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Statistics for Business

and Economics
Anderson Sweeney Williams
Slides by
John Loucks
St. Edward’s University

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
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Chapter 2, Part B
Descriptive Statistics:
Tabular and Graphical Presentations
 Exploratory Data Analysis: Stem-and-Leaf Display
 Crosstabulation and Scatter Diagram

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Exploratory Data Analysis

n The techniques of exploratory data analysis consist of

simple arithmetic and easy-to-draw pictures that can
be used to summarize data quickly.
n One such technique is the stem-and-leaf display.

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Stem-and-Leaf Display

n A stem-and-leaf display shows both the rank order

and shape of the distribution of the data.
n It is similar to a histogram on its side, but it has the
advantage of showing the actual data values.
n The first digits of each data item are arranged to the
left of a vertical line.
n To the right of the vertical line we record the last
digit for each item in rank order.
n Each line in the display is referred to as a stem.
n Each digit on a stem is a leaf.

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Example: Hudson Auto Repair

The manager of Hudson Auto would like to gain a

better understanding of the cost of parts used in the
engine tune-ups performed in the shop. She examines
50 customer invoices for tune-ups. The costs of parts,
rounded to the nearest dollar, are listed on the next
slide.

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Stem-and-Leaf Display

n Example: Hudson Auto Repair

Sample of Parts Cost ($) for 50 Tune-ups
91 78 93 57 75 52 99 80 97 62
71 69 72 89 66 75 79 75 72 76
104 74 62 68 97 105 77 65 80 109
85 97 88 68 83 68 71 69 67 74
62 82 98 101 79 105 79 69 62 73

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Stem-and-Leaf Display

n Example: Hudson Auto Repair

5 2 7
6 2 2 2 2 5 6 7 8 8 8 9 9 9
7 1 1 2 2 3 4 4 5 5 5 6 7 8 9 9 9
8 0 0 2 3 5 8 9
9 1 3 7 7 7 8 9
10 1 4 5 5 9

a stem
a leaf

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Stretched Stem-and-Leaf Display

n If we believe the original stem-and-leaf display has

condensed the data too much, we can stretch the
display vertically by using two stems for each
leading digit(s).
n Whenever a stem value is stated twice, the first value
corresponds to leaf values of 0 - 4, and the second
value corresponds to leaf values of 5 - 9.

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Stretched Stem-and-Leaf Display

n Example: Hudson Auto Repair

5 2
5 7
6 2 2 2 2
6 5 6 7 8 8 8 9 9 9
7 1 1 2 2 3 4 4
7 5 5 5 6 7 8 9 9 9
8 0 0 2 3
8 5 8 9
9 1 3
9 7 7 7 8 9
10 1 4
10 5 5 9
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Stem-and-Leaf Display

n Leaf Units
• A single digit is used to define each leaf.
• In the preceding example, the leaf unit was 1.
• Leaf units may be 100, 10, 1, 0.1, and so on.
• Where the leaf unit is not shown, it is assumed
to equal 1.
• The leaf unit indicates how to multiply the stem-
and-leaf numbers in order to approximate the
original data.

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Example: Leaf Unit = 0.1

If we have data with values such as

8.6 11.7 9.4 9.1 10.2 11.0 8.8

a stem-and-leaf display of these data will be

Leaf Unit = 0.1

8 6 8
9 1 4
10 2
11 0 7

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Example: Leaf Unit = 10

If we have data with values such as

1806 1717 1974 1791 1682 1910 1838

a stem-and-leaf display of these data will be

Leaf Unit = 10
16 8 The 82 in 1682
17 1 9 is rounded down
18 0 3 to 80 and is
represented as an 8.
19 1 7

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Crosstabulations and Scatter Diagrams

n Thus far we have focused on methods that are used

to summarize the data for one variable at a time.
n Often a manager is interested in tabular and
graphical methods that will help understand the
relationship between two variables.
n Crosstabulation and a scatter diagram are two
methods for summarizing the data for two variables
simultaneously.

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Crosstabulation

n A crosstabulation is a tabular summary of data for

two variables.
n Crosstabulation can be used when:
• one variable is qualitative and the other is
quantitative,
• both variables are qualitative, or
• both variables are quantitative.
n The left and top margin labels define the classes for
the two variables.

