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 Meet the Authors vii

For the past 30 years Jonathan Berkowitz (Ph.D. University of Toronto) has had a full-time practice
as a consulting statistician as president of the aptly named Berkowitz & Associates Consulting Inc.
But Jonathan leads a double life, because he is also a full-time instructor with the Sauder School
of Business and an Associate Member of the Department of Family Practice (Faculty of Medicine),
both at the University of British Columbia. Jonathan is recognized as an outstanding teacher, hav-
ing won the Killam Teaching Prize for undergraduate teaching and CGA Graduate Master Teacher
Award for MBA teaching, both at the Sauder School, as well as many awards and commendations
from students. In addition, he teaches short courses and workshops for a number of public and
private sector groups. His passion for teaching also extends to younger audiences, regularly per-
forming shows on math magic, word games, and puzzles in school classrooms. In his consulting
life, Jonathan has been involved in a wide range of collaborative and interdisciplinary research in
health care and medical research, social science, engineering, biotechnology, transportation, law,
management consulting, market research, and accounting. His clients enthusiastically describe
him as a “user friendly” statistician! He has contributed to numerous successful research grant
applications, and has co-written many peer-reviewed journal articles and other publications. He
has also helped more than 100 graduate students complete their degrees. While numbers are
his vocation, words are his avocation. A passion for puzzles, word games, and puns infiltrates
all aspects of his life, including the classroom. He is an active member of the National Puzzlers’
League, and for six years was the puzzle composer and editor for the American Statistical Asso-
ciation’s CHANCE magazine. Jonathan and his wife have two children, both of whom graduated
from Canadian business schools and have careers in quantitative fields, a classic illustration of the
power of both nature and nurture.

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 Brief Contents
Preface
Part 1 Exploring and Collecting Data
Chapter 1 Statistics, Data, and Decisions 1
Chapter 2 Displaying and Describing Categorical Data 30
Chapter 3 Displaying and Describing Quantitative Data 67
Chapter 4 Correlation and Linear Regression 116

Part 2 Modelling with Probability

Chapter 5 Randomness and Probability 168
Chapter 6 Random Variables and Probability Models 202
Chapter 7 The Normal and Other Continuous Distributions 231
Chapter 8 Surveys and Sampling 262
Chapter 9 Sampling Distributions and Confidence Intervals for Proportions 287

Part 3 Inference for Decision-Making

Chapter 10 Testing Hypotheses About Proportions 325
Chapter 11 Confidence Intervals and Hypothesis Tests for Means 360
Chapter 12 Comparing Two Groups 394
Chapter 13 Inference for Counts: Chi-Square Tests 446

Part 4 Models for Decision-Making

Chapter 14 Inference for Regression 485
Chapter 15 Multiple Regression 537
Chapter 16 Statistical Modelling and the World of Business Statistics 586
Appendix A: Answer Key
Appendix B: Tables and Selected Formulas
Index

ix

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 Contents
Preface xiv

Part 1 Exploring and Collecting Data

Chapter 1 Statistics, Data, and Decisions 1
1.1 The Role of Statistics in the World 2 • 1.2 So, What Is Statistics? 4
1.3 What Are Data? 7 • 1.4 Types of Variables (and Types of Data) 10
1.5 Data Quality 17 • 1.6 Data Sources—Where, How, and When 19
Ethics in Action 22
Technology Help: Statistics Packages 25
Mini Case Study Projects: Credit Card Company 25
Edmonton Oilers 25
Student Survey 25

Chapter 2 Displaying and Describing Categorical Data 30

2.1 The Three Rules of Data Analysis 31 • 2.2 Frequency Tables 32 • 2.3 Displaying a
Categorical Variable 33 • 2.4 Exploring Two Categorical Variables: Contingency Tables 37
2.5 Simpson’s Paradox 47 • 2.6 How to Make a Table That Has Legs! 48
Ethics in Action 53
Technology Help: Displaying Categorical Data on the Computer 55
Mini Case Study Project: Eddie’s Hang-up Display 56

Chapter 3 Displaying and Describing Quantitative Data 67

3.1 Displaying Quantitative Variables 68 • 3.2 Shape 72 • 3.3 Centre 74
3.4 Spread of the Distribution 76 • 3.5 Shape, Centre, and Spread—A Summary 78
3.6 Five-Number Summary and Boxplots 79 • 3.7 Comparing Groups 82
3.8 Identifying Outliers 84 • 3.9 Standardizing 85 • *3.10 Time Series Plots 88
3.11 Transforming Skewed Data 91
Ethics in Action 95
Technology Help: Displaying and Summarizing Quantitative Variables 99
Mini Case Study Projects: Canada’s CEO Top 100 100
Hotel Occupancy Rates 101
Value and Growth Stock Returns 101

Chapter 4 Correlation and Linear Regression 116

4.1 Looking at Scatterplots 119 • 4.2 Assigning Roles to Variables in Scatterplots 121
4.3 Understanding Correlation 122 • 4.4 Lurking Variables and Causation 127
4.5 The Linear Model 129 • 4.6 Correlation and the Line 130 • 4.7 Regression to
the Mean 133 • 4.8 Checking the Model 137 • 4.9 Variation in the Model and R 2 139
4.10 Reality Check: Is the Regression Reasonable? 141 • 4.11 Nonlinear Relationships 145
Ethics in Action 150
Technology Help: Correlation and Regression 154
Mini Case Study Projects: Fuel Efficiency 155
Energy Use at YVR 155
Cost of Living 156
Canadian Banks 156

Part 2 Modelling with Probability

Chapter 5 Randomness and Probability 168
5.1 Random Phenomena and Probability 169 • 5.2 The Nonexistent
Law of Averages 171 • 5.3 Different Types of Probability 172
5.4 Probability Rules 174 • 5.5 Joint Probability and Contingency Tables 179
5.6 Conditional Probability 179 • 5.7 Constructing Contingency Tables 182
5.8 Probability Trees 183 • *5.9 Reversing the Conditioning: Bayes’ Rule 185
5.10 Fun with Probability! 187
Ethics in Action 189
Mini Case Study Project: Market Segmentation 192

xi

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 xii Contents

Chapter 6 Random Variables and Probability Models 202

6.1 Expected Value of a Random Variable 204 • 6.2 Standard Deviation of a Random
Variable 205 • 6.3 Properties of Expected Values, Variances, and Standard
Deviations 208 • 6.4 Bernoulli Trials 212 • 6.5 Discrete Probability Models 213
Ethics in Action 222
Technology Help: Random Variables and Probability Models 224
Mini Case Study Project: Investment Options 224

