-score
that is in the middle part of the distribution of t-scores.
STEP 5 (the arithmetic). Take his x , s, n, and t's from the t-table, and set
up two equations, one for each of his two table t-values. When he solves
each of these equations for m, he will find a interval that he is 95% sure (a
statistician would say "with .95 confidence") contains the population mean.

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Kevin decides this is the way he will go to answer the question. His sample
contains pairs of socks with weights of:

4.36, 4.32, 4.29, 4.41, 4.45, 4.50, 4.36, 4.35, 4.33, 4.30, 4.39, 4.41, 4.43, 4.28,
4.46 oz.

He finds his sample mean, x = 4.376 ounces, and his sample standard deviation
(remembering to use the sample formula), s = 0.067 ounces. The t-table tells him
that 0.95 of sample t's with 14df are between •±2.145. He solves these two
equations for μ:

+2.145 = (4.376 – μ)/(.067/√14) and -2.145 = (4.376 – μ)/(.067/√14)

finding μ= 4.366 ounces and μ= 4.386. With these results, Kevin can report that he
is "95 per cent sure that the mean weight of a pair of size 11 socks is between
4.366 and 4.386 ounces". Notice that this is different from when he knew more
about the population in the previous example.

SUMMARY
A lot of material has been covered in this chapter, and not much of it has been
easy. We are getting into real statistics now, and it will require care on your part if
you are going to keep making sense of statistics.

The chapter outline is simple:

• Many things are distributed the same way, at least once we've standardized
the members' values into z-scores.
• The central limit theorem gives users of statistics a lot of useful information
about how the sampling distribution of is related to the original population
of x's.
• The t-distribution lets us do many of the things the central limit theorem
permits, even when the variance of the population, sx, is not known.

We will soon see that statisticians have learned about other sampling
distributions and how they can be used to make inferences about populations
from samples. It is through these known sampling distributions that most

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statistics is done. It is these known sampling distributions that give us the link
between the sample we have and the population that we want to make an
inference about.

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CHAPTER THREE
MAKING ESTIMATES
The most basic kind of inference about a population is an estimate of the location
(or shape) of a distribution. The central limit theorem says that the sample mean
is an unbiased estimator of the population mean and can be used to make a single
point inference of the population mean. While making this kind of inference will
give you the correct estimate on average, it seldom gives you exactly the correct
estimate. As an alternative, statisticians have found out how to estimate an
interval that almost certainly contains the population mean. In the next few
pages, you will learn how to make three different inferences about a population
from a sample. You will learn how to make interval estimates of the mean, the
proportion of members with a certain characteristic, and the variance. Each of
these procedures follows the same outline, yet each uses a different sampling
distribution to link the sample you have chosen with the population you are trying
to learn about.
ESTIMATING THE POPULATION MEAN
Though the sample mean is an unbiased estimator of the population mean, very
few samples have a mean exactly equal to the population mean. Though few
samples have a mean, exactly equal to the population mean, m, the central limit
theorem tells us that most samples have a mean that is close to the population
mean. As a result, if you use the central limit theorem to estimate μ, you will
seldom be exactly right, but you will seldom be far wrong. Statisticians have
learned how often a point estimate will be how wrong. Using this knowledge you
can find an interval, a range of values, which probably contains the population
mean. You even get to choose how great a probability you want to have, though
to raise the probability, the interval must be wider.

Most of the time, estimates are interval estimates. When you make an interval
estimate, you can say " I am z per cent sure that the mean of this population is
between x and y". Quite often, you will hear someone say that they have
estimated that the mean is some number "so much". What they have done is

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quoted the midpoint of the interval for the "some number", so that the interval
between x and y can then be split in half with + "so much" above the midpoint
and - "so much" below. They usually do not tell you that they are only "z per cent
sure". Making such an estimate is not hard— it is what Kevin Schmidt did at the
end of the last chapter. It is worth your while to go through the steps carefully
now, because the same basic steps are followed for making any interval estimate.

In making any interval estimate, you need to use a sampling distribution. In

making an interval estimate of the population mean, the sampling distribution
you use is the t-distribution.

The basic method is to pick a sample and then find the range of population means
that would put your sample's t-score in the central part of the t-distribution. To
make this a little clearer, look at the formula for t:

t=x–μ
s
√n

n is your sample's size and x and s are computed from your sample. μ is what
you are trying to estimate. From the t-table, you can find the range of t-scores
that include the middle 80 per cent, or 90 per cent, or whatever per cent, for n-1
degrees of freedom. Choose the percentage you want and use the table. You now
have the lowest and highest t-scores, x, s and n. You can then substitute the
lowest t-score into the equation and solve for μ to find one of the limits for μ if
your sample's t-score is in the middle of the distribution. Then substitute the
highest t-score into the equation, and find the other limit. Remember that you
want two μ's because you want to be able to say that the population mean is
between two numbers.

The two t-scores are almost always the same number. The only heroic thing you
have done is to assume that your sample has a t-score that is "in the middle" of
the distribution. As long as your sample meets that assumption, the population
mean will be within the limits of your interval. The probability part of your
interval estimate, "I am z per cent sure that the mean is between...", or "with z

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confidence, the mean is between...", comes from how much of the t-distribution
you want to include as "in the middle". If you have a sample of 25 (so there are
24df), looking at the table you will see that .95 of all samples of 25 will have a t-
score between •±2.064; that also means that for any sample of 25, the probability
that its t is between•±2.064 is .95.

As the probability goes up, the range of t-scores necessary to cover the larger
proportion of the sample gets larger. This makes sense. If you want to improve
the chance that your interval contains the population mean, you could simply
choose a wider interval. For example, if your sample mean was 15, sample
standard deviation was 10, and sample size was 25, to be .95 sure you were
correct, you would need to base your mean on t-scores of ±2.064. Working
through the arithmetic gives you an interval from 10.872 to 19.128. To have .99
confidence, you would need to base your interval on t-scores of •}2.797. Using
these larger t-scores gives you a wider interval, one from 9.416 to 20.584. This
trade-off between precision (a narrower interval is more precise) and confidence
(probability of being correct), occurs in any interval estimation situation. There is
also a trade-off with sample size. Looking at the t-table, note that the t-scores for
any level of confidence are smaller when there are more degrees of freedom.
Because sample size determines degrees of freedom, you can make an interval
estimate for any level of confidence more precise if you have a larger sample.
Larger samples are more expensive to collect, however, and one of the main
reasons we want to learn statistics is to save money. There is a three-way trade-
off in interval estimation between precision, confidence, and cost.

At Foothill Hosiery, John McGrath has become concerned that the hiring practices
discriminate against older workers. He asks Kevin to look into the age at which
new workers are hired, and Kevin decides to find the average age at hiring. He
goes to the personnel office, and finds out that over 2,500 different people have
worked at Foothill in the past fifteen years. In order to save time and money,
Kevin decides to make an interval estimate of the mean age at date of hire. He
decides that he wants to make this estimate with 0.95 confidence. Going into the
personnel files, Kevin chooses 30 folders, and records the birth date and date of

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hiring from each. He finds the age at hiring for each person, and computes the
sample mean and standard deviation, finding x = 24.71 years and s = 2.13 years.
Going to the t-table, he finds that 0.95 of t-scores with 29df are between•±2.045.
He solves two equations:

•±2.045 = (24.71 – μ)/ (2.13/√30)

and finds that the limits to his interval are 23.91 and 25.51. Kevin tells Mr.
McGrath: "With 0.95 confidence, the mean age at date of hire is between 23.91
years and 25.51 years."

ESTIMATING THE POPULATION PROPORTION

There are many times when you, or your boss, will want to estimate the
proportion of a population that has a certain characteristic. The best known
examples are political polls when the proportion of voters who would vote for a
certain candidate is estimated. This is a little trickier than estimating population
mean. It should only be done with large samples and there are adjustments that
should be made under various conditions. We will cover the simplest case here,
assuming that the population is very large, the sample is large, and that once a
member of the population is chosen to be in the sample, it is replaced so that it
might be chosen again. Statisticians have found that, when all of the assumptions
are met, there is a sample statistic that follows the standard normal distribution.
If all of the possible samples of a certain size are chosen, and for each sample, p,
the proportion of the sample with a certain characteristic, is found, and for each
sample a z-statistic is computed with the formula:
z = p-π
√(p)(1 - p)/n
where π = proportion of population with the characteristic these will be
distributed normally. Looking at the bottom line of the t-table, 0.90 of these z's
will be between 1.645, 0.99 will be between•±2.326, etc.

Because statisticians know that the z-scores found from sample will be distributed
normally, you can make an interval estimate of the proportion of the population
with the characteristic. This is simple to do, and the method is parallel to that
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used to make an interval estimate of the population mean: (1) choose the sample,
(2) find the sample p, (3) assume that your sample has a z-score that is not in the
tails of the sampling distribution, (4) using the sample p as an estimate of the
population π in the denominator and the table z-values for the desired level of
confidence, solve twice to find the limits of the interval that you believe contains
the population proportion, p.

At Foothill Hosiery, Ann Howard is also asked by John McGrath to look into the
age at hiring at the plant. Ann takes a different approach than Kevin, and decides
to investigate what proportion of new hires were at least 35. She looks at the
personnel records and, like Kevin, decides to make an inference from a sample
after finding that over 2,500 different people have worked at Foothill at some
time in the last fifteen years. She chooses 100 personnel files, replacing each file
after she has recorded the age of the person at hiring. She finds 17 who were 35
or older when they first worked at Foothill. She decides to make her inference
with 0.95 confidence, and from the last line of the t-table finds that .95 of z-scores
lie between•±1.96. She finds her upper and lower bounds:

+ 1.96 = 0.17 – π
√(0.17)(1 – 0,17)/100

π = 0.17 - (0.038)(1.96) = 0.095

and concludes, that with .95 confidence, the proportion of people who have
worked at Foothills Hosiery who were over 35 when hired is between 0.095 and
0.245. This is a fairly wide interval. Looking at the equation for constructing the
interval, you should be able to see that a larger sample size will result in a
narrower interval, just as it did when estimating the population mean.

ESTIMATING POPULATION VARIANCE

Another common interval estimation task is to estimate the variance of a
population. High quality products not only need to have the proper mean
dimension, the variance should be small. The estimation of population variance
follows the same strategy as the other estimations. By choosing a sample and

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assuming that it is from the middle of the population, you can use a known
sampling distribution to find a range of values that you are confident contains the
population variance. Once again, we will use a sampling distribution that
statisticians have discovered forms a link between samples and populations.

Take a sample of size n from a normal population with known variance, and
compute a statistic called "Χ2" (pronounced "chi square") for that sample using
the following formula:

X2 = Σ(x – x)2
σ2
You can see that X2 will always be positive, because both the numerator and
denominator will always be positive. Thinking it through a little, you can also see
that as n gets larger, X2, will generally be larger since the numerator will tend to
be larger as more and more (x − x)2 are summed together. It should not be too
surprising by now to find out that if all of the possible samples of a size n are
taken from any normal population, that when X2 is computed for each sample and
those X2 are arranged into a relative frequency distribution, the distribution is
always the same.

Because the size of the sample obviously affects X2, there is a different
distribution for each different sample size. There are other sample statistics that
are distributed like X2, so, like the t-distribution, tables of the X2 distribution are
arranged by degrees of freedom so that they can be used in any procedure where
appropriate. As you might expect, in this procedure, df = n - 1. A portion of a X2
table is reproduced below.
The X2 distribution
p 0.95 0.90 0.10 0.05
n df
2 1 0.004 0.02 2.706 3.841
10 9 3.33 4.17 14.68 19.92
15 14 6.57 7.79 21.1 23.7
20 19 10.12 11.65 27.2 30.1
30 19 17.71 19.77 39.1 42.6

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Exhibit 4: The X2 distribution

Variance is important in quality control because you want your product to be

consistently the same. John McGrath has just returned from a seminar called
"Quality Socks, Quality Profits". He learned something about variance, and has
asked Kevin to measure the variance of the weight of Foothill's socks. Kevin
decides that he can fulfill this request by using the data he collected when Mr.
McGrath asked about the average weight of size 11 men's dress socks. Kevin
knows that the sample variance is an unbiased estimator of the population
variance, but he decides to produce an interval estimate of the variance of the
weight of pairs of size 11 men's socks. He also decides that 0.90 confidence will be
good until he finds out more about what Mr McGrath wants.

