The 21st-century learner is different from the college student we typically saw 10 or 15 years ago. As recently as a decade ago our students asked us, “ How do I use statistics?” Today we more often hear, “ Why should I use statistics?” John Seely Brown, formerly the chief scientist at Xerox Corporation and currently lecturing on topics such as creating a culture of learning and learning in the digital age, says that “our generation focused on information, but these kids focus on meaning—how does information take on meaning?” In Applied Statistics in Business and Economics we provide meaning by using real business situations and real data, and by appealing to the student’s need to know why rather than just how.

Applied Statistics in Business and Economics was written to meet four objectives that we felt were not being met by many of the textbooks currently available.

 Objective 1: Communicate the Importance of Variation in a Business Context

Statistics helps us know which events are unusual and which are not. For example, Mini Case 3.1 studies the length of recessions that the United States has experienced over the last century and a half. Our purpose is to place in context the most recent recession, 2001, which most of our students experienced on some level, in order to illustrate how it is similar to and different from other recessions.

 Objective 2: Use Real Data and Real Business Applications

Examples, case studies, and problems are taken from published research or real applications whenever possible. Hypothetical data are used when it seems the best way to illustrate a concept. You can usually tell the difference by examining the footnotes citing the source. The Student CD contains clearly labeled data sets for all examples and exercises, and LearningStats offers many additional real data sets, case studies, applications, and presentations for self-instruction or classroom display.

Objective 3: Incorporate Current Statistical Practices and Offer Practical Advice

With the increased reliance on computers, statistics practitioners rely less on approximations and more on exact distributions. This reality is emphasized in Chapter 7 in our discussion of continuous distributions. We have included a section on the triangular distribution, used frequently in what-if business analysis. Chapters 1 and 2 offer advice on writing technical reports and collecting data (tasks that every business student will be required to perform). Chapter 3 gives in-depth advice on effective visual presentations and their key role in the business world. Chapter 14 covers the most common tasks in handling time-series data, which many experts agree is underrepresented in many business statistics classes.

Objective 4: Provide More In-Depth Explanation of the Why and Let the Software Take Care of the How

We feel it is critical that students understand the importance of communicating with data, in writing, and visually. Today’s computer capabilities make it easier to summarize and display data than ever before. We rely on easily mastered software techniques using the common software available. For example, Chapter 9 emphasizes the logic behind hypothesis testing and explains Type I and Type II error in detail. Our purpose for this is to drive home the idea that there are risks in decision making and those risks should be quantified and directly considered both in the design of the test and in the business action resulting from the test. In Chapters 9 and 10, we explain the reasoning behind tests of means and proportions, their limitations, and the rules for deciding when they are justified.

Our experience tells us that today’s students want to be given credit for the experience they bring to the college classroom. We have tried to honor this by choosing examples and exercises that will draw on the students’ knowledge of the world around them and by addressing them as mature learners. Emphasis is on thinking about data, choosing appropriate analytic tools, using computers effectively, and recognizing limitations of statistics. We also bring attention to newer methods of analysis and also make special effort to incorporate current trends by including applications in health care administration, economics, and entrepreneurship.

What’s new in the second edition?

In this second edition we have listened to you and have made many changes that you asked for. We sought advice from students and faculty who are currently using the textbook, objective reviewers at a variety of colleges and universities, and participants in focus groups on teaching statistics with technology. There are many improvements in this second edition, some of which are highlighted below:

• Better non-technical motivation of chapter topics.

• Improved transitions between concepts within chapters.

• More and updated mini cases on topics that will interest students.

• Revisions to graphic illustrations and tables in order to provide a better “picture” of the concept for students.

• More large data, real sets for student assignment projects, included on Student CD.

• New exercises and examples using real data from Noodles & Company, a rapidly growing casual dining chain whose success is based on a customer-driven business model and decision making using statistical analysis.

• Updated examples and updated data sets used in exercises.

• Enlarged and improved test bank for instructors.

• Compatibility with Excel 2007 as well as Excel 2003.

• Section exercises for review before exams, with complete solutions (Appendix H).

Software

Excel is used throughout this book, because it is commonly available. We often illustrate calculations using MegaStat, whose Excel-based menus and spreadsheet format offer more capability than Excel’s Data Analysis Tools. MINITAB menus and examples are also included to point out similarities and differences of these tools. To assist the teacher who doesn’t want to “teach” Excel or MINITAB (or the student who needs extra help or “catch up” work) the Student CD contains tutorials or demonstrations on using Excel, MINITAB, or MegaStat for the tasks of each chapter. At the end of each chapter is a list of LearningStats and Visual Statistics demonstrations and case studies that illustrate concepts from the chapter. For example,

Chapter 4 (Descriptive Statistics) is supported by PowerPoint presentations and Excel spreadsheets that explain how to calculate common statistics, show how sampling methods work, and apply them to real data. Students can install MegaStat, LearningStats, and Visual Statistics on their own computers from the CD. The rich array of supporting software is a distinguishing feature of this textbook.

Math Level

The assumed level of mathematics is pre-calculus, though there are rare references to calculus where it might help the better-trained reader. All but the simplest proofs and derivations are omitted, though key assumptions are stated clearly. The learner is advised what to do when these assumptions are not fulfilled. Worked examples are included for basic calculations, but the textbook does assume that computers will do all calculations after the statistics class is over. Thus, interpretation is paramount. End-of-chapter references and suggested Web sites are given so that interested readers can deepen their understanding.

Exercises

Simple practice exercises are placed within each section. End-of-chapter exercises tend to be more integrative or to be embedded in more realistic contexts. The end-of-chapter exercises encourage the learner to try alternative approaches and discuss ambiguities or underlying issues when the statistical tools do not quite “fit” the situation. Many exercises invite mini-essays (at least a sentence or two) rather than just quoting a formula. Answers to odd-numbered exercises are in the back of the book (all answers are in the instructor’s manual).

LearningStats

LearningStats is intended to let students explore data and concepts at their own pace, ignoring material they already know and focusing on things that interest them. LearningStats includes explanations on topics that are not covered in other software packages, such as writing effective reports, how to perform calculations, how to make effective charts, or how the bootstrap method works. It also includes some topics that did not appear prominently in the textbook (e.g., stem-and-leaf plots, finite population correction factor, bootstrap simulation techniques).

Instructors can use LearningStats PowerPoint presentations in the classroom, but students can also use them for self-instruction. No instructor can “cover everything,” but students can be encouraged to explore LearningStats data sets and/or demonstrations perhaps with an instructor’s guidance, or even as an assigned project.