Statistics for economics, accounting and business studies

475 Pages·2009·5.717 MB·English

by  Michael Barrow

‘An excellent reference book for the undergraduate student; fi lled with examples and applications – Fifth
both practical (i.e. computer-based) and traditional (i.e. pen and paper problems); wide-ranging and
Edition MICHAEL BARROW
sensibly ordered. The book is written clearly, easy to follow ... yet not in the least patronising. This is
a particular strength.’
Christopher Gerry, UCL AS
‘There are thousands of intro stats books on the market, but few which are suffi ciently orientated CT STATISTICS FOR ECONOMICS,
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towards economics, and even fewer that treat topics with as much rigour as Barrow does.’ A
Andy Dickerson, University of Sheffi eld O
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ACCOUNTING AND BUSINESS STUDIES
‘The Barrow exercises and online resources offer good scope for directing students to a great source I
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of self study.’
Robert Watkins, Kingston University TT Fifth Edition
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Do you need to brush up on your statistical skills to truly excel in your economics
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or business course? If you want to increase your confi dence in statistics then this A
is the perfect book for you. The fi fth edition of Statistics for Economics, Accounting N
and Business Studies continues to present a user-friendly and concise introduction F
to a variety of statistical tools and techniques. Throughout the text, the author D
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demonstrates how and why these techniques can be used to solve real-life problems,
highlighting common mistakes and assuming no prior knowledge of the subject. B
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New to this fi fth edition:
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• Chapter 11, Seasonal adjustment of time-series data is back by popular demand.
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• New worked examples in every chapter and more real-life business examples – NC
such as whether the level of general corruption in a country harms investment
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and whether boys or girls perform better at school – show how to apply an O
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understanding of statistical techniques to wider business practice.
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• New interactive online resource MathXL for Statistics. See below for more details.

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MathXL for Statistics U
A brand new online learning DI
resource for this edition available C
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to users of this book at E
www.pearsoned.co.uk/barrow This core textbook is aimed at undergraduate and S
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MBA students taking an introductory statistics
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An unrivalled online study and testing resource course on their economics, accounting or
that generates a personalised study plan and business studies degree.
provides extensive practice questions exactly B
where you need them. Michael Barrow is a Senior Lecturer in Economics
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at the University of Sussex. He has acted as a
• Interactive questions with randomised values
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consultant for major industrial, commercial and
allow you to practise the same concept as
government bodies. R
many times as you need until you master it.
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• Guided solutions break down the question for
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you step-by-step.
• Audio animations talk you through key
statistical techniques.
www.pearson-books.com
an imprint of Front cover image: © Getty Images
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Statistics for Economics,
Accounting and Business Studies
The Power of Practice
With your purchase of a new copy of this textbook, you received a Student Access Kit for getting
started with statistics using MathXL. Follow the instructions on the card to register successfully
and start making the most of the resources.
Don’t throw it away!
The Power of Practice
MathXLis an online study and testing resource that puts you in control of your study, providing
extensive practice exactly where and when you need it.
MathXLgives you unrivalled resources:
● Sample testsfor each chapter to see how much you have learned and where you still need
practice.
● A personalised study plan, which constantly adapts to your strengths and weaknesses, taking
you to exercises you can practise over and over with different variables every time.
● ‘Help me solve this’ provide guided solutions which break the problem into its component steps
and guide you through with hints.
● Audio animationsguide you step-by-step through the key statistical techniques.
● Click on the E-booktextbook icon to read the relevant part of your textbook again.
See pages xiv–xv for more details.