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Crosstabulation

n Example: Finger Lakes Homes

The number of Finger Lakes homes sold for each
style and price for the past two years is shown below.
quantitative categorical
variable variable
Price Home Style
Range Colonial Log Split A-Frame Total
< $200,000 18 6 19 12 55
> $200,000 12 14 16 3 45

Total 30 20 35 15 100

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Crosstabulation

n Example: Finger Lakes Homes

Insights Gained from Preceding Crosstabulation
• The greatest number of homes (19) in the sample
are a split-level style and priced at less than
$200,000.
• Only three homes in the sample are an A-Frame
style and priced at $200,000 or more.

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Crosstabulation
Frequency
n Example: Finger Lakes Homes distribution
for the
price range
variable

Price Home Style

Range Colonial Log Split A-Frame Total
< $200,000 18 6 19 12 55
> $200,000 12 14 16 3 45

Total 30 20 35 15 100

Frequency distribution for

the home style variable
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Crosstabulation: Row or Column Percentages

n Converting the entries in the table into row

percentages or column percentages can provide
additional insight about the relationship between
the two variables.

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Crosstabulation: Row Percentages

n Example: Finger Lakes Homes

Price Home Style

Range Colonial Log Split A-Frame Total
< $200,000 32.73 10.91 34.55 21.82 100
> $200,000 26.67 31.11 35.56 6.67 100

Note: row totals are actually 100.01 due to rounding.

(Colonial and > $200K)/(All > $200K) x 100 = (12/45) x 100

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Crosstabulation: Column Percentages

n Example: Finger Lakes Homes

Price Home Style

Range Colonial Log Split A-Frame
< $200,000 60.00 30.00 54.29 80.00
> $200,000 40.00 70.00 45.71 20.00

Total 100 100 100 100

(Colonial and > $200K)/(All Colonial) x 100 = (12/30) x 100

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Crosstabulation: Simpson’s Paradox

n Data in two or more crosstabulations are often

aggregated to produce a summary crosstabulation.
n We must be careful in drawing conclusions about the
relationship between the two variables in the
aggregated crosstabulation.
n In some cases the conclusions based upon an
aggregated crosstabulation can be completely
reversed if we look at the unaggregated data. The
reversal of conclusions based on aggregate and
unaggregated data is called Simpson’s paradox.

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Scatter Diagram and Trendline

n A scatter diagram is a graphical presentation of the

relationship between two quantitative variables.
n One variable is shown on the horizontal axis and
the other variable is shown on the vertical axis.
n The general pattern of the plotted points suggests
the overall relationship between the variables.
n A trendline provides an approximation of the
relationship.

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Scatter Diagram

n A Positive Relationship

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Scatter Diagram

n A Negative Relationship

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Scatter Diagram

n No Apparent Relationship

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Scatter Diagram

n Example: Panthers Football Team

The Panthers football team is interested in
investigating the relationship, if any, between
interceptions made and points scored.
x = Number of y = Number of
Interceptions Points Scored
1 14
3 24
2 18
1 17
3 30
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Scatter Diagram

y
Number of Points Scored 35
30
25
20
15
10
5
0 x
0 1 2 3 4
Number of Interceptions

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Example: Panthers Football Team

n Insights Gained from the Preceding Scatter Diagram

• The scatter diagram indicates a positive relationship
between the number of interceptions and the
number of points scored.
• Higher points scored are associated with a higher
number of interceptions.
• The relationship is not perfect; all plotted points in
the scatter diagram are not on a straight line.

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Scatter Diagram and Trendline

Scatter Diagram for the Panthers

35
30
Points Scored.

25
Number of

20
15
10
5
0
0 1 2 3 4
Number of Interceptions

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Tabular and Graphical Methods

Data
Categorical Data Quantitative Data

Tabular Graphical Tabular Graphical

Methods Methods Methods Methods

• Frequency • Bar Chart • Frequency • Dot Plot

Distribution • Pie Chart Distribution • Histogram
• Rel. Freq. Dist. • Rel. Freq. Dist. • Ogive
• Percent Freq. • % Freq. Dist. • Stem-and-
Distribution • Cum. Freq. Dist. Leaf Display
• Crosstabulation • Cum. Rel. Freq. • Scatter
Distribution Diagram
• Cum. % Freq.
Distribution
• Crosstabulation
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End of Chapter 2, Part B

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
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