Chapter 7 The Normal and Other Continuous Distributions 231

7.1 Continuous Random Variables 232 • 7.2 The Normal Distribution 233
7.3 Normal Probability Plots 241 • 7.4 The Distribution of Sums of Normals 243
7.5 The Normal Approximation for the Binomial 246 • 7.6 Other Continuous
Random Variables 249
Ethics in Action 251
Technology Help: Probability Calculations and Plots 253
Mini Case Study Project: Price/Earnings and Stock Value 254

Chapter 8 Surveys and Sampling 262

8.1 Three Ideas of Sampling 263 • 8.2 Populations and Parameters 268 • 8.3 Common
Sampling Designs 269 • 8.4 The Valid Survey 274 • 8.5 How to Sample Badly 275
Ethics in Action 278
Technology Help: Random Sampling 280
Mini Case Study Projects: Market Survey Research 280
Canadian Labour Force Survey 280

Chapter 9 Sampling Distributions and Confidence Intervals for Proportions 287

9.1 The Distribution of Sample Proportions 289 • 9.2 The Sampling Distribution
for Proportions 290 • 9.3 The Central Limit Theorem—The Fundamental
Theorem of Statistics 295 • 9.4 A Confidence Interval for a Proportion 299
9.5 Margin of Error: Certainty vs. Precision 304 • 9.6 Choosing the Sample Size 307
Ethics in Action 312
Technology Help: Confidence Intervals for Proportions 314
Mini Case Study Projects: Real Estate Simulation 315
Investor Sentiment 316

Part 3 Inference for Decision-Making

Chapter 10 Testing Hypotheses About Proportions 325
10.1 Hypotheses 327 • 10.2 A Trial as a Hypothesis Test 328 • 10.3 P-Values 329
10.4 The Reasoning of Hypothesis Testing 331 • 10.5 Alternative Hypotheses 333
10.6 Alpha Levels and Significance 337 • 10.7 Critical Values 339 • 10.8 Confidence
Intervals and Hypothesis Tests 340 • 10.9 Two Types of Errors 343 • *10.10 Power 345
Ethics in Action 349
Technology Help: Hypothesis Tests 351
Mini Case Study Projects: Metal Production 352
Loyalty Program 353

Chapter 11 Confidence Intervals and Hypothesis Tests for Means 360

11.1 The Sampling Distribution for Means 361 • 11.2 How Sampling Distribution
Models Work 362 • 11.3 Gossett and the t-Distribution 364 • 11.4 A Confidence
Interval for Means 366 • 11.5 Assumptions and Conditions 368
11.6 Testing Hypotheses About the Mean—The One-Sample t-Test 373
Ethics in Action 379
Technology Help: Inference for Means 381
Mini Case Study Projects: Real Estate 382
Social Media 383

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 xiii
Contents

Chapter 12 Comparing Two Groups 394

12.1 Comparing Two Means 396 • 12.2 The Two-Sample t-Test 398 • 12.3 Assumptions
and Conditions 399 • 12.4 A Confidence Interval for the Difference Between Two Means 403
12.5 The Pooled t-Test 405 • 12.6 Paired Data 412 • 12.7 Paired t-Methods 414
12.8 Comparing Two Proportions 419
Ethics in Action 423
Technology Help: Comparing Two Means 426
Mini Case Study Projects: Terra Breads 429
Real Estate 429
Stanley Cup Fatigue (Data Analysis) 430

Chapter 13 Inference for Counts: Chi-Square Tests 446

13.1 Goodness-of-Fit Tests 448 • 13.2 Interpreting Chi-Square Values 453
13.3 Examining the Residuals 454 • 13.4 Chi-Square Tests of Two-Way Tables 455
Ethics in Action 468
Technology Help: Chi-Square 470
Mini Case Study Projects: Kit and Ace 472
Coffee Consumption in Canada 473
Loyalty Program 474

Part 4 Models for Decision-Making

Chapter 14 Inference for Regression 485
14.1 A Hypothesis Test and Confidence Interval for the Slope 487 • 14.2 Assumptions and
Conditions 491 • 14.3 Standard Errors for Predicted Values 497 • 14.4 Using Confidence and
Prediction Intervals 501 • 14.5 Extrapolation and Prediction 502 • 14.6 Unusual and
Extraordinary Observations 505 • *14.7 Working with Summary Values 508 • *14.8 Linearity 510
14.9 A Hypothesis Test for Correlation 512 • 14.10 ANOVA and the F-Statistic 512
Ethics in Action 517
Technology Help: Regression Analysis 520
Mini Case Study Projects: Frozen Pizza 522
Global Warming? 522

Chapter 15 Multiple Regression 537

15.1 The Multiple Regression Model 540 • 15.2 Interpreting Multiple Regression
Coefficients 542 • 15.3 Assumptions and Conditions for the Multiple Regression Model 544
15.4 Testing the Multiple Regression Model 551 • 15.5 ANOVA Table, F-Statistic, R 2,
and Adjusted R 2 552 • 15.6 Building, Comparing, and Using Models 555
15.7 Extending Multiple Regression 558 • *15.8 The Logistic Regression
Model 560 • 15.9 A Wrap-up Example 565
Ethics in Action 571
Technology Help: Regression Analysis 573
Mini Case Study Projects: Golf Success 574
Rating School Performance 575

Chapter 16 Statistical Modelling and the World of Business Statistics 586

16.1 Statistical Models 588 • 16.2 A Modelling Framework 591 • 16.3 One-Way
Analysis of Variance (ANOVA) 594 • 16.4 A Short Tour of Other Statistical Methods
in Business 601 • 16.5 The Future of Business Statistics 603
Technology Help: Analysis of Variance 607