Kevin goes and finds the data for the size 11 socks, and gets ready to use the 2
distribution to make a 0.90 confidence interval estimate of the variance of the
weights of socks. His sample has 15 pairs in it, so he will have 14 df. From the X2
table he sees that 0.95 of 2 are greater than 6.57 and only 0.05 are greater than
23.7 when there are 14df. This means that 0.90 are between 6.57 and 23.7.
Assuming that his sample has a X2 that is in the middle .90, Kevin gets ready to
compute the limits of his interval. He notices that he will have to find Σ(x − x)2 and
decides to use his spreadsheet program rather than find (x – x)2 fifteen times. He
puts the original sample values in the first column, and has the program compute
the mean. Then, he has the program find (x – x)2 fifteen times. Finally, he has the
spreadsheet sum up the squared differences and finds 0.062.

Kevin then takes the χ2 formula, and solves it twice, once by setting χ2 equal to
6.57:
χ2 = 6.57 = 0.062/σ2

Solving for σ2, he finds one limit for his interval is 0.0094. He solves the second
time by setting x2 = 23.6:
23.6 = 0.062/σ2 a

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and find that the other limit is 0.0026. Armed with his data, Kevin reports to Mr
McGrath that "with 0.90 confidence, the variance of weights of size 11 men's
socks is between 0.0026 and 0.0094."

WHAT IS THIS CONFIDENCE STUFF MEAN ANYWAY?

In the example we just did, Ann found "that with 0.95 confidence..." What exactly
does "with 0.95 confidence" mean? The easiest way to understand this is to think
about the assumption that Ann had made that she had a sample with a z-score
that was not in the tails of the sampling distribution. More specifically, she
assumed that her sample had a z-score between ±1.96; that it was in the middle
95 per cent of z-scores. Her assumption is true 95% of the time because 95% of z-
scores are between ±1.96. If Ann did this same estimate, including drawing a new
sample, over and over, in 0.95 of those repetitions, the population proportion
would be within the interval because in 0.95 of the samples the z-score would be
between ±1.96. In .95 of the repetitions, her estimate would be right.

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CHAPTER FOUR
HYPOTHESIS TESTING
Hypothesis testing is the other widely used form of inferential statistics. It is
different from estimation because you start a hypothesis test with some idea of
what the population is like and then test to see if the sample supports your idea.
Though the mathematics of hypothesis testing is very much like the mathematics
used in interval estimation, the inference being made is quite different. In
estimation, you are answering the question "what is the population like?" While
in hypothesis testing you are answering the question "is the population like this or
not?"

A hypothesis is essentially an idea about the population that you think might be
true, but which you cannot prove to be true. While you usually have good reasons
to think it is true, and you often hope that it is true, you need to show that the
sample data supports your idea. Hypothesis testing allows you to find out, in a
formal manner, if the sample supports your idea about the population. Because
the samples drawn from any population vary, you can never be positive of your
finding, but by following generally accepted hypothesis testing procedures, you
can limit the uncertainty of your results.

As you will learn in this chapter, you need to choose between two statements
about the population. These two statements are the hypotheses. The first, known
as the "null hypothesis", is basically "the population is like this". It states, in
formal terms, that the population is no different than usual. The second, known
as the "alternative hypothesis", is "the population is like something else". It states
that the population is different than the usual, that something has happened to
this population, and as a result it has a different mean, or different shape than the
usual case. Between the two hypotheses, all possibilities must be covered.
Remember that you are making an inference about a population from a sample.
Keeping this inference in mind, you can informally translate the two hypotheses
into "I am almost positive that the sample came from a population like this" and "I
really doubt that the sample came from a population like this, so it probably came

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from a population that is like something else". Notice that you are never entirely
sure, even after you have chosen the hypothesis which is best. Though the formal
hypotheses are written as though you will choose with certainty between the one
that is true and the one that is false, the informal translations of the hypotheses,
with "almost positive" or "probably came", is a better reflection of what you
actually find.

Hypothesis testing has many applications in business, though few managers are
aware that that is what they are doing. As you will see, hypothesis testing, though
disguised, is used in quality control, marketing, and other business applications.
Many decisions are made by thinking as though a hypothesis is being tested, even
though the manager is not aware of it. Learning the formal details of hypothesis
testing will help you make better decisions and better understand the decisions
made by others.

The next section will give an overview of the hypothesis testing method by
following along with a young decision-maker as he uses hypothesis testing. The
rest of the chapter will present some specific applications of hypothesis tests as
examples of the general method.

THE STRATEGY OF HYPOTHESIS TESTING

Usually, when you use hypothesis testing, you have an idea that the world is a
little bit surprising, that it is not exactly as conventional wisdom says it is.
Occasionally, when you use hypothesis testing, you are hoping to confirm that the
world is not surprising, that it is like conventional wisdom predicts. Keep in mind
that in either case you are asking "is the world different from the usual, is it
surprising?" Because the world is usually not surprising and because in statistics
you are never 100 per cent sure about what a sample tells you about a
population, you cannot say that your sample implies that the world is surprising
unless you are almost positive that it does. The dull, unsurprising, usual case not
only wins if there is a tie, it gets a big lead at the start. You cannot say that the
world is surprising, that the population is unusual, unless the evidence is very

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strong. This means that when you arrange your tests, you have to do it in a
manner that makes it difficult for the unusual, surprising world to win support.

The first step in the basic method of hypothesis testing is to decide what value
some measure of the population would take if the world was unsurprising.
Second, decide what the sampling distribution of some sample statistic would
look like if the population measure had that unsurprising value. Third, compute
that statistic from your sample and see if it could easily have come from the
sampling distribution of that statistic if the population was unsurprising. Fourth,
decide if the population your sample came from is surprising because your sample
statistic could not easily have come from the sampling distribution generated
from the unsurprising population.

That all sounds complicated, but it is really pretty simple. You have a sample and
the mean, or some other statistic, from that sample. With conventional wisdom,
the null hypothesis that the world is dull and not surprising, tells you that your
sample comes from a certain population. Combining the null hypothesis with
what statisticians know tells you what sampling distribution your sample statistic
comes from if the null hypothesis is true. If you are "almost positive" that the
sample statistic came from that sampling distribution, the sample supports the
null. If the sample statistic "probably came" from a sampling distribution
generated by some other population, the sample supports the alternative
hypothesis that the population is "like something else".

Imagine that Thad Stoykov works in the marketing department of Pedal Pushers, a
company that makes clothes for bicycle riders. Pedal Pushers has just completed a
big advertising campaign in various bicycle and outdoor magazines, and Thad
wants to know if the campaign has raised the recognition of the Pedal Pushers
brand so that more than 30 per cent of the potential customers recognize it. One
way to do this would be to take a sample of prospective customers and see if at
least 30 per cent of those in the sample recognize the Pedal Pushers brand.
However, what if the sample is small and just barely 30 per cent of the sample
recognizes Pedal Pushers? Because there is variance among samples, such a
sample could easily have come from a population in which less than 30 percent

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recognize the brand—if the population actually had slightly less than 30 per cent
recognition, the sampling distribution would include quite a few samples with
sample proportions a little above 30 per cent, especially if the samples are small.
In order to be comfortable that more than 30 per cent of the population
recognizes Pedal Pushers, Thad will want to find that a bit more than 30 per cent
of the sample does. How much more depends on the size of the sample, the
variance within the sample, and how much chance he wants to take that he'll
conclude that the campaign did not work when it actually did.

Let us follow the formal hypothesis testing strategy along with Thad. First, he
must explicitly describe the population his sample could come from in two
different cases. The first case is the unsurprising case, the case where there is no
difference between the population his sample came from and most other
populations. This is the case where the ad campaign did not really make a
difference, and it generates the null hypothesis. The second case is the surprising
case when his sample comes from a population that is different from most others.
This is where the ad campaign worked, and it generates the alternative
hypothesis. The descriptions of these cases are written in a formal manner. The
null hypothesis is usually called "Ho" The alternative hypothesis is called either
"H1:" or "Ha:". For Thad and the Pedal Pushers marketing department, the null
will be:

Ho : proportion of the population recognizing Pedal Pushers brand < 0.30 and the
alternative will be:
Ha : proportion of the population recognizing Pedal Pushers brand > 0.30.

Notice that Thad has stacked the deck against the campaign having worked by
putting the value of the population proportion that means that the campaign was
successful in the alternative hypothesis. Also notice that between Ho: and Ha: all
possible values of the population proportion—>,=, and < 0.30 — have been
covered.

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Second, Thad must create a rule for deciding between the two hypotheses. He
must decide what statistic to compute from his sample and what sampling
distribution that statistic would come from if the null hypothesis,

Ho: is true. He also needs to divide the possible values of that statistic into "usual"
and "unusual" ranges if the null is true. Thad's decision rule will be that if his
sample statistic has a "usual" value, one that could easily occur if

Ho: is true, then his sample could easily have come from a population like that
described in Ho: If his sample's statistic has a value that would be "unusual" if Ho :
is true, then the sample probably comes from a population like that described in
Ha :. Notice that the hypotheses and the inference are about the original
population while the decision rule is about a sample statistic. The link between
the population and the sample is the sampling distribution. Knowing the relative
frequency of a sample statistic when the original population has a proportion with
a known value is what allows Thad to decide what are "usual" and "unusual"
values for the sample statistic.

The basic idea behind the decision rule is to decide, with the help of what
statisticians know about sampling distributions, how far from the null hypothesis'
value for the population the sample value can be before you are uncomfortable
deciding that the sample comes from a population like that hypothesized in the
null. Though the hypotheses are written in terms of descriptive statistics about
the population—means, proportions, or even a distribution of values—the
decision rule is usually written in terms of one of the standardized sampling
distributions—the t, the normal z, or another of the statistics whose distributions
are in the tables at the back of statistics books. It is the sampling distributions in
these tables that are the link between the sample statistic and the population in
the null hypothesis. If you learn to look at how the sample statistic is computed
you will see that all of the different hypothesis tests are simply variations on a
theme. If you insist on simply trying to memorize how each of the many different
statistics is computed, you will not see that all of the hypothesis tests are
conducted in a similar manner, and you will have to learn many different things
rather than learn the variations of one thing.

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Thad has taken enough statistics to know that the sampling distribution of sample
proportions is normally distributed with a mean equal to the population
proportion and a standard deviation that depends on the population proportion
and the sample size. Because the distribution of sample proportions is normally
distributed, he can look at the bottom line of a t-table and find out that only .05
of all samples will have a proportion more than 1.645 standard deviations above
0.30 if the null hypothesis is true. Thad decides that he is willing to take a 5 per
cent chance that he will conclude that the campaign did not work when it actually
did, and therefore decides that he will conclude that the sample comes from a
population with a proportion that has heard of Pedal Pushers that is greater than
0.30 if the sample's proportion is more than 1.645 standard deviations above
0.30. After doing a little arithmetic (which you'll learn how to do later in the
chapter), Thad finds that his decision rule is to decide that the campaign was
effective if the sample has a proportion which has heard of Pedal Pushers that is
greater than 0.375. Otherwise, the sample could too easily have come from a
population with a proportion equal to or less than 0.30.
alpha 0.1 0.05 0.03 0.01
df infinity 1.28 1.65 1.96 2.33

Exhibit 5: The bottom line of a t-table, showing the normal distribution

The final step is to compute the sample statistic and apply the decision rule. If the
sample statistic falls in the usual range, the data supports Ho:, and the world is
probably unsurprising and the campaign did not make any difference. If the
sample statistic is outside the usual range, the data supports Ha:, and the world is
a little surprising, the campaign affected how many people have heard of Pedal
Pushers. When Thad finally looks at the sample data, he finds that .39 of the
sample had heard of Pedal Pushers. The ad campaign was successful!

A STRAIGHT-FORWARD EXAMPLE: TESTING FOR "GOODNESS-OF-FIT"

There are many different types of hypothesis tests, including many that are used
more often than the "goodness-of- it" test. This test will be used to help introduce
hypothesis testing because it gives a clear illustration of how the strategy of
hypothesis testing is put to use, not because it is used frequently. Follow this

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example carefully, concentrating on matching the steps described in previous

sections with the steps described in this section; the arithmetic is not that
important right now.

