Skip to Content
OpenStax Logo
  1. Preface
  2. 1 Sampling and Data
    1. Introduction
    2. 1.1 Definitions of Statistics, Probability, and Key Terms
    3. 1.2 Data, Sampling, and Variation in Data and Sampling
    4. 1.3 Levels of Measurement
    5. 1.4 Experimental Design and Ethics
    6. Key Terms
    7. Chapter Review
    8. Homework
    9. References
    10. Solutions
  3. 2 Descriptive Statistics
    1. Introduction
    2. 2.1 Display Data
    3. 2.2 Measures of the Location of the Data
    4. 2.3 Measures of the Center of the Data
    5. 2.4 Sigma Notation and Calculating the Arithmetic Mean
    6. 2.5 Geometric Mean
    7. 2.6 Skewness and the Mean, Median, and Mode
    8. 2.7 Measures of the Spread of the Data
    9. Key Terms
    10. Chapter Review
    11. Formula Review
    12. Practice
    13. Homework
    14. Bringing It Together: Homework
    15. References
    16. Solutions
  4. 3 Probability Topics
    1. Introduction
    2. 3.1 Terminology
    3. 3.2 Independent and Mutually Exclusive Events
    4. 3.3 Two Basic Rules of Probability
    5. 3.4 Contingency Tables and Probability Trees
    6. 3.5 Venn Diagrams
    7. Key Terms
    8. Chapter Review
    9. Formula Review
    10. Practice
    11. Bringing It Together: Practice
    12. Homework
    13. Bringing It Together: Homework
    14. References
    15. Solutions
  5. 4 Discrete Random Variables
    1. Introduction
    2. 4.1 Hypergeometric Distribution
    3. 4.2 Binomial Distribution
    4. 4.3 Geometric Distribution
    5. 4.4 Poisson Distribution
    6. Key Terms
    7. Chapter Review
    8. Formula Review
    9. Practice
    10. Homework
    11. References
    12. Solutions
  6. 5 Continuous Random Variables
    1. Introduction
    2. 5.1 Properties of Continuous Probability Density Functions
    3. 5.2 The Uniform Distribution
    4. 5.3 The Exponential Distribution
    5. Key Terms
    6. Chapter Review
    7. Formula Review
    8. Practice
    9. Homework
    10. References
    11. Solutions
  7. 6 The Normal Distribution
    1. Introduction
    2. 6.1 The Standard Normal Distribution
    3. 6.2 Using the Normal Distribution
    4. 6.3 Estimating the Binomial with the Normal Distribution
    5. Key Terms
    6. Chapter Review
    7. Formula Review
    8. Practice
    9. Homework
    10. References
    11. Solutions
  8. 7 The Central Limit Theorem
    1. Introduction
    2. 7.1 The Central Limit Theorem for Sample Means
    3. 7.2 Using the Central Limit Theorem
    4. 7.3 The Central Limit Theorem for Proportions
    5. 7.4 Finite Population Correction Factor
    6. Key Terms
    7. Chapter Review
    8. Formula Review
    9. Practice
    10. Homework
    11. References
    12. Solutions
  9. 8 Confidence Intervals
    1. Introduction
    2. 8.1 A Confidence Interval for a Population Standard Deviation, Known or Large Sample Size
    3. 8.2 A Confidence Interval for a Population Standard Deviation Unknown, Small Sample Case
    4. 8.3 A Confidence Interval for A Population Proportion
    5. 8.4 Calculating the Sample Size n: Continuous and Binary Random Variables
    6. Key Terms
    7. Chapter Review
    8. Formula Review
    9. Practice
    10. Homework
    11. References
    12. Solutions
  10. 9 Hypothesis Testing with One Sample
    1. Introduction
    2. 9.1 Null and Alternative Hypotheses
    3. 9.2 Outcomes and the Type I and Type II Errors
    4. 9.3 Distribution Needed for Hypothesis Testing
    5. 9.4 Full Hypothesis Test Examples
    6. Key Terms
    7. Chapter Review
    8. Formula Review
    9. Practice
    10. Homework
    11. References
    12. Solutions
  11. 10 Hypothesis Testing with Two Samples
    1. Introduction
    2. 10.1 Comparing Two Independent Population Means
    3. 10.2 Cohen's Standards for Small, Medium, and Large Effect Sizes
    4. 10.3 Test for Differences in Means: Assuming Equal Population Variances
    5. 10.4 Comparing Two Independent Population Proportions
    6. 10.5 Two Population Means with Known Standard Deviations
    7. 10.6 Matched or Paired Samples
    8. Key Terms
    9. Chapter Review
    10. Formula Review
    11. Practice
    12. Homework
    13. Bringing It Together: Homework
    14. References
    15. Solutions
  12. 11 The Chi-Square Distribution
    1. Introduction
    2. 11.1 Facts About the Chi-Square Distribution
    3. 11.2 Test of a Single Variance
    4. 11.3 Goodness-of-Fit Test
    5. 11.4 Test of Independence
    6. 11.5 Test for Homogeneity
    7. 11.6 Comparison of the Chi-Square Tests
    8. Key Terms
    9. Chapter Review
    10. Formula Review
    11. Practice
    12. Homework
    13. Bringing It Together: Homework
    14. References
    15. Solutions
  13. 12 F Distribution and One-Way ANOVA
    1. Introduction
    2. 12.1 Test of Two Variances
    3. 12.2 One-Way ANOVA
    4. 12.3 The F Distribution and the F-Ratio
    5. 12.4 Facts About the F Distribution
    6. Key Terms
    7. Chapter Review
    8. Formula Review
    9. Practice
    10. Homework
    11. References
    12. Solutions
  14. 13 Linear Regression and Correlation
    1. Introduction
    2. 13.1 The Correlation Coefficient r
    3. 13.2 Testing the Significance of the Correlation Coefficient
    4. 13.3 Linear Equations
    5. 13.4 The Regression Equation
    6. 13.5 Interpretation of Regression Coefficients: Elasticity and Logarithmic Transformation
    7. 13.6 Predicting with a Regression Equation
    8. 13.7 How to Use Microsoft Excel® for Regression Analysis
    9. Key Terms
    10. Chapter Review
    11. Practice
    12. Solutions
  15. A | Statistical Tables
  16. B | Mathematical Phrases, Symbols, and Formulas
  17. Index