Appendixes A-1
A. Answer Key A-1
B. Tables and Selected Formulas A-77

Index I-1

A01_SHAR7740_02_SE_FM.indd 13 16/11/17 6:21 PM

 Preface
Motivated business students studying Statistics ask the question “How can I make better
decisions?” Unfortunately, that is not the question most students are asking themselves on
the first day of the course! As entrepreneurs and consultants, we know that in today’s data-
rich environment, knowledge of Statistics is essential to survive and thrive in the business
world. But, as educators, we’ve seen a disconnect between the way business statistics is tra-
ditionally taught and the way it should be used in making business decisions. In Business
Statistics: A First Course, we try to narrow the gap between theory and practice by present-
ing relevant statistical methods that will empower business students to make effective, data-
informed decisions.
Of course, students should come away from their statistics course knowing how to
think statistically and how to apply statistics methods with modern technology. But they
must also be able to communicate their analyses effectively to others. When asked about
statistics education, a group of CEOs from Fortune 500 companies recently said that,
although they were satisfied with the technical competence of students who had studied
Statistics, they found the students’ ability to communicate their findings to be woefully
inadequate.
Our Plan, Do, Report rubric provides a structure for solving business problems that
mimics the correct application of statistics to solving real business problems. We empha-
size the often-neglected thinking (Plan) and communication (Report) steps in problem
solving, in addition to the methodology (Do). This approach requires up-to-date, real-
world examples and data. So, we constantly strive to illustrate our lessons with current
business issues and examples.

What’s New in This Edition?

The second Canadian edition of Business Statistics: A First Course has a new structure to
further help students focus on the central material. Examples and exercises are updated so
that the story we tell is always tied to the ways Statistics informs modern business practice.
• Recent data. We teach with real data whenever possible, so we’ve updated data
throughout the book. New examples ref lect current stories in the news and recent
economic and business events. Some of the Mini Case Study Projects have been updated
with new data and new contexts.
• Improved organization. We have retained our “data first” presentation of topics,
because we find that it provides students with both motivation and a foundation in real
business decisions on which to build an understanding.
• Chapters 1–4 have been streamlined to cover collecting, displaying, summariz-
ing, and understanding data in four chapters. We find that this provides students
with a solid foundation to launch their study of probability and statistics.
• Chapters 5–9 introduce students to randomness and probability models. They
then apply these new concepts to sampling. This provides a gateway to the core
material on statistical inference. We’ve moved the discussion of probability trees
and Bayes’ rule into these chapters.
• Chapters 10–13 cover inference for both proportions and means. We introduce
inference by discussing proportions, because most students are better acquainted
with proportions reported in surveys and news stories. However, this edition ties
in the discussion of means immediately, so students can appreciate that the rea-
soning of inference is the same in a variety of contexts.
• Chapters 14 and 15 cover regression-based models for decision-making.

xiv

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 Preface xv


• Chapter 16, the capstone chapter, now also includes a section on one-way analy-
sis of variance. And the chapter points the way forward for further study of busi-
ness statistics.
• Streamlined design. Our goal has always been an accessible text. This edition sports
a new design that clarifies the purpose of each text element. The major theme of each
chapter is more linear and easier to follow without distraction. Supporting material is
clearly boxed and shaded, so students know where to focus their study efforts.
• Enhanced Technology Help with expanded Excel 2013 coverage. We’ve updated
Technology Help with detailed instructions for Excel 2013 to almost every chapter.
• Updated Ethics in Action features. We’ve updated some of our Ethics in Action
­features.
• Updated examples to reflect the changing world. We live in a time of rapid and
marked changes in Canadian, American, and world economies. Our examples and
exercises have been updated to keep pace.
• Increased focus on core material. Statistics in practice means making smart deci-
sions based on data. Students need to know the methods, how to apply them, and the
assumptions and conditions that make them work. We’ve tightened our discussions to
get students there as quickly as possible, focusing increasingly on the central ideas and
core material.
• MyLab Business Statistics performance data to improve exercises. The authors
analyzed aggregated student usage and performance data from MyLab Business
Statistics for the previous edition of this text. The results of this analysis helped improve
the quality and quantity of exercises that matter the most to instructors and students.
In addition to these changes, below is a detailed list of changes by chapter to the sec-
ond Canadian edition.
• Chapter 1 encourages students’ interest in and understanding of the discipline
through a chapter opener and an introductory section called The Role of Statis-
tics in the World. There is an expanded explanation of uncertainty, and a brief
discussion of basic s­ tatistical literary. The chapter then moves immediately to a
discussion of data types and includes a section on data quality.
• Chapter 2 introduces alternatives and variations on bar charts—dot plot, Pareto
chart, and segmented bar charts—as an alternative to pie charts. New in the sec-
ond edition is a discussion of mosaic plots, and a section on constructing good
tables (How to Make a Table That Has Legs!).
• Chapter 3 has historical notes on the term histogram, the origins of stem-
and-leaf displays, and the use of x-bar notation; an explanation of harmonic and
geometric means, with illustrative examples; and the probability explanation of the
n – 1 denominator of sample standard deviation. The second edition has a new
section on transforming skewed data, and introduces the term “infographics.”
• Chapter 4 has an expanded discussion of regression to the mean, historical
vignettes, and a graphical illustration. The second edition has a new item on eco-
logical correlation, and a new section on nonlinear relationships.
• Chapter 5 features expanded commentary about, and illustrations of, Bayes’
Rule. The section called Fun with Probability! describes three famous probability
puzzles.

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 xvi Preface

• Chapter 6 discusses random variables and focuses on discrete probability models.