We will go back to Ann Howard's problem with marketing "Easy Bounce" socks to
volleyball teams. Remember that Ann works for Foothills Hosiery, and she is
trying to market these sports socks to volleyball teams. She wants to send out
some samples to convince volleyball players that wearing "Easy Bounce" socks
will be more comfortable than wearing other socks. Her idea is to send out a
package of socks to volleyball coaches in the area, so the players can try them
out. She needs to include an assortment of sizes in those packages and is trying to
find out what sizes to include. The Production Department knows what mix of
sizes they currently produce, and Ann has collected a sample of 97 volleyball
players' sock sizes from nearby teams. She needs to test to see if her sample
supports the hypothesis that volleyball players have the same distribution of sock
sizes as Foothills is currently producing—is the distribution of volleyball players'
sock sizes a "good fit" to the distribution of sizes now being produced?

Ann's sample, a sample of the sock sizes worn by volleyball players, as a

frequency distribution of sizes:
size frequency
6 3
7 24
8 33
9 20
10 17

From the Production Department, Ann finds that the current relative frequency
distribution of production of "Easy Bounce" socks is like this:
size re. frequency
6 0.06
7 0.13
8 0.22
9 0.3
10 0.26

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11 0.03

If the world in "unsurprising", volleyball players will wear the socks sized in the
same proportions as other athletes, so Ann writes her hypotheses:

Ho: Volleyball players' sock sizes are distributed just like current production.
Ha: Volleyball players' sock sizes are distributed differently.

Ann's sample has n = 97. By applying the relative frequencies in the current
production mix, she can find out how many players would be "expected" to wear
each size if her sample was perfectly representative of the distribution of sizes in
current production. This would give her a description of what a sample from the
population in the null hypothesis would be like. It would show what a sample that
had a "very good fit" with the distribution of sizes in the population currently
being produced would look like.

Statisticians know the sampling distribution of a statistic which compares the

"expected" frequency of a sample with the actual, or "observed" frequency. For a
sample with c different classes (the sizes here), this statistic is distributed like 2
with c – 1 df. The χ2 is computed by the formula:

sample χ2 = Σ(O - E)2

E
where:
O = observed frequency in the sample in this class
E = expected frequency in the sample in this class.

The expected frequency, E, is found by multiplying the relative frequency of this

class in the Ho: hypothesized population by the sample size. This gives you the
number in that class in the sample if the relative frequency distribution across the
classes in the sample exactly matches the distribution in the population.

Notice that χ2 is always > 0 and equals 0 only if the observed is equal to the
expected in each class. Look at the equation and make sure that you see that a

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larger value of goes with samples with large differences between the observed
and expected frequencies.

Ann now needs to come up with a rule to decide if the data supports Ho: or Ha:.
She looks at the table and sees that for 5 df (there are 6 classes—there is an
expected frequency for size 11 socks), only 0.05 of samples drawn from a given
population will have a 2 > 11.07 and only .10 will have a 2 > 9.24. She decides
that it would not be all that surprising if volleyball players had a different
distribution of sock sizes than the athletes who are currently buying "Easy
Bounce", since all of the volleyball players are women and many of the current
customers are men. As a result, she uses the smaller .10 value of 9.24 for her
decision rule. Now she must compute her sample χ2. Ann starts by finding the
expected frequency of size 6 socks by multiplying the relative frequency of size 6
in the population being produced by 97, the sample size. She gets E = 0.06*97 =
5.82. She then finds O - E = 3 - 5.82 = -2.82, squares that and divides by 5.82,
eventually getting 1.37. She then realizes that she will have to do the same
computation for the other five sizes, and quickly decides that a spreadsheet will
make this much easier. Her spreadsheet looks like this:
sock size frequency in population relative expected (O - E)2/E
sample frequency frequency = 970C
6 3 0.06 5.82 1.3663918
7 24 0.13 12.61 10.288033
8 33 0.22 21.34 6.3709278
9 20 0.3 29.1 2.8457045
10 17 0.26 25.22 2.6791594
11 0 0.03 2.91 2.91
Χ2 =
97 26.460217

Exhibit 6: Ann's Excel sheet

Ann performs her third step, computing her sample statistic, using the
spreadsheet. As you can see, her sample χ2 = 26.46, which is well into the
"unusual" range which starts at 9.24 according to her decision rule. Ann has found
that her sample data supports the hypothesis that the distribution of sock sizes of

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volleyball players is different from the distribution of sock sizes that are currently
being manufactured. If Ann's employer, Foothill Hosiery, is going to market "Easy
Bounce" socks to volleyball players, they are going to have to send out packages
of samples that contain a different mix of sizes than they are currently making. If
"Easy Bounce" are successfully marketed to volleyball players, the mix of sizes
manufactured will have to be altered.

Now, review what Ann has done to test to see if the data in her sample supports
the hypothesis that the world is "unsurprising" and that volleyball players have
the same distribution of sock sizes as Foothill Hosiery is currently producing for
other athletes. The essence of Ann's test was to see if her sample χ2 could easily
have come from the sampling distribution of χ2's generated by taking samples
from the population of socks currently being produced. Since her sample χ2 would
be way out in the tail of that sampling distribution, she judged that her sample
data supported the other hypothesis, that there is a difference between volleyball
players and the athletes who are currently buying "Easy Bounce" socks.

Formally, Ann first wrote null and alternative hypotheses, describing the
population her sample comes from in two different cases. The first case is the null
hypothesis; this occurs if volleyball players wear socks of the same sizes in the
same proportions as Foothill is currently producing. The second case is the
alternative hypothesis; this occurs if volleyball players wear different sizes. After
she wrote her hypotheses, she found that there was a sampling distribution that
statisticians knew about that would help her choose between them. This is the χ2
distribution. Looking at the formula for computing 2 and consulting the tables,
Ann decided that a sample χ2 value greater than 9.24 would be unusual if her null
hypothesis was true. Finally, she computed her sample statistic, and found that
her χ2, at 26.46, was well above her cut-off value. Ann had found that the data in
her sample supported the alternative, Ha:, that the distribution of volleyball
players' sock sizes is different from the distribution that Foothill is currently
manufacturing. Acting on this finding, Ann will send a different mix of sizes in the
sample packages she sends volleyball coaches.

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TESTING POPULATION PROPORTIONS

As you learned in the chapter “Making estimates”, sample proportions can be
used to compute a statistic that has a known sampling distribution. Reviewing,
the z-statistic is:
z = p–π
√(π)(1 - π)/n
where: p = the proportion of the sample with a certain characteristic
π = the proportion of the population with that characteristic.

These sample z-statistics are distributed normally, so that by using the bottom
line of the t table, you can find what portion of all samples from a population with
a given population proportion, π, have z-statistics within different ranges. If you
look at the table, you can see that 0.95 of all samples from any population have a
z-statistics between ±1.96, for instance.

If you have a sample that you think is from a population containing a certain
proportion, π, of members with some characteristic, you can test to see if the
data in your sample supports what you think. The basic strategy is the same as
that explained earlier in this chapter and followed in the "goodness-of-fit"
example: (a) write two hypotheses, (b) find a sample statistic and sampling
distribution that will let you develop a decision rule for choosing between the two
hypotheses, and (c) compute your sample statistic and choose the hypothesis
supported by the data.

Foothill Hosiery recently received an order for children's socks decorated with
embroidered patches of cartoon characters. Foothill did not have the right
machinery to sew on the embroidered patches and contracted out the sewing.
While the order was filled and Foothill made a profit on it, the sewing contractor's
price seemed high, and Foothill had to keep pressure on the contractor to deliver
the socks by the date agreed upon. Foothill's CEO, John McGrath has explored
buying the machinery necessary to allow Foothill to sew patches on socks
themselves. He has discovered that if more than a quarter of the children's socks
they make are ordered with patches, the machinery will be a sound investment.

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Mr. McGrath asks Kevin Schmidt to find out if more than 25 per cent of children's
socks are being sold with patches.

Kevin calls the major trade organizations for the hosiery, embroidery, and
children's clothes industries, and no one can answer his question. Kevin decides it
must be time to take a sample and to test to see if more than 25 per cent of
children's socks are decorated with patches. He calls the sales manager at Foothill
and she agrees to ask her salespeople to look at store displays of children's socks,
counting how many pairs are displayed and how many of those are decorated
with patches. Two weeks later, Kevin gets a memo from the sales manager telling
him that of the 2,483 pairs of children's socks on display at stores where the
salespeople counted, 716 pairs had embroidered patches.

Kevin writes his hypotheses, remembering that Foothill will be making a decision
about spending a fair amount of money based on what he finds. To be more
certain that he is right if he recommends that the money be spent, Kevin writes
his hypotheses so that the "unusual" world would be the one where more than 25
per cent of children's socks are decorated:

Ho: πdecorated socks < 0.25

Ha:πdecorated socks > 0.25

When writing his hypotheses, Kevin knows that if his sample has a proportion of
decorated socks well below 0.25, he will want to recommend against buying the
machinery. He only wants to say the data supports the alternative if the sample
proportion is well above 0.25. To include the low values in the null hypothesis and
only the high values in the alternative, he uses a "one-tail" test, judging that the
data supports the alternative only if his z-score is in the upper tail. He will
conclude that the machinery should be bought only if his z-statistic is too large to
have easily have come from the sampling distribution drawn from a population
with a proportion of .25. Kevin will accept Ha : only if his z is large and positive.
Checking the bottom line of the t-table, Kevin sees that .95 of all z-scores are less
than 1.645. His rule is therefore to conclude that his sample data supports the
null hypothesis that 25 per cent or less of children's socks are decorated if his

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sample z is less than 1.645. If his sample z is greater than 1.645, he will conclude
that more than 25 per cent of children's socks are decorated and that Foothill
Hosiery should invest in the machinery needed to sew embroidered patches on
socks.

Using the data the salespeople collected, Kevin finds the proportion of the sample
that is decorated:
p = 716 = 0.288
2483
Using this value, he computes his sample z-statistic:
z = p–π
√(π)(1 - π)/n
= 0.288 – 0.25
(0.25)(1 – 0.25)/2483
= 0.0380 = 4.368
0.087
Because his sample z-score is larger than 1.645, it is unlikely that his sample z
came from the sampling distribution of z's drawn from a population where π <
0.25, so it is unlikely that his sample comes from a population with π < .25. Kevin
can tell John McGrath that the sample the sales people collected supports the
conclusion that more than 25 per cent of children's socks are decorated with
embroidered patches. John can feel comfortable making the decision to buy the
embroidery and sewing machinery.

SUMMARY
This chapter has been an introduction to hypothesis testing. You should be able to
see the relationship between the mathematics and strategies of hypothesis
testing and the mathematics and strategies of interval estimation. When making
an interval estimate, you construct an interval around your sample statistic based
on a known sampling distribution. When testing a hypothesis, you construct an
interval around a hypothesized population parameter, using a known sampling
distribution to determine the width of that interval. You then see if your sample
statistic falls within that interval to decide if your sample probably came from a

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population with that hypothesized population parameter. Hypothesis testing is a

very widely used statistical technique. It forces you to think ahead about what
you might find. By forcing you to think ahead, it often helps with decision-making
by forcing you to think about what goes into your decision. All of statistics
requires clear thinking, and clear thinking generally makes better decisions.
Hypothesis testing requires very clear thinking and often leads to better decision-
making.

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CHAPTER FIVE
THE T-TEST
In Chapter 3, a sampling distribution, the t-distribution, was introduced. In
Chapter 4 you learned how to use the t-distribution to make an important
inference, an interval estimate of the population mean. Here you will learn how
to use that same t-distribution to make more inferences, this time in the form of
hypothesis tests. Before we start to learn about those tests, a quick review of the
t-distribution is in order.

THE T-DISTRIBUTION
The t-distribution is a sampling distribution. You could generate your own t-
distribution with n-1 degrees of freedom by starting with a normal population,
choosing all possible samples of one size, n, computing a t-score for each sample:

t=x–μ
s
√n
where: x = the sample mean
μ = the population mean
s = the sample standard deviation
n = the size of the sample.

When you have all of the samples’ t-scores, form a relative frequency distribution
and you will have your t-distribution. Luckily, you do not have to generate your
own t-distributions because any statistics book has a table that shows the shape
of the t-distribution for many different degrees of freedom. Exhibit 1 reproduces
a portion of a typical t-table. See below.