Welcome to Introductory Business Statistics, an OpenStax resource. This textbook was written to increase student access to high-quality learning materials, maintaining highest standards of academic rigor at little to no cost.

About OpenStax

OpenStax is a nonprofit based at Rice University, and it’s our mission to improve student access to education. Our first openly licensed college textbook was published in 2012, and our library has since scaled to over 25 books for college and AP® courses used by hundreds of thousands of students. OpenStax Tutor, our low-cost personalized learning tool, is being used in college courses throughout the country. Through our partnerships with philanthropic foundations and our alliance with other educational resource organizations, OpenStax is breaking down the most common barriers to learning and empowering students and instructors to succeed.

About OpenStax resources


Introductory Business Statistics is licensed under a Creative Commons Attribution 4.0 International (CC BY) license, which means that you can distribute, remix, and build upon the content, as long as you provide attribution to OpenStax and its content contributors.

Because our books are openly licensed, you are free to use the entire book or pick and choose the sections that are most relevant to the needs of your course. Feel free to remix the content by assigning your students certain chapters and sections in your syllabus, in the order that you prefer. You can even provide a direct link in your syllabus to the sections in the web view of your book.

Instructors also have the option of creating a customized version of their OpenStax book. The custom version can be made available to students in low-cost print or digital form through their campus bookstore. Visit the Instructor Resources section of your book page on for more information.


All OpenStax textbooks undergo a rigorous review process. However, like any professional-grade textbook, errors sometimes occur. Since our books are web based, we can make updates periodically when deemed pedagogically necessary. If you have a correction to suggest, submit it through the link on your book page on Subject matter experts review all errata suggestions. OpenStax is committed to remaining transparent about all updates, so you will also find a list of past errata changes on your book page on


You can access this textbook for free in web view or PDF through, and for a low cost in print.

About Introductory Business Statistics

Introductory Business Statistics is designed to meet the scope and sequence requirements of the one-semester statistics course for business, economics, and related majors. Core statistical concepts and skills have been augmented with practical business examples, scenarios, and exercises. The result is a meaningful understanding of the discipline which will serve students in their business careers and real-world experiences.

Coverage and scope

Introductory Business Statistics began as a customized version of OpenStax Introductory Statistics by Barbara Illowsky and Susan Dean. Statistics faculty at The University of Oklahoma have used the business statistics adaptation for several years, and the author has continually refined it based on student success and faculty feedback.

The book is structured in a similar manner to most traditional statistics textbooks. The most significant topical changes occur in the latter chapters on regression analysis. Discrete probability density functions have been reordered to provide a logical progression from simple counting formulas to more complex continuous distributions. Many additional homework assignments have been added, as well as new, more mathematical examples.

Introductory Business Statistics places a significant emphasis on the development and practical application of formulas so that students have a deeper understanding of their interpretation and application of data. To achieve this unique approach, the author included a wealth of additional material and purposely de-emphasized the use of the scientific calculator. Specific changes regarding formula use include:

  • Expanded discussions of the combinatorial formulas, factorials, and sigma notation
  • Adjustments to explanations of the acceptance/rejection rule for hypothesis testing, as well as a focus on terminology regarding confidence intervals
  • Deep reliance on statistical tables for the process of finding probabilities (which would not be required if probabilities relied on scientific calculators)
  • Continual and emphasized links to the Central Limit Theorem throughout the book; Introductory Business Statistics consistently links each test statistic back to this fundamental theorem in inferential statistics

Another fundamental focus of the book is the link between statistical inference and the scientific method. Business and economics models are fundamentally grounded in assumed relationships of cause and effect. They are developed to both test hypotheses and to predict from such models. This comes from the belief that statistics is the gatekeeper that allows some theories to remain and others to be cast aside for a new perspective of the world around us. This philosophical view is presented in detail throughout and informs the method of presenting the regression model, in particular.

