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Introductory Business Statistics

Formula Review

Introductory Business StatisticsFormula Review

10.1 Comparing Two Independent Population Means

Standard error: SE = ( s 1 ) 2 n 1 + ( s 2 ) 2 n 2 ( s 1 ) 2 n 1 + ( s 2 ) 2 n 2

Test statistic (t-score): tc = ( x ¯ 1 x ¯ 2 )δ0 ( s 1 ) 2 n 1 + ( s 2 ) 2 n 2 ( x ¯ 1 x ¯ 2 )δ0 ( s 1 ) 2 n 1 + ( s 2 ) 2 n 2

Degrees of freedom:
df=  ( ( s 1 ) 2 n 1 +  ( s 2 ) 2 n 2 ) 2 ( 1 n 1 1 ) ( ( s 1 ) 2 n 1 ) 2 +( 1 n 2 1 ) ( ( s 2 ) 2 n 2 ) 2 df=  ( ( s 1 ) 2 n 1 +  ( s 2 ) 2 n 2 ) 2 ( 1 n 1 1 ) ( ( s 1 ) 2 n 1 ) 2 +( 1 n 2 1 ) ( ( s 2 ) 2 n 2 ) 2

where:

s1s1 and s2s2 are the sample standard deviations, and n1n1 and n2n2 are the sample sizes.

x ¯ 1 x ¯ 1 and x ¯ 2 x ¯ 2 are the sample means.

10.2 Cohen's Standards for Small, Medium, and Large Effect Sizes

Cohen’s d is the measure of effect size:

d= x ¯ 1 x ¯ 2 s pooled d= x ¯ 1 x ¯ 2 s pooled
where s pooled = ( n 1 1) s 1 2 +( n 2 1) s 2 2 n 1 + n 2 2 s pooled = ( n 1 1) s 1 2 +( n 2 1) s 2 2 n 1 + n 2 2

10.3 Test for Differences in Means: Assuming Equal Population Variances

tc=(x¯1x¯2)δ0Sp2(1n1+1n2)tc=(x¯1x¯2)δ0Sp2(1n1+1n2)

where Sp2Sp2 is the pooled variance given by the formula:

Sp2=(n11)s12-(n21)s22n1+n22Sp2=(n11)s12-(n21)s22n1+n22

10.4 Comparing Two Independent Population Proportions

Pooled Proportion: pc = x A  +  x B n A  +  n B x A  +  x B n A  +  n B

Test Statistic (z-score): Zc= ( p A p B ) p c (1 p c )( 1 n A + 1 n B ) Zc= ( p A p B ) p c (1 p c )( 1 n A + 1 n B )

where

pA'pA' and pB'pB' are the sample proportions, pApA and pBpBare the population proportions,

Pc is the pooled proportion, and nA and nB are the sample sizes.

10.5 Two Population Means with Known Standard Deviations

Test Statistic (z-score):

Zc= ( x 1 x 2 )δ0 ( σ 1 ) 2 n 1 + ( σ 2 ) 2 n 2 Zc= ( x 1 x 2 )δ0 ( σ 1 ) 2 n 1 + ( σ 2 ) 2 n 2

where:
σ1σ1 and σ2σ2 are the known population standard deviations. n1 and n2 are the sample sizes. x 1 x 1 and x 2 x 2 are the sample means. μ1 and μ2 are the population means.

10.6 Matched or Paired Samples

Test Statistic (t-score): tc = x d μ d ( s d n ) x d μ d ( s d n )

where:

x d x d is the mean of the sample differences. μd is the mean of the population differences. sd is the sample standard deviation of the differences. n is the sample size.

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