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Exhibit 7: A portion of a typical t-table

When you look at the formula for the t-score, you should be able to see that the
mean t-score is zero because the mean of the x 's is equal to μ. Because most
samples have x's that are close to μ, most will have t-scores that are close to zero.
The t-distribution is symmetric, because half of the samples will have x 's greater
than μ, and half less. As you can see from the table, if there are 10 df, only 0.005
of the samples taken from a normal population will have a t-score greater than
+3.17. Because the distribution is symmetric, 0.005 also have a t-score less than -
3.17. Ninety-nine per cent of samples will have a t-score between ±3.17. Like the
example in Exhibit 1, most t-tables have a picture showing what is in the body of
the table. In Exhibit 1, the shaded area is in the right tail, the body of the table

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shows the t-score that leaves the ‘α’ in the right tail. This t-table also lists the two-
tail α above the one-tail where is has p = .xx. For 5 df, there is a .05 probability
that a sample will have a t-score greater than 2.02, and a 0.10 probability that a
sample will have a t score either > +2.02 or < -2.02.

There are other sample statistics which follow this same shape and which can be
used as the basis for different hypothesis tests. You will see the t-distribution
used to test three different types of hypotheses in this chapter and that the t-
distribution can be used to test other hypotheses in later chapters.

Though t-tables show how the sampling distribution of t-scores is shaped if the
original population is normal, it turns out that the sampling distribution of t-
scores is very close to the one in the table even if the original population is not
quite normal, and most researchers do not worry too much about the normality
of the original population. An even more important fact is that the sampling
distribution of t-scores is very close to the one in the table even if the original
population is not very close to being normal as long as the samples are large. This
means that you can safely use the t-distribution to make inferences when you are
not sure that the population is normal as long as you are sure that it is bell-
shaped. You can also make inferences based on samples of about 30 or more
using the t-distribution when you are not sure if the population is normal. Not
only does the t-distribution describe the shape of the distributions of a number of
sample statistics, it does a good job of describing those shapes when the samples
are drawn from a wide range of populations, normal or not.

A SIMPLE TEST: DOES THIS SAMPLE COME FROM A POPULATION WITH THAT
MEAN?
Imagine that you have taken all of the samples with n=10 from a population that
you knew the mean of, found the t-distribution for 9 df by computing a t-score for
each sample and generated a relative frequency distribution of the t's. When you
were finished, someone brought you another sample (n=10) wondering if that
new sample came from the original population. You could use your sampling
distribution of t's to test if the new sample comes from the original population or
not. To conduct the test, first hypothesize that the new sample comes from the

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original population. With this hypothesis, you have hypothesized a value for μ,
the mean of the original population, to use to compute a t-score for the new
sample. If the t for the new sample is close to zero—if the t-score for the new
sample could easily have come from the middle of the t-distribution you
generated—your hypothesis that the new sample comes from a population with
the hypothesized mean seems reasonable and you can conclude that the data
supports the new sample coming from the original population. If the t-score from
the new sample was far above or far below zero, your hypothesis that this new
sample comes from the original population seems unlikely to be true, for few
samples from the original population would have t-scores far from zero. In that
case, conclude that the data gives support to the idea that the new sample comes
from some other population.

This is the basic method of using this t-test. Hypothesize the mean of the
population you think a sample might come from. Using that mean, compute the t-
score for the sample. If the t-score is close to zero, conclude that your hypothesis
was probably correct and that you know the mean of the population from which
the sample came. If the t-score is far from zero, conclude that your hypothesis is
incorrect, and the sample comes from a population with a different mean.

Once you understand the basics, the details can be filled in. The details of
conducting a "hypothesis test of the population mean", testing to see if a sample
comes from a population with a certain mean—are of two types. The first type
concerns how to do all of this in the formal language of statisticians. The second
type of detail is how to decide what range of t-scores implies that the new sample
comes from the original population.

You should remember from the last chapter that the formal language of
hypothesis testing always requires two hypotheses. The first hypothesis is called
the "null hypothesis", usually denoted Ho:. It states that there is no difference
between the mean of the population from which the sample is drawn and the
hypothesized mean. The second is the "alternative hypothesis", denoted H1: or
Ha: It states that the mean of the population from which the sample comes is
different from the hypothesized value. If your question is simply "does this

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sample come from a population with this mean?", your Ha: is simply the
hypothesized value . If your question is "does this sample come from a population
with a mean greater than some value”, then your Ha: becomes μ < the
hypothesized value.

The other detail is deciding how "close to zero" the sample t-score has to be
before you conclude that the null hypothesis is probably correct. How close to
zero the sample t-score must be before you conclude that the data supports Ho:
depends on the df and how big a chance you want to take that you will make a
mistake. If you decide to conclude that the sample comes from a population with
the hypothesized mean only if the sample t is very, very close to zero, there are
many samples actually from the population that will have t-scores that would lead
you to believe they come from a population with some other mean—it would be
easy to make a mistake and conclude that these samples come from another
population. On the other hand, if you decide to accept the null hypothesis even if
the sample t-score is quite far from zero, you will seldom make the mistake of
concluding that a sample from the original population is from some other
population, but you will often make another mistake— concluding that samples
from other populations are from the original population. There are no hard rules
for deciding how much of which sort of chance to take. Since there is a trade-off
between the chance of making the two different mistakes, the proper amount of
risk to take will depend on the relative costs of the two mistakes. Though, there is
no firm basis for doing so, many researchers use a 5 per cent chance of the first
sort of mistake as a default. The level of chance of making the first error is usually
called "alpha" (α) and the value of alpha chosen is usually written as a decimal
fraction—taking a 5 per cent chance of making the first mistake would be stated
as " α = 0.05 ". When in doubt, use α = 0.05.

If your alternative hypothesis is "not equal to", you will conclude that the data
supports Ha: if your sample t-score is either well below or well above zero and
you need to divide α between the two tails of the t-distribution. If you want to
use α = 0.05, you will support Ha: if the t is in either the lowest 0.025 or the
highest 0.025 of the distribution. If your alternative is "greater than", you will

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conclude that the data supports Ha: only if the sample t-score is well above zero.
So, put all of your α in the right tail. Similarly, if your alternative is "less than", put
the whole α in the left tail.

The table itself can be confusing even after you know how many degrees of
freedom you have and if you want to split your α between the two tails or not.
Adding to the confusion, not all t-tables look exactly the same. Look at the typical
t-table above and notice that it has three parts: column headings of decimal
fractions, row headings of whole numbers, and a body of numbers generally with
values between 1 and 3. The column headings are labeled p or "area in the right
tail," and sometimes are labeled “α.” The row headings are labeled "df," but are
sometimes labeled “ν” or "degrees of freedom". The body is usually left unlabeled
and it shows the t-score which goes with the "α" and "degrees of freedom" of
that column and row. These tables are set up to be used for a number of different
statistical tests, so they are presented in a way that is a compromise between
ease of use in a particular situation and the ability to use the same table for a
wide variety of tests.

In order to use the table to test to see if "this sample comes from a population
with a certain mean" choose α and find the number of degrees of freedom. The
number of degrees of freedom in a test involving one sample mean is simply the
size of the sample minus one (df = n-1). The α you choose may not be the α in the
column heading. The column headings show the "right tail areas"—the chance
you'll get a t-score larger than the one in the body of the table. Assume that you
had a sample with ten members and chose α = .05. There are nine degrees of
freedom, so go across the 9 df row to the .025 column since this is a two-tail test,
and find the t-score of 2.262. This means that in any sampling distribution of t-
scores, with samples of ten drawn from a normal population, only 2.5 per cent
(0.025) of the samples would have t-scores greater than 2.262—any t-score
greater than 2.262 probably occurs because the sample is from some other
population with a larger mean. Because the t-distributions are symmetrical, it is
also true that only 2.5 per cent of the samples of ten drawn from a normal

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population will have t-scores less than -2.262. Putting the two together, 5 per
cent of the t-scores will have an absolute value greater the 2.262. So if you choose
α = 0.05, you will probably be using a t-score in the 0.025 column. The picture
that is at the top of most t-tables shows what is going on. Look at it when in
doubt.

LaTonya Williams is the plant manager for Eileen's Dental Care Company (EDC)
which makes dental floss. EDC has a good, stable work force of semi-skilled
workers who work packaging floss, paid by piece-work, and the company wants to
make sure that these workers are paid more than the local average wage. A
recent report by the local Chamber of Commerce shows an average wage for
"machine operators" of USD 8.71. LaTonya needs to decide if a raise is needed to
keep her workers above the average. She takes a sample of workers, pulls their
work reports, finds what each one earned last week and divides their earnings by
the hours they worked to find average hourly earnings.

That data appears below:

Smith 9.01
Wilson 8.67
Peterson 8.90
Jones 8.45
Gordon 8.88
McCoy 9.13
Bland 8.77

LaTonya wants to test to see if the mean of the average hourly earnings of her
workers is greater than USD 8.71. She wants to use a one-tail test because her
question is "greater than" not "unequal to". Her hypotheses are:

Ho: μ < 8.71 and Ha: μ >8.71

As is usual in this kind of situation, LaTonya is hoping that the data supports Ha :,
but she wants to be confident that it does before she decides her workers are
earning above average wages. Remember that she will compute a t-score for her
sample using USD 8.71 for μ. If her t-score is negative or close to zero, she will
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conclude that the data supports Ho:. Only if her t-score is large and positive will
she go with Ha:. She decides to use α = 0.025 because she is unwilling to take
much risk of saying the workers earn above average wages when they really do
not. Because her sample has n = 7, she has 6 df. Looking at the table, she sees
that the data will support Ha:, the workers earn more than average, only if the
sample t-score is greater than 2.447.

Finding the sample mean and standard deviation, x=$8.83 and s = .225, LaTonya
computes her sample t-score:

Because her sample t is not greater than +2.447, LaTonya concludes that she will
have to raise the piece rates EDC pays in order to be really sure that mean hourly
earnings are above the local average wage.

If LaTonya had simply wanted to know if EDC's workers earned the same as other
workers in the area, she would have used a two-tail test. In that case her
hypotheses would have been:

Ho: μ = 8.71 and Ha: μ ≠ 8.71

Using a = 0.10, LaTonya would split the 0.10 between the two tails since the data
supports Ha: if the sample t-score is either large and negative or large and
positive. Her arithmetic is the same, her sample t-score is still 1.41, but she now
will decide that the data supports Ha : only if it outside ±1.943.

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AN ALTERNATIVE TO CHOOSING AN α
Many researchers now report how unusual the sample t-score would be if the null
hypothesis was true rather than choosing an α and stating whether the sample t-
score implies the data supports one or the other of the hypotheses based on that
α. When a researcher does this, he is essentially letting the reader of his report
decide how much risk to take of making which kind of mistake. There are even
two ways to do this. If you look at the portion of the t-table reproduced above,
you will see that it is not set up very well for this purpose; if you wanted to be
able to find out what part of a t-distribution was above any t-score, you would
need a table that listed many more t-scores. Since the t-distribution varies as the
df changes, you would really need a whole series of t-tables, one for each df.

The old-fashioned way of making the reader decide how much of which risk to
take is to not state an α in the body of your report, but only give the sample t-
score in the main text. To give the reader some guidance, you look at the usual t-
table and find the smallest α, say it is .01, that has a t-value less than the one you
computed for the sample. Then write a footnote saying "the data supports the
alternative hypothesis for any α > 0.01 ".

The more modern way uses the capability of a computer to store lots of data.
Many statistical software packages store a set α detailed t-tables, and when a t-
score is computed, the package has the computer look up exactly what
proportion of samples would have t-scores larger than the one for your sample.
Exhibit 2 shows the computer output for LaTonya's problem from a typical
statistical package. Notice that the program gets the same t-score that LaTonya
did, it just goes to more decimal places. Also notice that it shows something called
the "P value". The P value is the proportion of t-scores that are larger than the
one just computed. Looking at the example, the computed t statistic is 1.41188
and the P value is 0.1038. This means that if there are 6 df, a little over 10 per
cent of samples will have a t-score greater than 1.41188. Remember that LaTonya
used an α = 0.025 and decided that the data supported Ho:, the P value of .1038
means that Ho : would be supported for any α less than 0.1038.