The correlation and regression chapter includes confidence intervals for predictions, alternative mathematical forms to allow for testing categorical variables, and the presentation of the multiple regression model.

Pedagogical features

  • Examples are placed strategically throughout the text to show students the step-by-step process of interpreting and solving statistical problems. To keep the text relevant for students, the examples are drawn from a broad spectrum of practical topics; these include examples about college life and learning, health and medicine, retail and business, and sports and entertainment.
  • Practice, Homework, and Bringing It Together give the students problems at various degrees of difficulty while also including real-world scenarios to engage students.

Additional resources

Student and instructor resources

We’ve compiled additional resources for both students and instructors, including Getting Started Guides, an instructor solution manual, and PowerPoint slides. Instructor resources require a verified instructor account, which you can apply for when you log in or create your account on Take advantage of these resources to supplement your OpenStax book.

Community Hubs

OpenStax partners with the Institute for the Study of Knowledge Management in Education (ISKME) to offer Community Hubs on OER Commons – a platform for instructors to share community-created resources that support OpenStax books, free of charge. Through our Community Hubs, instructors can upload their own materials or download resources to use in their own courses, including additional ancillaries, teaching material, multimedia, and relevant course content. We encourage instructors to join the hubs for the subjects most relevant to your teaching and research as an opportunity both to enrich your courses and to engage with other faculty.  

To reach the Community Hubs, visit

Technology partners

As allies in making high-quality learning materials accessible, our technology partners offer optional low-cost tools that are integrated with OpenStax books. To access the technology options for your text, visit your book page on

About the authors

Senior contributing authors

Alexander Holmes, The University of Oklahoma

Barbara Illowsky, DeAnza College

Susan Dean, DeAnza College

Contributing authors

Kevin Hadley, Analyst, Federal Reserve Bank of Kansas City


Birgit Aquilonius, West Valley College
Charles Ashbacher, Upper Iowa University - Cedar Rapids
Abraham Biggs, Broward Community College
Daniel Birmajer, Nazareth College
Roberta Bloom, De Anza College
Bryan Blount, Kentucky Wesleyan College
Ernest Bonat, Portland Community College
Sarah Boslaugh, Kennesaw State University
David Bosworth, Hutchinson Community College
Sheri Boyd, Rollins College
George Bratton, University of Central Arkansas
Franny Chan, Mt. San Antonio College
Jing Chang, College of Saint Mary
Laurel Chiappetta, University of Pittsburgh
Lenore Desilets, De Anza College
Matthew Einsohn, Prescott College
Ann Flanigan, Kapiolani Community College
David French, Tidewater Community College
Mo Geraghty, De Anza College
Larry Green, Lake Tahoe Community College
Michael Greenwich, College of Southern Nevada
Inna Grushko, De Anza College
Valier Hauber, De Anza College
Janice Hector, De Anza College
Jim Helmreich, Marist College
Robert Henderson, Stephen F. Austin State University
Mel Jacobsen, Snow College
Mary Jo Kane, De Anza College
John Kagochi, University of Houston - Victoria
Lynette Kenyon, Collin County Community College
Charles Klein, De Anza College
Alexander Kolovos
Sheldon Lee, Viterbo University
Sara Lenhart, Christopher Newport University
Wendy Lightheart, Lane Community College
Vladimir Logvenenko, De Anza College
Jim Lucas, De Anza College
Suman Majumdar, University of Connecticut
Lisa Markus, De Anza College
Miriam Masullo, SUNY Purchase
Diane Mathios, De Anza College
Robert McDevitt, Germanna Community College
John Migliaccio, Fordham University
Mark Mills, Central College
Cindy Moss, Skyline College
Nydia Nelson, St. Petersburg College
Benjamin Ngwudike, Jackson State University
Jonathan Oaks, Macomb Community College
Carol Olmstead, De Anza College
Barbara A. Osyk, The University of Akron
Adam Pennell, Greensboro College
Kathy Plum, De Anza College
Lisa Rosenberg, Elon University
Sudipta Roy, Kankakee Community College
Javier Rueda, De Anza College
Yvonne Sandoval, Pima Community College
Rupinder Sekhon, De Anza College
Travis Short, St. Petersburg College
Frank Snow, De Anza College
Abdulhamid Sukar, Cameron University
Jeffery Taub, Maine Maritime Academy
Mary Teegarden, San Diego Mesa College
John Thomas, College of Lake County
Philip J. Verrecchia, York College of Pennsylvania
Dennis Walsh, Middle Tennessee State University
Cheryl Wartman, University of Prince Edward Island
Carol Weideman, St. Petersburg College
Kyle S. Wells, Dixie State University
Andrew Wiesner, Pennsylvania State University

Order a print copy

As an Amazon Associate we earn from qualifying purchases.


Want to cite, share, or modify this book? This book is Creative Commons Attribution License 4.0 and you must attribute OpenStax.

Attribution information
  • If you are redistributing all or part of this book in a print format, then you must include on every physical page the following attribution:
    Access for free at
  • If you are redistributing all or part of this book in a digital format, then you must include on every digital page view the following attribution:
    Access for free at
Citation information

© Dec 15, 2020 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License 4.0 license. The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.