It includes a subsection on dependent random variables, important in finance and
portfolio diversification. There is now a separate subsection on Bernoulli trials.
• Chapter 7 is a new chapter on continuous probability models, focusing on the
Normal distribution, with a chapter opener about the TSX. The second edition
also has a brand-new section on Normal probability plots.
• Chapter 8 discusses surveys and sampling, with additional explanations of popula-
tion, parameter, sample, statistic, and sampling frame as well as sidebar discussions
that help contextualize the concept of polls and surveys.
• Chapter 9 includes stronger ties to material in previous and later chapters, to
help students draw on what they have already learned.
• Chapter 10 has a full illustration of the correspondence between the logic of
hypothesis testing and proof by contradiction, as well as new explanations of con-
cepts such as statistical versus practical significance and how the two error type
probabilities are inversely related. The second edition has a clear tabular sum-
mary of the hypothesis testing process.
• Chapter 11 includes feature boxes that connect Statistics to students’ everyday
life, including a feature on the Canadian Census, updated for the new federal law
restoring the mandatory long-form census.
• Chapter 12 has an additional example, a subsection about how the paired t-test
works, and a separate section on comparing two proportions, with a new illustra-
tive example on Snapchat usage by teenagers.
• Chapter 13 combines the two topics, the chi-square test of homogeneity and the
chi-square test of independence, into a single section, Chi-Square Tests of Two-
Way Tables, showing how the two-proportion z-test can be recast as a two-way
table and then extended to more rows and more columns.
• Chapter 14 has a separate section on a hypothesis test of correlation, and a sec-
tion on regression ANOVA and the F-statistic. The second edition has many
updated exercises with more-current data sets.
• Chapter 15 has two unique sections—one on building, comparing, and using
models, and one that extends multiple regression to curvilinear models and cat-
egorical predictors. The second edition has a new section on logistic regression
and a wrap-up example that ties together all the elements of multiple regression.
• Chapter 16, the capstone chapter, synthesizes key material from earlier chapters.
It has a unified framework approach to statistical models for the inference tech-
niques covered in the text. The second edition has a new section and expanded
coverage of one-way analysis of variance. The chapter also provides a brief
description of several business statistics methods beyond the scope of this text,
and concludes with comments on the future of business statistics and big data.

Our Approach
Statistical Thinking
For all of our improvements, examples, and updates in this edition of Business Statistics: A
First Course, we haven’t lost sight of our original mission—writing a modern business sta-
tistics text that addresses the importance of statistical thinking in making business decisions
that acknowledge how Statistics is actually used in business.

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 xvii
Preface

Statistics is practised with technology, and this insight informs everything from our
choice of forms for equations (favouring intuitive forms over calculation forms) to our
extensive use of real data. But most important, understanding the value of technology
allows us to focus on teaching statistical thinking rather than calculation. The questions
that motivate each of our hundreds of examples are not “How do you find the answer?” but
“How do you think about the answer?”, “How does it help you make a better decision?”,
and “How can you best communicate your decision?”
Our focus on statistical thinking ties the chapters of the book together. An introduc-
tory business statistics course covers an overwhelming number of new terms, concepts, and
methods, and it is vital that students see their core: how we can understand more about the
world and make better decisions by understanding what the data tell us. From this perspec-
tive, it is easy to see that the patterns we look for in graphs are the same as those we think
about when we prepare to make inferences.
We can see that the many ways to draw inferences from data are several applications of
the same core concepts. And it follows naturally that when we extend these basic ideas into
more complex (and even more realistic) situations, the same basic reasoning is still at the
core of our analyses.

Our Goal: Read This Book!

The best textbook in the world is of little value if it isn’t read. Here are some of the ways we
made Business Statistics: A First Course more approachable:
• Readability. We strive for a conversational, approachable style, and we introduce
anecdotes to maintain interest. Instructors report (to their amazement) that their stu-
dents read ahead of their assignments voluntarily. Students tell us (to their amazement)
that they actually enjoy the book.
• Focus on assumptions and conditions. More than any other textbook, Business Statis-
tics: A First Course emphasizes the need to verify assumptions when using statistical
procedures. We reiterate this focus throughout the examples and exercises. We make
every effort to provide templates that reinforce the practice of checking these assump-
tions and conditions, rather than rushing through the computations. Business deci-
sions have consequences. Blind calculations open the door to errors that could easily
be avoided by taking the time to graph the data, check assumptions and conditions,
and then check again that the results and residuals make sense.
• Emphasis on graphing and exploring data. We consistently emphasize the impor-
tance of displaying data. Examples often illustrate the value of examining data graphi-
cally, and the Exercises reinforce this. Good graphics reveal structures, patterns, and
occasional anomalies that could otherwise go unnoticed. These patterns often raise
new questions and inform both the path of a resulting statistical analysis and the busi-
ness decisions. Many new graphics found throughout the book demonstrate that the
simple structures that underlie even the most sophisticated statistical inferences are
the same ones we look for in the simplest examples. This helps tie the concepts of
the book together to tell a coherent story.
• Consistency. We work hard to avoid the “do what we say, not what we do” trap. Hav-
ing taught the importance of plotting data and checking assumptions and conditions,
we are careful to model that behaviour throughout the book. (Check the Exercises in
the chapter on multiple regression and you’ll find us still requiring and demonstrat-
ing the plots and checks that were introduced in the early chapters.) This consistency

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 xviii Preface

helps reinforce these fundamental principles and provides a familiar foundation for the
more sophisticated topics.
• The need to read. In this book, important concepts, definitions, and sample solutions
are not always set aside in boxes. The book needs to be read, so we’ve tried to make
the reading experience enjoyable. The common approach of skimming for definitions
or starting with the exercises and looking up examples just won’t work here. (It never
did work as a way to learn about and understand Statistics.)

Coverage
The topics covered in a business statistics course are, generally, mandated by our students’
needs in their studies and in their future professions. But the order of these topics and the
relative emphasis given to each is not well-established. Business Statistics: A First Course pres-
ents some topics sooner than or later than other texts. Although many chapters can be
taught in a different order, we urge you to consider the order we have chosen.
We’ve been guided in the order of topics by the fundamental goal of designing a
coherent course in which concepts and methods fit together to provide a new understand-
ing of how reasoning with data can uncover new and important truths. Each new topic
should fit into the growing structure of understanding that students develop throughout
the course. For example, we teach inference concepts with proportions first and then with
means. Most people have a wider experience with proportions, seeing them in polls and
advertising. And by starting with proportions, we can teach inference with the Normal
model and then introduce inference for means with the Student’s t-distribution.
We introduce the concepts of association, correlation, and regression early. Our expe-
rience in the classroom shows that introducing these fundamental ideas early makes Sta-
tistics useful and relevant even at the beginning of the course. By Chapter 4, students can
discuss relationships among variables in a meaningful way. Later in the semester, when
we discuss inference, it is natural and relatively easy to build on the fundamental concepts
learned earlier and enhance them with inferential methods.
GAISE Report
We’ve been guided in our choice of what to emphasize by the GAISE (Guidelines for
Assessment and Instruction in Statistics Education) Report, which emerged from extensive
studies of how students best learn Statistics. (www.amstat.org/education/gaise/GaiseCollege_
full.pdf ). Those recommendations, now officially adopted and recommended by the
American Statistical Association, urge (among other detailed suggestions) that statistics
education should
1. Emphasize statistical literacy and develop statistical thinking
2. Use real data
3. Stress conceptual understanding rather than mere knowledge of procedures
4. Foster active learning
5. Use technology for developing conceptual understanding and analyzing data
6. Make assessment a part of the learning process
In this sense, this book is thoroughly modern
This book recognizes both the changing curriculum and the changing pedagogy for
teaching introductory statistics. It focuses on application, streamlines and reorganizes
topics, sheds unneeded theoretical details, and recognizes learning styles of the current