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Since LaTonya had used α = 0.025, this p value means she does not find support
for Ho:.
Hypothesis test: Mean
Null Hypothesis: Mean = 8.71
Alternative: greater than
Computed t statistic = 1.41188
P value = 0.1038

Exhibit 8: Output from typical statistical software for LaTonya's problem.

The P-value approach is becoming the preferred way to The P-value presents
research results to audiences of professional researchers. Most of the statistical
research conducted for a business firm will be used directly for decision-making or
presented to an audience of executives to aid them in making a decision. These
audiences will generally not be interested in deciding for themselves which
hypothesis the data supports. When you are making a presentation of results to
your boss, you will want to simply state which hypothesis the evidence supports.
You may decide by using either the traditional α approach or the more modern P-
value approach, but deciding what the evidence says is probably your job.

ANOTHER T-TEST: DO THESE TWO (INDEPENDENT) SAMPLES COME FROM

POPULATIONS WITH THE SAME MEAN?

One of the other statistics that has a sampling distribution that follows the t-
distribution is the difference between two sample means. If samples of one size
(n1) are taken from one normal population and samples of another size (n2) are
taken from another normal population (and the populations have the same
standard deviation), then a statistic based on the difference between the sample
means and the difference between the population means is distributed like t with
n1 + n2 − 2 degrees of freedom. These samples are independent because the
members in one sample do not affect which members are in the other sample.
You can choose the samples independently of each other, and the two samples
do not need to be the same size. The t- statistic is:

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where: xi = the mean of sample i

i = the mean of population i
s2 = the pooled variance
ni = the size of sample i.

The usual case is to test to see if the samples come from populations with the
same mean, the case where μ1− μ2 = 0. The pooled variance is simply a weighted
average of the two sample variances, with the weights based on the sample sizes.
This means that you will have to calculate the pooled variance before you
calculate the t-score. The formula for pooled variance is:

To use the pooled variance t-score, it is necessary to assume that the two
populations have equal variances. If you are wondering about why statisticians
make a strong assumption in order to use such a complicated formula, it is
because the formula that does not need the assumption of equal variances is
even more complicated, and reduces the degrees of freedom in the final statistic.
In any case, unless you have small samples, the amount of arithmetic needed
means that you will probably want to use a statistical software package for this
test. You should also note that you can test to see if two samples come from
populations that are any hypothesized distance apart by setting μ1− μ2 equal to
that distance.

An article in U. S. News and World Report (Nov. 1993) lamenting grade inflation in
colleges states that economics grades have not been inflated as much as most
other grades. Nora Alston chairs the Economics Department at Oaks College, and
the dean has sent her a copy of the article with a note attached saying "Is this

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true here at Oaks? Let me know." Dr. Alston is not sure if the Dean would be
happier if economics grades were higher or lower than other grades, but the
article claims that economics grades are lower. Her first stop is the Registrar's
office.

She as the clerk in that office picked a sample of 10 class grade reports from
across the college spread over the past three semesters. She also has the clerk
pick out a sample of 10 reports for economics classes. She ends up with a total of
38 grades for economics classes and 51 grades for other classes. Her hypotheses
are:
Ho: μecon− μother ≥ 0
Ha: μecon − μother < 0

She decides to use μ = 0.05.

This is a lot of data, and Dr. Alston knows she will want to use the computer to
help. She initially thought she would use a spreadsheet to find the sample means
and variances, but after thinking a minute, she decided to use a statistical
software package. The one she is most familiar with is one called SAS. She loads
SAS onto her computer, enters the data, and gives the proper SAS commands. The
computer gives her the output in Exhibit 3.
The SAS System
TTFST Procedure
Variable: GRADE
Dept N Mean Dev Std Error Minimum Maximum
Econ 38 2.28947 1.01096 0.16400 0 4.00000

Variance T DF Prob>[T]
Unequal -2.3858 85.1 0.0193
Equal -2.3345 87.0 0.0219
For HO: Variances are equal, F=1.35 DF=[58.37] Prob>F=0.3485

Exhibit 9: SAS system software output for Dr. Alston's grade study
Dr. Alston has 87df, and has decided to use a one-tailed, left tail test with α =
0.05. She goes to her t-table and finds that 87df does not appear, the table

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skipping from 60 to 120df. There are two things she could do. She could try to
interpolate the t-score that leaves 0.05 in the tail with 87df, or she could choose
between the t-value for 60 and 120 in a conservative manner. Using the
conservative choice is the best initial approach, and looking at her table she sees
that for 60df 0.05 of t-scores are less than -1.671, and for 120df, 0.05 are less
than -1.658. She does not want to conclude that the data supports economics
grades being lower unless her sample t-score is far from zero, so she decides that
she will accept Ha : if her sample t is to the left of -1.671. If her sample t happens
to be between -1.658 and -1.671, she will have to interpolate.

Looking at the SAS output, Dr. Alston sees that her t-score for the equal variances
formula is -2.3858, which is well below -1.671. She concludes that she will tell the
dean that economics grades are lower than grades elsewhere at Oaks College.

Notice that SAS also provides the t-score and df for the case where equal
variances are not assumed in the "unequal" line. SAS also provides a P value, but
it is for a two-tail test because it gives the probability that a ‘t’ with a larger
absolute value, >|T|, occurs. Be careful when using the p values from software:
notice if they are one-tail or two-tail p-values before you make your report!

A THIRD T-TEST: DO THESE (PAIRED) SAMPLES COME FROM THE

SAMPLE POPULATION?
Managers are often interested in "before and after" questions. As a manager or
researcher you will often want to look at "longitudinal" studies, studies that ask
about what has happened to an individual as a result of some treatment or across
time. Are they different after than they were before? For example, if your firm
has conducted a training program you will want to know if the workers who
participated became more productive. If the work area has been re-arranged, do
workers produce more than before? Though you can use the difference of means
test developed earlier, this is a different situation. Earlier, you had two samples
that were chosen independently of each other; you might have a sample of
workers who received the training and a sample of workers who had not. The
situation for this test is different; now you have a sample of workers and for each

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worker you have measured their productivity before the training or re-
arrangement of the work space and you have measured their productivity after.
For each worker you have a pair of measures, before and after. Another way to
look at this is that for each member of the sample you have a difference between
before and after.

You can test to see if these differences equal zero, or any other value, because a
statistic based on these differences follows the t-distribution for n-1 df when you
have n matched pairs. That statistic is:

where: D = the mean of the differences in the pairs in the sample

δ = the mean of the differences in the pairs in the population
SD = the standard deviation of the differences in the sample
n = the number of pairs in the sample.

It is a good idea to take a minute and figure out this formula. There are paired
samples and the differences in those pairs, the D's, are actually a population. The
mean of those D's is δ. Any sample of pairs will also yield a sample of D's. If those
D's are normally distributed, then the t-statistic in the formula above will follow
the t-distribution. If you think of the D's as the same as x's in the t-formula at the
beginning of the chapter, and think of δ as the population mean, you should
realize that this formula is really just that basic t formula.

Lew Podolsky is division manager for Dairyland Lighting, a manufacturer of

outdoor lights for parking lots, barnyards, and playing fields. Dairyland Lighting
organizes its production work by teams. The size of the team varies somewhat
with the product being assembled, but there are usually three to six in a team,
and a team usually stays together for a few weeks assembling the same product.
Dairyland Lighting has a branch plant in the US state of Arizona that serves their
west coast customers and Lew has noticed that productivity seems to be lower in

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Arizona during the summer, a problem that does not occur at the main plant in
the US city of Green Bay, Wisconsin. After visiting the Arizona plant in July,
August, and November, and talking with the workers during each visit, Lew
suspects that the un-air conditioned plant just gets too hot for good productivity.
Unfortunately, it is difficult to directly compare plant-wide productivity at
different times of the year because there is quite a bit of variation in the number
of employees and product mix across the year. Lew decides to see if the same
workers working on the same products are more productive on cool days than hot
days by asking the local manager, Dave Mueller, to find a cool day and a hot day
from last fall and choose ten work teams who were assembling the same products
on the two days. Dave sends Lew the following data:
Team leader Output—cool day Output—hot day Difference (cool-hot)
October 14 October 20
Martinez 153 149 4
McAlan 167 170 -3
Wilson 164 155 9
Burningtree 183 179 4
Sanchez 177 167 10
Lilly 162 150 12
Cantu 165 158 7

Exhibit 10: Lew Podolsky's data for the air-conditioning decision

Lew decides that if the data support productivity being higher of cool days, he will
call in a heating/air-conditioning contractor to get some cost estimates so that he
can decide if installing air conditioning in the Arizona plant is cost-effective.
Notice that he has matched pairs data--for each team he has production on
October 14, a cool day, and on October 20, a hot day. His hypotheses are:

Ho: δ < 0 and Ha: δ >0

Using a = 0.05 in this one-tail test, Lew will decide to call the engineer if his
sample t-score is greater than 1.943, since there are 6df. This sample is small, so it
is just as easy to do the computations on a calculator. Lew finds:

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and his sample t-score is:

Because his sample t-score is greater than 1.943, Lew gets out the telephone
book and looks under air-conditioning contractors to call for some estimates.

SUMMARY
The t-tests are commonly used hypothesis tests. Researchers often find
themselves in situations where they need to test to see if a sample comes from a
certain population, and therefore test to see if the sample probably came from a
population with that certain mean. Even more often, researchers will find
themselves with two samples and want to know if the samples come from the
same population, and will test to see if the samples probably come from
populations with the same mean. Researchers also frequently find themselves
asking if two sets of paired samples have equal means. In any case, the basic
strategy is the same as for any hypothesis test. First, translate the question into
null and alternative hypotheses, making sure that the null hypothesis includes an
equal sign. Second, choose α. Third, compute the relevant statistics, here the t-
score, from the sample or samples. Fourth, using the tables, decide if the sample
statistic leads you to conclude that the sample came from a population where the
null hypothesis is true or a population where the alternative is true.

The t-distribution is also used in testing hypotheses in other situations since there
are other sampling distributions with the same t-distribution shape. So,
remember how to use the t-tables for later chapters.

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Statisticians have also found how to test to see if three or more samples come
from populations with the same mean. That technique is known as "one-way
analysis of variance". The approach used in analysis of variance is quite different
from that used in the t-test. It will be covered in chapter, "The F-test and One-
Way ANOVA".

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CHAPTER SIX
F-TEST AND ONE-WAY ANOVA
Years ago, statisticians discovered that when pairs of samples are taken from a
normal population, the ratios of the variances of the samples in each pair will
always follow the same distribution. Not surprisingly, over the intervening years,
statisticians have found that the ratio of sample variances collected in a number
of different ways follow this same distribution, the F-distribution. Because we
know that sampling distributions of the ratio of variances follow a known
distribution, we can conduct hypothesis tests using the ratio of variances.

The F-statistic is simply:

where si2 is the variance of sample i. Remember that the sample variance is:

Think about the shape that the F-distribution will have. If s1 2 and s2 2 come from
samples from the same population, then if many pairs of samples were taken and
F-scores computed, most of those F-scores would be close to one. All of the F-
scores will be positive since variances are always positive—the numerator in the
formula is the sum of squares, so it will be positive, the denominator is the
sample size minus one, which will also be positive. Thinking about ratios requires
some care. If s1 2 is a lot larger than s2 2 , F can be quite large. It is equally
possible for s2 2 to be a lot larger than s1 2 , and then F would be very close to
zero. Since F goes from zero to very large, with most of the values around one, it
is obviously not symmetric; there is a long tail to the right, and a steep descent to
zero on the left.

There are two uses of the F-distribution which will be discussed in this chapter.
The first is a very simple test to see if two samples come from populations with
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the same variance. The second is one-way Analysis Of Variance (ANOVA) which
uses the F-distribution to test to see if three or more samples come from
populations with the same mean.

A SIMPLE TEST: DO THESE TWO SAMPLES COME FROM POPULATIONS

WITH THE SAME VARIANCE?
Because the F-distribution is generated by drawing two samples from the same
normal population, it can be used to test the hypothesis that two samples come
from populations with the same variance. You would have two samples (one of
size n1 and one of size n2), and the sample variance from each. Obviously, if the
two variances are very close to being equal the two samples could easily have
come from populations with equal variances. Because the F-statistic is the ratio of
two sample variances, when the two sample variances are close to equal, the F-
score is close to one. If you compute the F-score, and it is close to one, you accept
your hypothesis that the samples come from populations with the same variance.

