Statistics and Data Analysis in Economics
Homework 2

Week of 1/26/98

Reading Assignment:

Introductory Statistics for Business and Economics (ISBE)
Chapter 2

Suggested Problems (NOT to be handed in):

1) ISBE 2.6, 2.10-2.12, 2.19, 2.23, 2.29

2) The R&D expenditures (as a fraction of total sales) for the 12 largest auto manufacturers, in a recent year, were 4.4, 3.6, 4.4, 3.7, 9.6, 3.9, 3.6, 3.5, 3.0, 4.5, 3.9, and 2.2.
a) Create a stem and leaf plot of R&D expenditures. Comment on the shape of the distribution.
b) Use your stem and leaf plot as an aid in calculating a five number summary of the data. What is the IQR of the data.
c) Calculate the mean and standard deviation of the data.
d) Remove the observation 9.6 (Daimler-Benz, an outlier) from the dataset. Now recalculate the mean and standard deviation.
e) With 9.6 removed from the dataset, refigure the 5 number summary and IQR.
f) Robust statistics are statistics less influenced by exteme data points ("outliers"). Which measures of location and dispersion are more robust, the moments (mean and standard deviation) or percentile-based measures (median and IQR)?


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last updated 14 January 1998