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 xix
Preface

generation of students, making it an attractive choice for single-term courses at Canadian

business schools.
The Canadian edition uses illustrative case studies and chapter exercises that focus
on business and management of Canadian companies, large and small. The writing has
Canadian style, perspective, and sensibility, not just changes to spelling and metric mea-
surements. The book recognizes that Canada has public policy, governmental structure
and mandate (federal, provincial, and municipal), economic systems (banking and finance),
social services, health care, sports, and entertainment that are different from those of the
United States. While the book is indeed Canadian, it also shows how Statistics has no geo-
graphical borders and is a vital part of building and enhancing the global community.
Most chapter-opening examples ref lect a Canadian situation that is then used within
the chapter to illustrate new concepts. Throughout the chapters, exercises use Canadian
sources and examples, as do most Mini Case Study Projects.

Features
A textbook isn’t just words on a page: It is many features that come together to form a big
picture. The features in Business Statistics: A First Course provide a real-world context for
concepts, help students apply these concepts, promote problem solving, and integrate tech-
nology—all of which help students understand and see the big picture of business statistics.
Motivating Examples. Each chapter opens with a motivating example, often taken from
the authors’ consulting experiences. These companies—such as Angus Reid, Mountain
Equipment Co-op, Manulife Financial, and Canada Goose—enhance and illustrate the
story of each chapter, and show students how and why statistical thinking is so vital to mod-
ern business decision-making. We analyze the data from those companies throughout the
chapter.
Learning Objectives. Each chapter begins with a list of learning objectives. These are
brief but clear statements about what students are expected to know and to be able to dem-
onstrate by the end of the chapter (or the end of the course). These will also help instruc-
tors with course planning and classroom delivery. Each end-of-chapter exercise references
one or more learning objectives to guide students’ assessment of their progress with the
material.
Connections. Although the authors (and, we hope, the instructors) know how the chapters
of a textbook are related to each other and understand the logic behind the sequencing, it
may not be clear to students until they reach the end of the book. The Connections boxes
explain how the current chapter is related to the previous chapter(s), and why its position in
the sequence is appropriate.
Step-by-Step Guided Examples. The ability to clearly communicate statistical results
is crucial to helping Statistics contribute to business decision-making. To that end, some
examples in each chapter are presented as Guided Examples. A good solution is modelled in
the right column while commentary appears in the left column.
The overall analysis follows our innovative Plan, Do, Report template. That template
begins each analysis with a clear question about a decision and ends with a report which
answers that question. To emphasize the decision aspect of each example, we present the
Report step as a business memo that summarizes the results in the context of the example
and states a recommendation if the data are able to support one. In addition, whenever pos-
sible we include limitations of the analysis or models in the concluding memo.

A01_SHAR7740_02_SE_FM.indd 19 16/11/17 6:21 PM

 xx Preface

Mini Case Study Projects. Each chapter includes one or two Mini Case Study
Projects that use real data and ask students to investigate a question or make a deci-
sion. Students define the objective, plan the process, complete the analysis, and
report a conclusion. Data for the Mini Case Study Projects are available on MyLab
Business Statistics.
What Can Go Wrong? Each chapter contains an innovative section called What
Can Go Wrong? that highlights the most common statistical errors and the mis-
conceptions people have about Statistics. The most common mistakes for the new
user of statistical methods involve misusing a method, not miscalculating a statistic.
Most of the mistakes we discuss have been experienced by the authors in a business
context rather than a classroom situation. One of our goals is to arm students with
the tools to detect statistical errors and to offer practice in recognizing when Sta-
tistics is misused, whether intentional or not. In this spirit, some of our exercises
probe the understanding of such errors.
By Hand. Even though we encourage the use of technology to calculate statistical
quantities, we realize the pedagogical benefits of doing a calculation by hand. The
By Hand boxes break apart the calculation of some of the simpler formulas and help
the student through the calculation of a worked example.
Reality Check. We regularly remind students that Statistics is about understand-
ing the world and making decisions with data. Results that make no sense are prob-
ably wrong, no matter how carefully we think we did the calculations. Mistakes are
often easy to spot with a little thought, so we ask students to stop for a reality check
before interpreting results.
Notation Alert. Throughout this book, we emphasize the importance of clear
communication. Proper notation is part of the vocabulary of Statistics, but it can
be daunting. Students who know that in algebra n can stand for any variable may
be surprised to learn that in Statistics n is always the sample size. Statisticians dedi-
cate many letters and symbols for specific meanings ( b, e, n, p, q, r, s, t, and z, along
with many Greek letters all carry special connotations). Students learn more effec-
tively when they are clear about the letters and symbols statisticians use.
Just Checking. To help students check their understanding of material they’ve
just read, we ask questions at points throughout the chapter. These questions are
a quick check and most involve little calculation. The answers are at the end of
the exercise sets in each chapter so students can easily check themselves to be sure
they understand the key ideas. The questions can also be used to motivate class
discussion.
Math Boxes. In many chapters, we present the mathematical underpinnings of the
statistical methods and concepts. Different students learn in different ways, and even
the same student can understand the material by more than one path. By setting