This is the basic method of the F-test. Hypothesize that the samples come from
populations with the same variance. Compute the F-score by finding the ratio of
the sample variances. If the F-score is close to one, conclude that your hypothesis
is correct and that the samples do come from populations with equal variances. If
the F-score is far from one, then conclude that the populations probably have
different variances.

The basic method must be fleshed out with some details if you are going to use
this test at work. There are two sets of details: first, formally writing hypotheses,
and second, using the F-distribution tables so that you can tell if your F-score is
close to one or not. Formally, two hypotheses are needed for completeness. The
first is the null hypothesis that there is no difference (hence "null"). It is usually
denoted as Ho:. The second is that there is a difference, and it is called the
alternative, and is denoted H1: or Ha:.

Using the F-tables to decide how close to one is close enough to accept the null
hypothesis (truly formal statisticians would say "fail to reject the null"), is fairly

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tricky, for the F-distribution tables are fairly tricky. Before using the tables, the
researcher must decide how much chance he or she is willing to take that the null
will be rejected when it is really true. The usual choice is 5 per cent, or as
statisticians say, " α = 0.05 ". If more, or less, chance is wanted, α can be varied.
Choose your ‘α’ and go to the F-tables. First notice that there are a number of F-
tables, one for each of several different levels of α (or at least a table for each two
α's with the F-values for one α in bold type and the values for the other in regular
type). There are rows and columns on each F-table, and both are for degrees of
freedom. Because two separate samples are taken to compute an F-score and the
samples do not have to be the same size, there are two separate degrees of
freedom—one for each sample. For each sample, the number of degrees of
freedom is n-1, one less than the sample size. Going to the table, how do you
decide which sample's degrees of freedom (df) is for the row and which is for the
column? While you could put either one in either place, you can save yourself a
step if you put the sample with the larger variance (not necessarily the larger
sample) in the numerator, and then that sample's df determines the column and
the other sample's df determines the row. The reason that this saves you a step is
that the tables only show the values of F that leave α in the right tail where F > 1,
the picture at the top of most F-tables shows that. Finding the critical F value for
left tails requires another step, which is outlined in the box below.

TABLE 1: F DISTRIBUTION α = 0.05 (ROWS ARE DF IN THE NUMERATOR,

COLUMNS ARE DF IN DENOMINATOR)

df 10 20 30 120 infinity
10 2.98 2.77 2.70 2.58 2.54
20 2.35 2.12 2.04 1.90 1.84
30 2.16 1.93 1.84 1.68 1.62
120 1.91 1.66 1.55 1.35 1.25
infinity 1.83 1.57 1.46 1.22 1.00

F-tables are virtually always printed as "one-tail" tables, showing the critical F-
value that separates the right tail from the rest of the distribution. In most
statistical applications of the F-distribution, only the right tail is of interest,

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because most applications are testing to see if the variance from a certain source
is greater than the variance from another source, so the researcher is interested
in finding if the F-score is greater than one. In the test of equal variances, the
researcher is interested in finding out if the F-score is close to one, so that either a
large F-score or a small F-score would lead the researcher to conclude that the
variances are not equal. Because the critical F-value that separates the left tail
from the rest of the distribution is not printed, and not simply the negative of the
printed value, researchers often simply divide the larger sample variance by the
smaller sample variance, and use the printed tables to see if the quotient is
"larger than one", effectively rigging the test into a one-tail format. For purists,
and occasional instances, the left tail critical value can be computed fairly easily.

The left tail critical value for x, y degrees of freedom (df) is simply the inverse of
the right tail (table) critical value for y, x df. Looking at an F-table, you would see
that the F-value that leaves α=.05 in the right tail when there are 10, 20 df is F =
2.35. To find the F-value that leaves .05 in the left tail with 10, 20 df, look up
F = 2.77 for α = 0.05 , 20, 10 df. Divide one by 2.77, finding .36. That means that 5
per cent of the F-distribution for 10, 20 df is below the critical value of .36, and 5
per cent is above the critical value of 2.35.

Putting all of this together, here is how to conduct the test to see if two samples
come from populations with the same variance. First, collect two samples and
compute the sample variance of each, s12 and s22. Second, write your hypotheses
and choose α. Third find the F-score from your samples, dividing the larger s2 by
the smaller so that F > 1. Fourth, go to the tables, find the table for α/2, and find
the critical (table) F-score for the proper degrees of freedom (n-1 and n-1).
Compare it to the samples' F-score. If the samples' F is larger than the critical F,
the samples' F is not "close to one", and Ha : the population variances are not
equal, is the best hypothesis. If the samples' F is less than the critical F, Ho :, that
the population variances are equal should be accepted.

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AN EXAMPLE
A young banker has recently been promoted and made the manager of her own
branch. After a few weeks, she has discovered that maintaining the correct
number of tellers seems to be more difficult than it was when she was assistant
manager of a larger branch. Some days, the lines are very long, and other days,
the tellers seem to have little to do. She wonders if the number of customers at
her new branch is simply more variable than the number of customers at the
branch where she used to work. Because tellers work for a whole day or half a
day (morning or afternoon), she collects the following data on the number of
transactions in a half day from her branch and the branch where she used too
work:
Her branch: 156, 278, 134, 202, 236, 198, 187, 199, 143, 165, 223
Old branch: 345, 332, 309, 367, 388, 312, 355, 363, 381
She hypothesizes:

Ho: σh2 = σ02

Ho: σh2 = σ02
She decides to use α = 0.05. She computes the sample variances and finds:

sh2 = 2027.1
so2 =795.2

Following the rule to put the larger variance in the numerator, so that she saves a
step, she finds:

From the table, (remembering to use the α = 0.025 table because the table is one-
tail and the test is two-tail) she finds that the critical F for 10, 8 df is 4.30. Because
her F-score is less than the critical score, she concludes that her F-score is "close
to one", and that the variance of customers in her office is the same as it was in
the old office. She will need to look further to solve her staffing problem.

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ANALYSIS OF VARIANCE (ANOVA)

THE IMPORTANCE OF ANOVA
A more important use of the F-distribution is in analyzing variance to see if three
or more samples come from populations with equal means. This is an important
statistical test, not so much because it is frequently used, but because it is a
bridge between univariate statistics and multivariate statistics and because the
strategy it uses is one which is used in many multivariate tests and procedures.

ONE-WAY ANOVA: DO THESE THREE (OR MORE) SAMPLES ALL COME FROM
POPULATIONS WITH THE SAME MEAN?

This seems wrong—we will test a hypothesis about means by "analyzing

variance". It is not wrong, but rather a really clever insight that some statistician
had years ago. This idea—looking at variance to find out about differences in
means—is the basis for much of the multivariate statistics used by researchers
today. The ideas behind ANOVA are used when we look for relationships between
two or more variables, the big reason we use multivariate statistics.

Testing to see if three or more samples come from populations with the same
mean can often be a sort of multivariate exercise. If the three samples came from
three different factories or were subject to different treatments, we are
effectively seeing if there is a difference in the results because of different
factories or treatments—is there a relationship between factory (or treatment)
and the outcome?

Think about three samples. A group of x's have been collected, and for some good
reason (other than their x value) they can be divided into three groups. You have
some x's from group (sample) 1, some from group (sample) 2, and some from
group (sample) 3. If the samples were combined, you could compute a "grand
mean" and a "total variance" around that grand mean. You could also find the
mean and (sample) "variance within" each of the groups. Finally, you could take
the three sample means, and find the "variance between" them. ANOVA is based
on analyzing where the "total" variance comes from. If you picked one x, the

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source of its variance, its distance from the grand mean would have two parts: (1)
how far it is from the mean of its sample, and (2) how far its sample's mean is
from the grand mean. If the three samples really do come from populations with
different means, then for most of the x's, the distance between the sample mean
and the grand mean will probably be greater than the distance between the x and
its group mean. When these distances are gathered together and turned into
variances, you can see that if the population means are different, the variance
between the sample means is likely to be greater than the variance within the
samples.

By this point in the book, it should not surprise you to learn that statisticians have
found that if three or more samples are taken from a normal population, and the
variance between the samples is divided by the variance within the samples, a
sampling distribution formed by doing that over and over will have a known
shape. In this case, it will be distributed like F with m - 1, n - m df, where m is the
number of samples and n is the size of the m samples altogether. "Variance
between" is found by:

where xj is the mean of sample j, and x is the "grand mean".

The numerator of the variance between is the sum of the squares of the distance
between each x's sample mean and the grand mean. It is simply a summing of one
of those sources of variance across all of the observations.

The "variance within" is found by:

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Double sums need to be handled with care. First (operating on the "inside" or
second sum sign) find the mean of each sample and the sum of the squares of the
distances of each x in the sample from its mean. Second (operating on the
"outside" sum sign), add together the results from each of the samples.

The strategy for conducting a one-way analysis of variance is simple. Gather m

samples. Compute the variance between the samples, the variance within the
samples, and the ratio of between to within, yielding the F-score. If the F-score is
less than one, or not much greater than one, the variance between the samples is
no greater than the variance within the samples and the samples probably come
from populations with the same mean. If the F-score is much greater than one,
the variance between is probably the source of most of the variance in the total
sample, and the samples probably come from populations with different means.

The details of conducting a one-way ANOVA fall into three categories: (1) writing
hypotheses, (2) keeping the calculations organized, and (3) using the F-tables. The
null hypothesis is that all of the population means are equal, and the alternative is
that not all of the means are equal. Quite often, though two hypotheses are really
needed for completeness, only Ho: is written:

Ho: m1 = m2 = ... = mm

Keeping the calculations organized is important when you are finding the variance
within. Remember that the variance within is found by squaring, and then
summing, the distance between each observation and the mean of its sample.
Though different people do the calculations differently, I find the best way to
keep it all straight is to find the sample means, find the squared distances in each
of the samples, and then add those together. It is also important to keep the
calculations organized in the final computing of the F-score. If you remember that
the goal is to see if the variance between is large, then its easy to remember to
divide variance between by variance within.

Using the F-tables is the second detail. Remember that F-tables are one-tail tables
and that ANOVA is a one-tail test. Though the null hypothesis is that all of the
means are equal, you are testing that hypothesis by seeing if the variance
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between is less than or equal to the variance within. The number of degrees of
freedom is m-1, n-m, where m is the number of samples and n is the total size of
all the samples together.

AN EXAMPLE
The young bank manager in the last example is still struggling with finding the
best way to staff her branch. She knows that she needs to have more tellers on
Fridays than on other days, but is trying to find if the need for tellers is constant
across the rest of the week. She collects data for the number of transactions each
day for two months.

Here is her data:

Mondays: 276, 323, 298, 256, 277, 309, 312, 265, 311
Tuesdays: 243, 279, 301, 285, 274, 243, 228, 298, 255
Wednesdays: 288, 292, 310, 267, 243, 293, 255, 273
Thursdays: 254, 279, 241, 227, 278, 276, 256, 262

She tests the null hypothesis:

Ho: mm = mtu = mw =mth

and decides to use .05 . She finds:

m = 291.8
tu = 267.3
w = 277.6
th = 259.1

and the grand mean, = 274.3

She computes variance within:

[(276-291.8)2+(323-291.8)2+...+(243-267.6)2+...+(288-277.6)2+...+(254-
259.1)2]/[34-4]=15887.6/30=529.6

Then she computes variance between:

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[9(291.8-274.3)2+9(267.3-274.3)2+8(277.6-274.3)2+8(259.1-274.3)2]/[4-1]
= 5151.8/3 = 1717.3

She computes her F-score:

Consulting the F-tables for .05 and 3, 30 df, she finds that the critical F-value is
2.92. Because her F-score is larger than the critical F-value, she concludes that the
mean number of transactions is not the equal on different days of the week. She
will want to adjust her staffing so that she has more tellers on some days than on
others.
SUMMARY
The F-distribution is the sampling distribution of the ratio of the variances of two
samples drawn from a normal population. It is used directly to test to see if two
samples come from populations with the same variance. Though, you will
occasionally see it used to test equality of variances, the more important use is in
analysis of variance, (ANOVA). ANOVA, at least in its simplest form as presented in
this chapter, is used to test to see if three or more samples come from
populations with the same mean. By testing to see if the variance of the
observations comes more from the variation of each observation from the mean
of its sample or from the variation of the means of the samples from the grand
mean, ANOVA tests to see if the samples come from populations with equal
means or not.