To activate your registration go to www.pearsoned.co.uk/barrowand follow the instructions
on-screen to register as a new user.
➔
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We work with leading authors to develop the strongest
educational materials in Accounting, bringing cutting-edge
thinking and best learning practice to a global market.
Under a range of well-known imprints, including
Financial Times Prentice Hall, we craft high-quality print
and electronic publications, which help readers to
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or at work.
To find out more about the complete range of our
publishing, please visit us on the World Wide Web at:
www.pearsoned.co.uk
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Statistics for Economics,
Accounting and Business Studies
Fifth Edition
Michael Barrow
University of Sussex
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Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and Associated Companies throughout the world
Visit us on the World Wide Web at:
www.pearsoned.co.uk
First published 1988
Fifth edition published 2009
© Pearson Education Limited 1988, 2009
The right of Michael Barrow to be identified as author of this work has been asserted by
him in accordance with the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise, without either the prior written permission of the publisher or a
licence permitting restricted copying in the United Kingdom issued by the Copyright
Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS.
All trademarks used herein are the property of their respective owners. The use of any
trademark in this text does not vest in the author or publisher any trademark ownership
rights in such trademarks, nor does the use of such trademarks imply any affiliation with
or endorsement of this book by such owners.
ISBN 13: 978-0-273-71794-2
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data
Barrow, Michael.
Statistics for economics, accounting and business studies / Michael Barrow. – 5th ed.
p. com.
Includes bibliographical references and index.
ISBN 978-0-273-71794-2 (pbk. : alk. paper) 1. Economics–Statistical methods. 2. Commercial
statistics. I. Title.
HB137.B37 2009
519.5024′33–dc22
2009003125
10 9 8 7 6 5 4 3 2 1
13 12 11 10 09
Typeset in 9/12pt Stone Serif by 35
Printed and bound by Ashford Colour Press Ltd. Gosport
The publisher’s policy is to use paper manufactured from sustainable forests.
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For Patricia, Caroline and Nicolas
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Contents
Guided tour of the book xii
Getting started with statistics using MathXL xiv
Preface to the fifth edition xvii
Introduction 1
1 Descriptive statistics 7
Learning outcomes 8
Introduction 8
Summarising data using graphical techniques 10
Looking at cross-section data: wealth in the UK in 2003 16
Summarising data using numerical techniques 24
The box and whiskers diagram 44
Time-series data: investment expenditures 1973–2005 45
Graphing bivariate data: the scatter diagram 58
Data transformations 60
Guidance to the student: how to measure your progress 62
Summary 63
Key terms and concepts 64
Reference 64
Problems 65
Answers to exercises 71
Appendix 1A: Σnotation 75
Problems on Σnotation 76
Appendix 1B: E and V operators 77
Appendix 1C: Using logarithms 78
Problems on logarithms 79
2 Probability 80
Learning outcomes 80
Probability theory and statistical inference 81
The definition of probability 81
Probability theory: the building blocks 84
Bayes’ theorem 91
Decision analysis 93
Summary 98
Key terms and concepts 98
Problems 99
Answers to exercises 105
vii
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Contents
3 Probability distributions 108
Learning outcomes 108
Introduction 109
Random variables 110
The Binomial distribution 111
The Normal distribution 117
The sample mean as a Normally distributed variable 125
The relationship between the Binomial and
Normal distributions 131
The Poisson distribution 132
Summary 135
Key terms and concepts 136
Problems 137
Answers to exercises 142
4 Estimation and confidence intervals 144
Learning outcomes 144
Introduction 145
Point and interval estimation 145
Rules and criteria for finding estimates 146
Estimation with large samples 149
Precisely what is a confidence interval? 153
Estimation with small samples: the tdistribution 160
Summary 165
Key terms and concepts 165
Problems 166
Answers to exercises 169
Appendix: Derivations of sampling distributions 170
5 Hypothesis testing 172
Learning out comes 172
Introduction 173
The concepts of hypothesis testing 173
The Prob-value approach 180
Significance, effect size and power 181
Further hypothesis tests 183
Hypothesis tests with small samples 187
Are the test procedures valid? 189
Hypothesis tests and confidence intervals 190
Independent and dependent samples 191
Discussion of hypothesis testing 194
Summary 195
Key terms and concepts 196
Reference 196
viii
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Contents
Problems 197
Answers to exercises 201
6 The χ2 and F distributions 204
Learning outcomes 204
Introduction 205
The χ2distribution 205
The F distribution 220
Analysis of variance 222
Summary 229
Key terms and concepts 230
Problems 231
Answers to exercises 234
Appendix: Use of χ2and F distribution tables 236
7 Correlation and regression 237
Learning outcomes 237
Introduction 238
What determines the birth rate in developing countries? 238
Correlation 240
Regression analysis 251
Inference in the regression model 257
Summary 271
Key terms and concepts 272
References 272
Problems 273
Answers to exercises 276
8 Multiple regression 279
Learning outcomes 279
Introduction 280
Principles of multiple regression 281
What determines imports into the UK? 282
Finding the right model 300
Summary 307
Key terms and concepts 308
Reference 308
Problems 309
Answers to exercises 313
9 Data collection and sampling methods 318
Learning outcomes 318
Introduction 319
Using secondary data sources 319
Using electronic sources of data 321
ix