A01_SHAR7740_02_SE_FM.indd 20 16/11/17 6:21 PM

 xxi
Preface

these proofs, derivations, and justifications apart from the narrative, we allow the
student to continue to follow the logical development of the topic at hand, yet also
make available the underlying mathematics for greater depth.
What Have We Learned? These chapter-ending summaries highlight new con-
cepts, define new terms introduced in the chapter, and list the skills that the stu-
dent should have acquired. Students can think of these as study guides. If they
understand the concepts in the summary, know the terms, and have the skills,
they’re probably ready for the exam.
Ethics in Action. Students are often surprised to learn that Statistics is not just
plugging numbers into formulas. Most statistical analyses require a fair amount of
judgment. The best guidance for these judgments is that we make an honest and
ethical attempt to learn the truth. Anything less than that can lead to poor and
even dangerous decisions. The ­Ethics in Action vignettes in each chapter illustrate
some of the judgments needed in statistical analyses, identify possible errors, link
the issues to widely accepted ethical guidelines in Statistics, and then propose ethi-
cally and statistically sound alternative approaches.
Exercises. We’ve worked hard to ensure that exercises contain relevant, modern,
and real-world questions. Many come from news stories; some come from recent
research articles. Whenever possible, the data are on MyLab Business Statistics (always
in a variety of formats) so students can explore them further. Sometimes, because
of the size of the data set, the data are only available electronically. Throughout the
book, we pair the exercises so that each odd-numbered exercise (with answer in the
back of the book) is followed by an even-numbered exercise on the same Statistics
topic. Exercises are roughly ordered within each chapter by both topic and by level
of difficulty.
Data Sources. Most of the data used in examples and exercises are from real-world
sources, and we list many sources in this edition. Whenever we can, we include ref-
erences to the internet data sources used, often in the form of URLs. As internet
users (and, thus, our students) know well, URLs can “break” as websites evolve.
To minimize the impact of such changes, we point as high in the address tree as
is practical. Moreover, the data themselves often change as more recent values
become available. The data we use are usually on MyLab Business Statistics. If you
seek the data—or an updated version of the data—on the internet, we try to direct
you to a good starting point.
Technology Help. In business, Statistics is practised with computers, but not with
a single software platform. Instead of emphasizing a particular statistics program,
at the end of each chapter, we summarize what students can find in the most com-
mon packages, often with annotated output. We then offer specific guidance for
one of the most common packages, Excel®, to help students get started with the
software of their choice.

A01_SHAR7740_02_SE_FM.indd 21 16/11/17 6:21 PM

 Resources for Success
MyLab Business Statistics® Online Course A First Course,
2nd Canadian edition, Sharpe/De Veaux/Velleman/Berkowitz
(access code required)
MyLab Business Statistics is available to accompany Pearson’s market leading text offerings.
To give students a consistent tone, voice, and teaching method each text’s flavor and approach is
tightly integrated throughout the accompanying MyLab Business Statistics course, making learning
the material as seamless as possible.

New! Launch Exercise

Data in Excel
Students are now able to quickly
and seamlessly launch data sets from
exercises within MyLab Business Statistics
into a Microsoft Excel spreadsheet for
easy analysis. As always, students may
also copy and paste exercise data sets
into most other software programs.

Business Insight Videos

Ten engaging videos showing managers at top companies using
statistics in their everyday work. Assignable questions built in to
your MyLab Business Statistics course encourage discussion.

StatTalk Videos StatTalk sample video list:

These 24 conceptual videos to help you
• Sampling and Parameters
actually understand statistics.
Fun-loving statistician Andrew Vickers • Not the Normal Distribution
takes to the streets of Brooklyn, New • Regression
York, to demonstrate important statistical • Absolute vs. Relative Risk
concepts through interesting stories and
real-life events. These fun and engaging
videos will help students actually
understand statistical concepts.

www.pearson.com/mylab
xxii

A01_SHAR7740_02_SE_FM.indd 22 16/11/17 6:21 PM

 Supplements
Technology Resources ment platform so that students can easily analyze data sets from
exercises and the text. In addition, Pearson |MyLab| Business
Statistics includes access to www.StatCrunch.com, a website
MyLab Business Statistics Online Course where users can access more than 15 000 shared data sets, con-
(access code required) duct online surveys, perform complex analyses using the pow-
erful statistical software, and generate compelling reports.
MyLab Business Statistics is a course management system that • Statistical Software Support: Knowing that students often
delivers proven results in helping individual students succeed. use external statistical software, we make it easy to copy our
• MyLab Business Statistics can be successfully implemented in data sets into software such as StatCrunch, Minitab, Excel,
any environment—lab-based, hybrid, fully online, t­ raditional— and more. Students have access to a variety of support tools—
and demonstrates the quantifiable difference that integrated Technology Tutorial Videos, Technology Study Cards, and
usage has on student retention, subsequent success, and overall Technology Manuals for select titles—to learn how to effec-
achievement. tively use statistical software.
• MyLab Business Statistics comprehensive online gradebook • Pearson eText: The Pearson eText gives students access to
automatically tracks students’ results on tests, quizzes, and their textbook anytime, anywhere. In addition to note taking,
homework, and in the study plan. Instructors can use the highlighting, and bookmarking, the Pearson eText offers inter-
gradebook to provide positive feedback or intervene if students active and sharing features. Instructors can share their com-
have trouble. Gradebook data can be easily exported to a vari- ments or highlights, and students can add their own, creating a
ety of spreadsheet programs, such as Microsoft Excel. You can tight community of learners within the class.
determine which points of data you want to export, and then
analyze the results to determine success.
MyLab Business Statistics provides engaging experiences that MathXL ® for Business Statistics Online
personalize, stimulate, and measure learning for each student. In
addition to the following resources, each course includes a full,
Course (access code required)
interactive online version of the accompanying textbook. MathXL ® is the homework and assessment engine that runs
MyLab Business Statistics. (MyLab Business Statistics is MathXL
• Data Sets: Data sets are available on MyLab Business Statistics plus a learning management system.) With MathXL for Business
and are formatted for use with Excel® and other statistics Statistics, instructors can create, edit, and assign online home-
software. work and tests using algorithmically generated exercises corre-
• Tutorial Exercises with Multimedia Learning Aids: lated at the objective level to the textbook, as well as
The homework and practice exercises in MyLab Business • Create and assign their own online exercises and import Test-
Statistics align with the exercises in the textbook, and they Gen tests for added f lexibility.
regenerate algorithmically to give students unlimited opportu- • Maintain records of all student work, tracked in MathXL’s
nity for practice and mastery. Exercises offer immediate helpful online gradebook.
feedback, guided solutions, sample problems, animations, vid-
eos, and eText clips for extra help at point of use. With MathXL for Business Statistics, students can