CONNECTIONS
ANOVA has more elegant forms that appear in later chapters. It also forms the
basis for regression analysis, a statistical technique that has many business
applications; it is covered in later chapters. The F-tables are also used in testing
hypotheses about regression results.

This is also the beginning of multivariate statistics. Notice that in the one-way
ANOVA, each observation is for two variables: the "x" variable and the group of
which the observation is a part. In later chapters, observations will have two,
three, or more variables.

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The F-test for equality of variances is sometimes used before using the t-test for
equality of means because the t-test, at least in the form presented in this text,
requires that the samples come from populations with equal variances. You will
see it used along with t-tests when the stakes are high or the researcher is a little
compulsive.

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CHAPTER SEVEN
SOME NON-PARAMETRIC TESTS
Remember that you use statistics to make inferences about populations from
samples. Most of the techniques statisticians use require that two assumptions
are met. First, the population that the sample comes from is normal.
Second, whenever means and variances were computed, the numbers in the data
are "cardinal" or "interval", meaning that the value given an observation not only
tells you which observation is larger or smaller, but how much larger or smaller.
There are many situations when these assumptions are not met, and using the
techniques developed so far will not be appropriate. Fortunately, statisticians
have developed another set of statistical techniques, non-parametric statistics,
for these situations. Three of these tests will be explained in this chapter. These
three are the Mann-Whitney U-Test, which tests to see if two independently
chosen samples come from populations with the same location; the Wilcoxon
Rank Sum Test, which tests to see if two paired samples come from populations
with the same location; and Spearman's Rank Correlation, which tests to see if
two variables are related.

WHAT DOES "NON-PARAMETRIC" MEAN?

To a statistician, a parameter is a measurable characteristic of a population. The
population characteristics that usually interest statisticians are the location and
the shape. Non-parametric statistics are used when the parameters of the
population are not measurable or do not meet certain standards. In cases when
the data only orders the observations, so that the interval between the
observations is unknown, neither a mean nor a variance can be meaningfully
computed. In such cases you need to use non-parametric tests. Because your
sample does not have cardinal, or interval, data you cannot use it to estimate the
mean or variance of the population, though you can make other inferences. Even
if your data is cardinal, the population must be normal before the shape of the
many sampling distributions are known. Fortunately, even if the population is not
normal, such sampling distributions are usually close to the known shape if large

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samples are used. In that case, using the usual techniques is acceptable. However,
if the samples are small and the population is not normal, you have to use non-
parametric statistics. As you know, "there is no such thing as a free lunch". If you
want to make an inference about a population without having cardinal data, or
without knowing that the population is normal, or with very small samples, you
will have to give up something. In general, non-parametric statistics are less
precise than parametric statistics. Because you know less about the population
you are trying to learn about, the inferences you make are less exact.

When either (1) the population is not normal and the samples are small, or (2)
when the data is not cardinal, the same non-parametric statistics are used. Most
of these tests involve ranking the members of the sample, and most involve
comparing the ranking of two or more samples. Because we cannot compute
meaningful sample statistics to compare to a hypothesized standard, we end up
comparing two samples.

DO THESE POPULATIONS HAVE THE SAME LOCATION? THE MANN-WHITNEY U-

TEST.

In the chapter “T-test”, you learned how to test to see if two samples came from
populations with the same mean by using the t-test. If your samples are small and
you are not sure if the original populations are normal, or if your data does not
measure intervals, you cannot use that t-test because the sample t-scores will not
follow the sampling distribution in the t-table. Though there are two different
data problems that keep you from using the t-test, the solution to both problems
is the same, the non-parametric Mann-Whitney U test. The basic idea behind the
test is to put the samples together, rank the members of the combined sample,
and then see if the two samples are mixed together in the common ranking.

Once you have a single ranked list containing the members of both samples, you
are ready to conduct a Mann-Whitney U test. This test is based on a simple idea.
If the first part of the combined ranking is largely made up of members from one
sample, and the last part is largely made up of members from the other sample,
then the two samples are probably from populations with different ”averages”

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and therefore different locations. You can test to see if the members of one
sample are lumped together or spread through the ranks by adding up the ranks
of each of the two groups and comparing the sums. If these "rank sums" are
about equal, the two groups are mixed together. If these ranks sums are far from
equal, each of the samples is lumped together at the beginning or the end of the
overall ranking.

Willy Senn works for Old North Gadgets, a maker and marketer of computer
peripherals aimed at scientists, consultants, and college faculty. Old North's home
office and production facilities are in a small town in the US state of Maine. While
this is a nice place to work, the firm wants to expand its sales and needs a sales
office in a location closer to potential customers and closer to a major airport.
Willy has been given the task of deciding where that office should be. Before he
starts to look at office buildings and airline schedules, he needs to decide if Old
North's potential customers are in the east or the west. Willy finds an article in
Fortune magazine that lists the best cities for finding "knowledge workers", Old
North's customers. That article lists the ten best cities in the United States.
Rank Metro Area Region
1 Raleigh-Durham East
2 New York East
3 Boston East
4 Seattle West
5 Austin West
6 Chicago East
7 Houston West
8 San Jose West
9 Philadelphia East
10 Minnesota-St Paul East

Exhibit 11: Data for Willy's problem. From Kenneth Labich, "The Best Cities for
Knowledge Workers," Fortune, 128:12, Nov. 15, 1993, pp. 50 ff.

Six of the top ten are in the east and four are in the west, but these ten represent
only a sample of the market. It looks like the eastern places tend to be higher in
the top ten, but is that really the case? If you add up the ranks, the six eastern

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cities have a "rank sum" of 31 while the western cities have a rank sum of 24, but
there are more eastern cities and even if there were the same number would that
difference be due to a different "average" in the rankings, or is it just due to
sampling? The Mann-Whitney U test can tell you if the rank sum of 31 for the
eastern cities is significantly less than would be expected if the two groups really
were about the same and six of the ten in the sample happened to be from one
group. The general formula for computing the Mann-Whitney U for the first of
two groups is:
U1 = n1n2 + [n1(n1 + 1)]/2 - T1
where:
T1 = the sum of the ranks of group 1.
n1 = the number of members of the sample from group 1
n2 = the number of members of the sample from group 2.

This formula seems strange at first, but a little careful thought will show you what
is going on. The last third of the formula, -T1, subtracts the rank sum of the group
from the rest of the formula. What is the first two-thirds of the formula? The
bigger the total of your two samples, and the more of that total that is in the first
group, the bigger you would expect T1 to be, everything else equal. Looking at the
first two-thirds of the formula, you can see that the only variables in it are n1 and
n2, the sizes of the two samples. The first two-thirds of the formula depends on
the how big the total group is and how it is divided between the two samples. If
either n1 or n2 gets larger, so does this part of the formula. The first two-thirds of
the formula is the maximum value for T1, the rank sum of group 1. T1 will be at its
maximum if the members of the first group were all at the bottom of the rankings
for the combined samples. The U1 score then is the difference between the actual
rank sum and the maximum possible. A bigger U1 means that the members of
group 1 are bunched more at the top of the rankings and a smaller U1 means that
the members of group 1 are bunched near the bottom of the rankings so that the
rank sum is close to its maximum. Obviously, a U-score can be computed for
either group, so there is always a U1 and a U2. If U1 is larger, U2 is smaller for a
given n1 and n2 because if T1 is smaller, T2 is larger.

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What should Willy expect if the best cities are in one region rather than being
evenly distributed across the country? If the best cities are evenly distributed,
then the eastern group and the western group should have U's that are close
together since neither group will have a T that is close to either its minimum or its
maximum. If the one group is mostly at the top of the list, then that group will
have a large U since its T will be small, and the other group will have a smaller U
since its T will be large. U1 + U2 is always equal to n1n2 so either one can be used
to test the hypothesis that the two groups come from the same population.
Though there is always a pair of U-scores for any Mann-Whitney U-test, the
published tables only show the smaller of the pair. Like all of the other tables you
have used, this one shows what the sampling distribution of U's is like.

The sampling distribution and this test, were first described by HB Mann and DR
Whitney in 1947.1 While you have to compute both U-scores, you only use the
smaller one to test a two-tailed hypothesis. Because the tables only show the
smaller U, you need to be careful when conducting a one-tail test. Because you
will accept the alternative hypothesis if U is very small, you use the U computed
for that sample which Ha: says is farther down the list. You are testing to see if
one of the samples is located to the right of the other, so you test to see if the
rank sum of that sample is large enough to make its U small enough to accept Ha:.
If you learn to think through this formula, you will not have to memorize all of this
detail because you will be able to figure out what to do.

Let us return to Willy's problem. He needs to test to see if the best cities in which
to locate the sales office, the best cities for finding "knowledge workers", are
concentrated in one part of the country or not. He can attack his problem with a
hypothesis test using the Mann-Whitney U-test. His hypotheses are:

Ho: The distributions of eastern and western city rankings among the "best places
to find knowledge workers" are the same.
Ha: The distributions are different.
Looking at the table of Mann-Whitney values, he finds the following if one of the
n's is 6:

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n1
U₀ 1 2 3 4
0 0.1429 0.0357 0.0119 0.0005
1 0.2857 0.0714 0.0238 0.0095
2 0.4286 0.1429 0.0476 0.0190
3 0.5714 0.2143 0.0833 0.0333
4 0.4286 0.1310 0.0571
5 0.5714 0.1905 0.0857
6 0.2738 0.1286
7 0.3571 0.1762
8 0.4524 0.2381
9 0.5476 0.3048
10 0.3810

Exhibit 12: Some lower-tail values for the Mann Whitney U statistic

The values in the table show what portion of the sampling distribution of U-
statistics is in the lower tail, below the U value in the first column, if the null
hypothesis is true. Willy decides to use an a = 0.10. Since he will decide that the
data supports Ha if either the east or the west has a small U, Willy has a two-tail
test and needs to divide his ‘a’ between the two tails. He will choose Ha if either U
is in the lowest .05 of the distribution. Going down the column for the other n
equal to 4, Willy finds that if the null hypothesis is true, the probability that the
smaller of the two U-scores will be 4 or less is only 0.0571, and probability that
the lower U-score will be 3 or less is 0.0333. His half a of 0.05 is between these
two, so he decides to be conservative and use as a decision rule to conclude that
the data supports. Ha: The distributions are different, if his sample U is less than 3
and that the data supports Ho: the distributions are the same, if his U is greater
than or equal to 3. Now he computes his U, finding both Ue and Uw.

Remembering the formula from above, he finds his two U values::

For the eastern cities:

Ue = 6 × 4 + 6 × 7 – 31 = 14
2

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For the western cities:

Uw = 6 × 4 + 4 × 5 – 24 = 10
2

The smaller of his two U-scores is Uw = 10. Because 10 is larger than 3, his decision
rule tells him that the data supports the null hypothesis that eastern and western
cities rank about the same. Willy decides that the sales office can be in either an
eastern or western city, at least based on locating the office close to near large
numbers of knowledge workers. The decision will depend on office cost and
availability and airline schedules.

TESTING WITH MATCHED PAIRS: THE WILCOXON SIGNED RANKS TEST

During your career, you will often be interested in finding out if the same
population is different in different situations. Do the same workers perform
better after a training session? Do customers who used one of your products
prefer the "new improved" version? Are the same characteristics important to
different groups? When you are comparing the same group in two different
situations, you have "matched pairs". For each member of the population or
sample you have what happened under two different sets of conditions.

There is a non-parametric test using matched pairs that allows you to see if the
location of the population is different in the different situations. This test is the
Wilcoxon Signed Ranks Test. To understand the basis of this test, think about a
group of subjects who are tested under two sets of conditions, A and B. Subtract
the test score under B from the test score under A for each subject. Rank the
subjects by the absolute size of that difference, and look to see if those who
scored better under A are mostly lumped together at one end of your ranking. If
most of the biggest absolute differences belong to subjects who scored higher
under one of the sets of conditions, then, the subjects probably perform
differently under A than under B.

