CONTENTS

Chapter 1. Hypothesis testing ..7

1.1. Introduction...7
1.12. Concepts of hypothesis testing ...7
1.13. The null and alternative hypothesis 8
1.14. Tails of the test...11
Exercises..14
1.2. Tests of the mean of a normal distribution: Population variance
known ....15
1.3. Tests of the mean of a normal distribution: Population variance
unknown (Large sample size)..18
Exercises..21
1.4. Hypothesis testing using the p value approaches ..23
Exercises..25
1.5. Tests of the mean of a normal distribution: Population variance
unknown. Small samples .26
Exercises 29
1.6. Tests of the population proportion (Large sample) . 32
Exercises...34
1.7. Tests of the variance of a normal distribution 36
Exercises 38
1.8. Tests for the difference between two population means ..40
1.8.1. Tests based on paired samples40
Exercises...43
1.8.2. Tests based on independent samples (Known variance
or large sample size) 44
Exercises ..47
1.8.3. Tests based on independent samples (Population variances
are unknown and equal)...49
Exercises52
1.9. Tests for the difference between two population proportions
(Large samples) .55
Exercises.59

Chapter 2. Some nonparametric tests.......61

2.1. Introduction.61
2.2.1. The Sign test for paired or matched samples. .62
2.2.2. The sign test: Normal approximation (Large samples) .. 65
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Exercises67
2.3. The Wilcoxon signed test ..70
2.3.1. The Wilcoxon signed test for paired samples
(small sample size)....70
2.3.2. The Wilcoxon signed test for paired samples
(large sample size)....72
Exercises74
2.4. The Mann-Whitney test..77
Exercises82
Chapter 3. Simple linear regression.....84
3.1. Introduction 84
3.2. The scatter diagram.....84
3.3. Correlation analysis.86
3.3.1. Hypothesis test for correlation .89
Exercises 91
3.4. Spearman rank correlation ......93
Exercises 95
3.5. The linear regression model 96
3.5. 1. Least squares coefficient estimators . 98
3.5.2. Least square procedure ... .99
3.5.3. Interpretation of a and b ......102
3.5.4. Assumptions of the regression model .103
Exercises.104
3.6. The explanatory power of a linear regression equation .106
3.6.1. Coefficient of determination R 2 .....109
3.6.2. Estimation of model error variance 110
Exercises 111
3.7. Statistical inference: Hypothesis tests and confidence
intervals.113
3.7.1. Hypothesis testing about ....114
3.7.2. Confidence intervals for the population regression slope ..116
Exercises.117
3.8. Using the regression model for prediction a particular
value of y120
Exercises .123
Chapter 4. Multiple regression analysis .125
4.1. Introduction.125
4.2. Multiple regression model 125
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4.3. Standard assumptions for the multiple regression models ..127

4.4. The explanatory power of a multiple regression equation..127
4.4.1. Estimation of error variance distribution.127
4.4.2. The coefficient of determination..128
4.4.3. Adjusted coefficient of determination..129
4.4.4. Predictions from the multiple regression models.130
Exercises.130
4.5. Computer solution of multiple regressions .132
4.6. Confidence interval for individual coefficients ..138
Exercises.139
4.7. Test of hypothesis about individual coefficients .143
4.8. Tests on sets of regression parameters.145
Exercises. 146
4.9. Dummy variables in the regression models.150
Exercises.155
Chapter 5. Analysis of variance (ANOVA) ..159
5.1. Introduction.....159
5.2. One-way analysis of variance ....159
Exercises.168
5.3. The Kruskal-Wallis test ..171
Exercises.173
5.4. Two-way analysis of variance ....175
Exercises.182
Chapter 6. Statistical quality control 185
6.1. Introduction..185
6.2. Variation .185
6.3. Control charts ..186
6.3.1.
Control
charts
for
means
and
standard
deviations.187
6.4. Interpretation of control charts 192
Exercises..193
6.5. Control charts for proportions .....195
Exercises..197
6.6. Control charts for number of occurrences: c-chart ..199
Exercises..201
Chapter 7. Time series analysis and forecasting .... 203
7.1. Introduction to index numbers ....203
7.1.1. Price index for a single item (Simple index number)203
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7.1.2. Unweighted aggregate price index....203

7.1.3. A weighted aggregate price index 205
7.1.4. A weighted aggregate quantity index206
7.2. Commonly used index numbers...206
7.3. Deflating a series by price indexes...207
Exercises..209
7.4 A nonparametric test for randomness211
7.4.1. The runs test for the small sample sizes211
7.4.2. The run test for the large sample sizes..212
Exercises.213
7.5. Components of time series...216
7.6. Moving averages..217
Exercises.220
7.7. Exponential smoothing221
Exercises.224
7.8. Double exponential smoothing (Holt-Winters exponential
forecasting model)...226
Exercises.230
Appendix ....232
References.. 253