• StatTalk Videos: 24 Conceptual Videos to Help You Actually • Take chapter tests in MathXL and receive personalized study
Understand Statistics. Fun-loving statistician Andrew Vickers plans and/or personalized homework assignments based on
takes to the streets of Brooklyn, New York, to demonstrate their test results.
important statistical concepts through interesting stories and • Use the study plan and/or the homework to link directly to
real-life events. These fun and engaging videos will help stu- tutorial exercises for the objectives they need to study.
dents actually understand statistical concepts. Available with an • Access supplemental animations and video clips directly from
instructor’s user guide and assessment questions. selected exercises. Knowing that students often use external
• Business Insight Videos: Concept videos feature Deckers, statistical software, we make it easy to copy our data sets, both
Southwest Airlines, Starwood, and other companies and focus from the eText and the MyLab Business Statistics questions,
on statistical concepts as they pertain to the real world. into software like StatCrunch™, Minitab, Excel, and more.
• Getting Ready for Statistics: A library of questions now MathXL for Business Statistics is available to qualified adopters.
appears within each MyLab Business Statistics course to offer the
For more information, visit our website at www.mathxl.com, or
developmental math topics students need for the course. These
contact your Pearson representative.
can be assigned as a prerequisite to other assignments, if desired.
• Conceptual Question Library: In addition to algorithmi-
cally regenerated questions that are aligned with the textbook,
there is a library of 1000 conceptual questions available in the
Instructor Supplements
­assessment manager that requires students to apply their statis- Instructor’s Solutions Manual. This manual contains solutions
tical understanding. for all end-of-chapter exercises as well as the Mini Case Study
• StatCrunchTM: MyLab Business Statistics integrates the web- Projects. Available within MyLab Business Statistics or at www.
based statistical software StatCrunch within the online assess- pearson.com.

xxiii

A01_SHAR7740_02_SE_FM.indd 23 16/11/17 6:44 PM

 xxiv Supplements

Instructor’s Resource Guide. This guide contains chapter- Computerized Test Bank. Pearson’s computerized test banks
by-chapter comments on the major concepts, tips on presenting allow instructors to filter and select questions to create quizzes,
topics (and what to avoid), teaching examples, suggested assign- test, or homework. Instructors can revise questions or add their
ments, basic exercises, and web links as well as lists of other own, and may be able to choose print or online options. These
resources. Available within MyLab Business Statistics or at www. questions are also available in Microsoft Word format.
pearson.com. Image Library. An image library with electronic copies of
Business Insight Video Guide to accompany Statistics. key figures and tables from the text is available within MyLab
Written to accompany the Business Insight Videos, this guide ­Business Statistics or at www.pearson.com.
includes a summary of the video, video-specific questions and
Learning Solutions Managers. Pearson’s Learning Solutions
answers that can be used for assessment or classroom discussion, a
Managers work with faculty and campus course designers to
correlation to relevant chapters in Statistics, concept-centred teach-
ensure that Pearson technology products, assessment tools, and
ing points, and useful web links. The Video Guide is available for
online course materials are tailored to meet your specific needs.
download from MyLab Business Statistics or at www.pearson.com. This highly qualified team is dedicated to helping schools take
PowerPoint® Lecture Slides. The PowerPoint® package pro- full advantage of a wide range of educational resources by assist-
vides an outline to use in a lecture setting, presenting definitions, ing in the integration of a variety of instructional materials and
key concepts, and figures from the text. These slides are available media formats. Your local Pearson sales representative can pro-
within MyLab Business Statistics or at www.pearson.com. vide you with more details on this service program.

A01_SHAR7740_02_SE_FM.indd 24 17/11/17 10:32 AM

Another Random Scribd Document
with Unrelated Content
§ 75. Commissioned officers only, are allowed to give their parole,
and they must do it with the permission of their superior, as long as
a superior in rank is within reach.
Paroling must always take place by the exchange of two written
documents, in which the name and rank of the paroled individual are
accurately and truthfully stated.

§ 76. No wholesale paroling, done by an officer for a number of

inferiors in rank, is permitted or valid.
No paroling on the battle-field; no paroling of entire portions of
troops after a battle; no dismissal of large numbers of prisoners with
a general declaration that they are paroled, is permitted, or of any
value.
Every officer who fails in this respect, is to be punished and
cashiered.

§ 77. In capitulations for the surrender of strong places or fortified

camps, the commanding officer, in cases of urgent necessity, may
stipulate that the troops under his command shall not fight again in
the war until exchanged; [but no more.]

§ 78. The usual pledge given in the parole is not to serve in the
existing war, or not to serve for a stated time, unless exchanged.
This pledge refers only to the active service in the field, against the
paroling belligerent or his allies actively engaged in the same war. It
does not refer to internal service, such as recruiting or drilling the
recruits, fortifying places not besieged, to quelling civil commotions,
to fighting against belligerents unconnected with the paroling
belligerents, or to civil or diplomatic service for which the paroled
officer may be employed.
§ 79. If the government does not approve of the parole, the paroled
officer must return into captivity, and should the enemy refuse to
receive him, he is free of his parole.

§ 80. A belligerent government may declare by a general order,

whether it will allow paroling, and on what conditions it will allow it.
Such order is communicated to the enemy.

§ 81. No prisoner of war can be forced by the hostile government to

parole himself, and no government is obliged to parole prisoners of
war, or to parole all captured officers, if it paroles any. As the
pledging of the parole is an individual act, so is paroling, on the
other hand, an act of choice on the part of the belligerent.

§ 82. Civil officers kept as prisoners of war, may be paroled; but no

citizens without office, no citizens in a merchant vessel stopped by a
privateer or man-of-war, can be paroled. Nor can inhabitants of
places or territories occupied by the enemy, be paroled by the latter.
Their government does not lose its claim for military service upon
such persons, should they give their parole, for it is of no value. If
they should be paroled, and, being captured at a later period as
soldiers, should not be treated by the captor as prisoners of war,
such conduct of the enemy would be ground for retaliation.
 ARMISTICE. CAPITULATION.