The details of how to perform this test were published by Frank Wilcoxon in
19452. Wilcoxon found a method to find out if the subjects who scored better
under one of the sets of conditions were lumped together or not. He also found
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the sampling distribution needed to test hypotheses based on the rankings. To

use Wilcoxon's test, collect a sample of matched pairs. For each subject, find the
difference in the outcome between the two sets of conditions and then rank the
subjects according to the absolute value of the differences. Next, add together
the ranks of those with negative differences and add together the ranks of those
with positive differences. If these rank sums are about the same, then the
subjects who did better under one set of conditions are mixed together with
those who did better under the other condition, and there is no difference. If the
rank sums are far apart, then there is a difference between the two sets of
conditions.

Because the sum of the rank sums is always equal to [N(N-1)]/2], if you know the
rank sum for either the positives or the negatives, you know it for the other. This
means that you do not really have to compare the rank sums, you can simply look
at the smallest and see if it is very small to see if the positive and negative
differences are separated or mixed together. The sampling distribution of the
smaller rank sums when the populations the samples come from are the same
was published by Wilcoxon. A portion of a table showing this sampling
distribution is in Exhibit 3. See below.

one-tail significance 0.05 0.025 0.01

two-tail significance 0.1 0.05 0.02

number of pairs, N
5 0
6 2 0
7 3 2 0
8 5 3 1
9 8 5 3
10 10 8 5

Exhibit 13: Sampling distribution

Wendy Woodruff is the President of the Student Accounting Society at the

University of North Carolina at Burlington (UNC-B). Wendy recently came across a
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study by Baker and McGregor ["Empirically Assessing the Utility of Accounting

Student Characteristics", unpublished, 1993] in which both accounting firm
partners and students were asked to score the importance of student
characteristics in the hiring process. A summary of their findings is in Exhibit 11.
ATTRIBUTE Mean: student rating Mean: big firm rating
High Accounting GPA 2.06 2.56
High Overall GPA 0.08 -0.08
Communication Skills 4.15 4.25
Personal Integrity 4.27 7.5
Energy, drive, enthusiasm 4.82 3.15
Appearance 2.68 2.31

Exhibit 14: Data on importance of student attributes. From Baker and McGregor.

Wendy is wondering if the two groups think the same things are important. If the
two groups think that different things are important, Wendy will need to have
some society meetings devoted to discussing the differences. Wendy has read
over the article, and while she is not exactly sure how Baker and McGregor's
scheme for rating the importance of student attributes works, she feels that the
scores are probably not distributed normally. Her test to see if the groups rate the
attributes differently will have to be non-parametric since the scores are not
normally distributed and the samples are small. Wendy uses the Wilcoxon Signed
Ranks Test.

Her hypotheses are:

Ho: There is no true difference between what students and Big 6 partners think is
important.
Hs: There is a difference.

She decides to use a level of significance of .05. Wendy's test is a two-tail test
because she wants to see if the scores are different, not if the Big 6 partners value
these things more highly. Looking at the table, she finds that, for a two-tail test,
the smaller of the two sum of ranks must be less than or equal to 2 to accept Ha:.

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Wendy finds the differences between student and Big 6 scores, and ranks the
absolute differences, keeping track of which are negative and which are positive.
She then sums the positive ranks and sum the negative ranks. Her work is shown
below:

ATTRIBUTE Mean student rating Mean big firm rating Difference Rank
High Accounting GPA 2.06 2.56 -0.5 -4
High Overall GPA 0.08 -0.08 0.16 2
Communication Skills 4.15 4.25 -0.1 -1
Personal Integrity 4.27 7.5 -2.75 -6
Energy, drive, enthusiasm 4.82 3.15 1.67 5
Appearance 2.68 2.31 0.37 3

sum of positive ranks = 4 + 5 + 3 = 10

sum of negative ranks = 4 + 1 = 6 = 11
number of pairs = 6
Exhibit 15: The worksheet for the Wilcoxon Signed Ranks Test

Her sample statistic, T, is the smaller of the two sums of ranks, so T=10. According
to her decision rule to accept Ha: if T < 2, she decides that the data supports Ho:
that there is no difference in what students and Big 6 firms think is important to
look for when hiring students. This makes sense, because the attributes that
students score as more important, those with positive differences, and those that
the Big 6 score as more important, those with negative differences, are mixed
together when the absolute values of the differences are ranked. Notice that
using the rankings of the differences rather than the size of the differences
reduces the importance of the large difference between the importance students
and Big 6 partners place on Personal integrity. This is one of the costs of using
non-parametric statistics. The Student Accounting Society at UNC-B does not
need to have a major program on what accounting firms look for in hiring.
However, Wendy thinks that the discrepancy in the importance in hiring placed
on Personal Integrity by Big 6 firms and the students’ means that she needs to
schedule a speaker on that subject. Wendy wisely tempers her statistical finding
with some common sense.

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ARE THESE TWO VARIABLES RELATED? SPEARMAN'S RANK CORRELATION

Are sales higher in those geographic areas where more is spent on advertising?
Does spending more on preventive maintenance reduce down-time? Are
production workers with more seniority assigned the most popular jobs? All of
these questions ask how the two variables move up and down together; when
one goes up, does the other also rise? when one goes up does the other go
down? Does the level of one have no effect on the level of the other? Statisticians
measure the way two variables move together by measuring the correlation
coefficient between the two.

Correlation will be discussed again in the next chapter, but it will not hurt to hear
about the idea behind it twice. The basic idea is to measure how well two
variables are tied together. Simply looking at the word, you can see that it means
co-related. If whenever variable X goes up by 1, variable Y changes by a set
amount, then X and Y are perfectly tied together, and a statistician would say that
they are perfectly correlated. Measuring correlation usually requires interval data
from normal populations, but a procedure to measure correlation from ranked
data has been developed. Regular correlation coefficients range from -1 to +1.
The sign tells you if the two variables move in the same direction (positive
correlation) or in opposite directions (negative correlation) as they change
together. The absolute value of the correlation coefficient tells you how closely
tied together the variables are; a correlation coefficient close to +1 or to -1 means
they are closely tied together, a correlation coefficient close to 0 means that they
are not very closely tied together. The non-parametric Spearman's Rank
Correlation Coefficient is scaled so that it follows these same conventions.

The true formula for computing the Spearman's Rank Correlation Coefficient is
complex. Most people using rank correlation compute the coefficient with a
computer program, but looking at the equation will help you see how Spearman's
Rank Correlation works. It is:
rs = 1 – ( 6 ) (Σd2)
n(n2 − 1)

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where:
n = the number of observations
d = the difference between the ranks for an observation

Keep in mind that we want this non-parametric correlation coefficient to range

from -1 to +1 so that it acts like the parametric correlation coefficient. Now look
at the equation. For a given sample size, n, the only thing that will vary is Σd2. If
the samples are perfectly positively correlated, then the same observation will be
ranked first for both variables, another observation ranked second for both
variables, etc. That means that each difference in ranks, d, will be zero, the
numerator of the fraction at the end of the equation will be zero, and that
fraction will be zero. Subtracting zero from one leaves one, so if the observations
are ranked in the same order by both variables, the Spearman's Rank Correlation
Coefficient is +1. Similarly, if the observations are ranked in exactly the opposite
order by the two variables, there will many large d2's, and Σd2 will be at its
maximum. The rank correlation coefficient should equal -1, so you want to
subtract 2 from 1 in the equation. The middle part of the equation, 6/n(n2-1),
simply scales Σd2 so that the whole term equals 2. As n grows larger, Σd2 will grow
larger if the two variables produce exactly opposite rankings. At the same time,
n(n2-1) will grow larger so that 6/n(n2-1) will grow smaller.

Colonial Milling Company produces flour, corn meal, grits, and muffin, cake, and
quick-bread mixes. They are considering introducing a new product, Instant
Cheese Grits mix. Cheese grits is a dish made by cooking grits, combining the
cooked grits with cheese and eggs, and then baking the mixture. It is a southern
favorite in the United States, but because it takes a long time to cook, is not
served much anymore. The Colonial mix will allow someone to prepare cheese
grits in 20 minutes in only one pan, so if it tastes right, it should be a good-selling
product in the South. Sandy Owens is the product manager for Instant Cheese
Grits, and is deciding what kind of cheese flavoring to use. Nine different cheese
flavorings have been successfully tested in production, and samples made with
each of those nine flavorings have been rated by two groups: first, a group of food
experts, and second, a group of potential customers. The group of experts was

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given a taste of three dishes of "homemade" cheese grits and ranked the samples
according to how well they matched the real thing. The customers were given the
samples and asked to rank them according to how much they tasted like "real
cheese grits should taste". Over time, Colonial has found that using experts is a
better way of identifying the flavorings that will make a successful product, but
they always check the experts' opinion against a panel of customers. Sandy must
decide if the experts and customers basically agree. If they do, then she will use
the flavoring rated first by the experts. The data from the taste tests is in Exhibit
13.

Expert ranking Consumer ranking

Flavoring
NYS21 7 8
K73 4 3
K88 1 4
Ba4 8 6
Bc11 2 5
McAA 3 1
McAA 9 9
WIS4 5 2
WIS43 6 7

Exhibit 16: Data from two taste tests of cheese flavorings

Sandy decides to use the SAS statistical software that Colonial has purchased. Her
hypotheses are:
Ho: The correlation between the expert and consumer rankings is zero or
negative.
Ha: The correlation is positive.

Sandy will decide that the expert panel does know best if the data supports Ha:
that there is a positive correlation between the experts and the consumers. She
goes to a table that shows what value of the Spearman's Rank Correlation

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Coefficient will separate one tail from the rest of the sampling distribution if there
is no association in the population. A portion of such a table is in Exhibit 12.
n α = 0.05 α = 0.025 α = 0.10
5 0.9
6 0.829 0.886 0.943
7 0.714 0.786 0.893
8 0.643 0.738 0.833
9 0.6 0.683 0.783
10 0.564 0.648 0.745
11 0.523 0.623 0.736
12 0.497 0.591 0.703

Exhibit 17: Some one-tail critical values for Spearman's Rank Correlation
Coefficient.

Using a = 0.05, going across the n = 9 row in Exhibit 12, Sandy sees that if Ho: is
true, only 0.05 of all samples will have an rs greater than 0.600. Sandy decides
that if her sample rank correlation is greater than 0.600, the data supports the
alternative, and flavoring K88, the one ranked highest by the experts, will be used.
She first goes back to the two sets of rankings and finds the difference in the rank
given each flavor by the two groups, squares those differences and adds them
together:

Expert ranking Consumer ranking difference d²

Flavoring
NYS21 7 8 -1 1
K73 4 3 1 1
K88 1 4 -3 9
Ba4 8 6 2 4
Bc11 2 5 -3 9
McAA 3 1 2 4
McAA 9 9 0 0
WIS4 5 2 3 9
WIS43 6 7 -1 1

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sum = 38
Exhibit 18: Sandy's worksheet

Then she uses the formula from above to find her Spearman rank correlation
coefficient:
1 - [6/(9)(92 - 1)][38] = 1 - 0.3166 = 0.6834

Her sample correlation coefficient is 0.6834, greater than 0.600, so she decides
that the experts are reliable, and decides to use flavoring K88. Even though Sandy
has ordinal data that only ranks the flavorings, she can still perform a valid
statistical test to see if the experts are reliable. Statistics has helped another
manager make a decision.
SUMMARY
Though. they are less precise than other statistics, non-parametric statistics are
useful. You will find yourself faced with small samples, populations that are
obviously not normal, and data that is not cardinal. At those times, you can still
make inferences about populations from samples by using non-parametric
statistics.

Non-parametric statistical methods are also useful because they can often be
used without a computer, or even a calculator. The Mann-Whitney U, and the t-
test for the difference of sample means, test the same thing. You can usually
perform the U-test without any computational help, while performing a t-test
without at least a good calculator can take a lot of time. Similarly, the Wilcoxon
Signed Ranks test and Spearman's Rank Correlation are easy to compute once the
data has been carefully ranked. Though you should proceed on to the parametric
statistics when you have access to a computer or calculator, in a pinch you can
use non-parametric methods for a rough estimate.

Notice that each different non-parametric test has its own table. When your data
is not cardinal, or your populations are not normal, the sampling distributions of
each statistic is different. The common distributions, the t, the χ2, and the F,
cannot be used.

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Non-parametric statistics have their place. They do not require that we know as
much about the population, or that the data measure as much about the
observations. Even though they are less precise, they are often very useful.

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