§ 83. An armistice is the cessation of active hostilities for a period,

agreed upon between belligerents. It must be agreed upon in
writing, and duly ratified by the highest authorities of the contending
parties.

§ 84. Armistices may be general, and valid for all points and lines of
the belligerents, or special, that is, referring to certain troops or
certain territories only.
Armistices may be concluded for a definite time or for an unsettled
time, with a stipulated period, which must elapse between the notice
given by either party that hostilities will be resumed and the actual
resumption of hostilities; or they may be concluded for a definite
time, and so much longer as may be found convenient for the
belligerents, with the obligation of giving due notice of the
resumption of hostilities, a fixed time previous to the actual
resumption.

§ 85. The motives which induce the one or the other belligerent to
conclude an armistice, whether it be expected to be preliminary for
an ultimate treaty of peace, or to prepare during the armistice for a
more vigorous prosecution of the war, does in no way affect the
character of the armistice itself.

§ 86. Every armistice involves not only the idea of the cessation of
actual hostility, that is of attacking the enemy, but also that the
hostile armies or troops remain in status quo with reference to the
position of the hostile armies opposite to or fronting one another.
Neither belligerent is allowed to extend his troops to the injury of
the other, or to make any change in his front; but each belligerent in
the open field, may do whatever he may deem advantageous for
securing or fortifying himself in his position, if it can be done without
extending or advancing his lines or posts, and he may receive
additional troops, supplies, or ammunition. He may levy new troops
during the armistice.

§ 87. The law of war is in full action during an armistice except only,
as to fighting and hostile changes of the front; or if the armistice is a
general one, as to the sending hostile expeditions to distant places.

§ 88. Armistices are binding for the belligerent governments from

the day of the agreed commencement; but the officers of the armies
are responsible from the day only when they receive official
information of the conclusion of the armistice. If any injury results to
one or the other party from this difference, which cannot be avoided
in war, it belongs to the province of the belligerent governments to
seek redress, and to provide for the remedy. Military officers having
thus done the injury cannot be made responsible for the same in any
way, nor do these injuries amount to cases requiring retaliation.

§ 89. Commanding officers have the right to conclude armistices

extending to the district over which their command extends, but
such armistice is subject to the ratification of the superior authority,
and ceases so soon as it is made known that the armistice is not
ratified, even if a certain time for the elapsing between giving notice
of cessation and the resumption of hostilities should have been
stipulated for.
§ 90. It is incumbent upon the contracting parties of an armistice, to
stipulate what intercourse of persons or traffic between the
inhabitants of the territories occupied by the hostile armies shall be
allowed, if any.
If nothing is stipulated the intercourse remains suspended as during
actual hostilities.
An armistice is not a partial or a temporary peace; it is only the
suspension of attack or actual injury.

§ 91. When an armistice is concluded between a fortified place and

the army besieging it, it is agreed by all the authorities on this
subject, that the besieger must cease all extension, perfection, or
advance of his attacking works as much so as from the attacks by
main force.
But there is a difference of opinion among the martial jurists,
whether the besieged have the right to repair breaches or to erect
new works of defence within the place during an armistice.
[It is therefore declared by the United States, that they neither claim
for themselves, nor allow to their enemies, the right of the besieged
to repair breeches or to erect new works of defence during an
armistice, unless the contrary be distinctly stipulated in the
agreement concluding the armistice.]
The United States expect every American officer to stipulate
distinctly for the one or the other, in an armistice which he may
conclude with the enemy.

§ 92. So soon as a capitulation is signed, the capitulator has no right

to demolish, destroy, or injure the works, arms, stores, or
ammunition, in his possession, during the time which elapses
between the signing and the execution of the capitulation, unless
otherwise stipulated in the same.
§ 93. So soon as an armistice is broken, hostilities recommence in all
their vigor on all points, without previous notice.
The injured belligerent government must seek redress.
[Prisoners captured during a breach of the armistice, are
nevertheless prisoners of war, whether they are officers or privates.]

§ 94. Armistices and capitulations are sacredly to be observed, in

good faith and military honor; and since capitulations imply many
conditions and measures which cannot be altered or retraced, if the
government does not ratify them, the utmost caution and undaunted
fortitude must prevail in agreeing to them.

§ 95. Belligerents frequently conclude an armistice, while their

plenipotentiaries are met to discuss the conditions of a treaty of
peace; but, as often, the plenipotentiaries meet without a
preliminary armistice. In the latter case, the war is carried on
without any abatement, and the army must not suffer itself to be
influenced by any inconvenience which the changes of fortune in the
field may exercise on the diplomatic discussions. It belongs to the
belligerent governments to adjust these inconveniences, and not to
the generals to slacken the war on these, or, indeed, on any other
occasions.
 ASSASSINATION.

§ 96. The Law of War does not allow proclaiming either an individual
belonging to the hostile army, or a citizen, or a subject of the hostile
government, an outlaw, that may be slain without trial by any captor,
any more than the modern law of peace allows such international
outlawry; on the contrary, it abhors such outrage. The sternest
retaliation would follow the murder committed in consequence of
such proclamation, made by whatever authority.

§ 97. The American people, as all civilized nations, look with horror
upon offers of rewards for the assassination of any enemies, as
relapses into the disgraceful courses of savage times.
The assassination of a prisoner of war, is a murder of the blackest
kind, and if it takes place, in consequence of the offer of a reward or
not, and remains unpunished by the hostile government, the Law of
War authorizes the most impressive retaliation, so that the repetition
of a crime most dangerous to civilization, may be prevented, and a
downward course into barbarity may be arrested.

Suggestions may be addressed to Francis

Lieber, No. 48 East 34th street, New York
City.
 TRANSCRIBER’S NOTES
1. Silently corrected typographical errors.
2. Retained anachronistic and non-standard
spellings as printed.
 *** END OF THE PROJECT GUTENBERG EBOOK A CODE FOR THE
GOVERNMENT OF ARMIES IN THE FIELD, ***

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