Excel for Statistics Thomas J Quirk Excel 2013 for Business Statistics A Guide to Solving Practical Problems Excel for Statistics Excel for Statistics is a series of textbooks that explain how to use Excel to solve statistics problems in various fields of study Professors, students, and practitioners will find these books teach how to make Excel work best in their respective field Applications include any discipline that uses data and can benefit from the power and simplicity of Excel Books cover all the steps for running statistical analyses in Excel 2013, Excel 2010 and Excel 2007 The approach also teaches critical statistics skills, making the books particularly applicable for statistics courses taught outside of mathematics or statistics departments Series editor: Thomas J Quirk More information about this series at http://www.springer.com/series/13491 Thomas J Quirk Excel 2013 for Business Statistics A Guide to Solving Practical Problems Thomas J Quirk Webster University St Louis, MO, USA ISBN 978-3-319-11981-6 ISBN 978-3-319-11982-3 (eBook) DOI 10.1007/978-3-319-11982-3 Springer Cham Heidelberg New York Dordrecht London Library of Congress Control Number: 2014952587 © Springer International Publishing Switzerland 2015 This work is subject to copyright All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher’s location, in its current version, and permission for use must always be obtained from Springer Permissions for use may be obtained through RightsLink at the Copyright Clearance Center Violations are liable to prosecution under the respective Copyright Law The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made The publisher makes no warranty, express or implied, with respect to the material contained herein Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com) This book is dedicated to the more than 3,000 students I have taught at Webster University’s campuses in St Louis, London, and Vienna; the students at Principia College in Elsah, Illinois; and the students at the Cooperative State University of Baden-Wuerttemberg in Heidenheim, Germany These students taught me a great deal about the art of teaching I salute them all, and I thank them for helping me to become a better teacher Thomas J Quirk Preface Excel 2013 for Business Statistics: A Guide to Solving Practical Problems is intended for anyone looking to learn the basics of applying Excel’s powerful statistical tools to their business courses or work activities If understanding statistics isn’t your strongest suit, you are not especially mathematically-inclined, or if you are wary of computers, then this is the right book for you Here you’ll learn how to use key statistical tests using Excel without being overpowered by the underlying statistical theory This book clearly and methodically shows and explains how to create and use these statistical tests to solve practical problems in business Excel is an easily available computer program for students, instructors, and managers It is also an effective teaching and learning tool for quantitative analyses in business courses The powerful numerical computational ability and the graphical functions available in Excel make learning statistics much easier than in years past However, this is the first book to show Excel’s capabilities to more effectively teach business statistics; it also focuses exclusively on this topic in an effort to render the subject matter not only applicable and practical, but also easy to comprehend and apply Unique features of this book: • You will be told each step of the way, not only how to use Excel, but also why you are doing each step so that you can understand what you are doing, and not merely learn how to use statistical tests by rote • Includes specific objectives embedded in the text for each concept, so you can know the purpose of the Excel steps • Includes 167 color screen shots so that you can be sure you are performing the Excel steps correctly • This book is a tool that can be used either by itself or along with any good statistics book • Practical examples and problems are taken from business vii viii Preface • Statistical theory and formulas are explained in clear language without bogging you down in mathematical fine points • You will learn both how to write statistical formulas using Excel and how to use Excel’s drop-down menus that will create the formulas for you • This book does not come with a CD of Excel files which you can upload to your computer Instead, you’ll be shown how to create each Excel file yourself In a work situation, your colleagues will not give you an Excel file; you will be expected to create your own This book will give you ample practice in developing this important skill • Each chapter presents the steps needed to solve a practical business problem using Excel In addition, there are three practice problems at the end of each chapter so you can test your new knowledge of statistics The answers to these problems appear in Appendix A • A “Practice Test” is given in Appendix B to test your knowledge at the end of the book The answers to these practical business problems appear in Appendix C This book is appropriate for use in any course in business statistics (at both undergraduate and graduate levels) as well as for managers who want to improve the usefulness of their Excel skills Prof Tom Quirk, a current Professor of Marketing at the George Herbert Walker School of Business & Technology at Webster University in St Louis, Missouri (USA), teaches Marketing Statistics, Marketing Research, and Pricing Strategies At the beginning of his academic career, Prof Quirk spent six years in educational research at The American Institutes for Research and Educational Testing Service He has published articles in The Journal of Educational Psychology, Journal of Educational Research, Review of Educational Research, Journal of Educational Measurement, Educational Technology, The Elementary School Journal, Journal of Secondary Education, Educational Horizons, and Phi Delta Kappan In addition, Professor Quirk has written more than 60 textbook supplements in Management and Marketing, published more than 20 articles in professional journals, and presented more than 20 papers at professional meetings, including annual meetings of The American Educational Research Association, The American Psychological Association, and the National Council on Measurement in Education He holds a B.S in Mathematics from John Carroll University, both an M.A in Education and a Ph.D in Educational Psychology from Stanford University, and an M.B.A from the University of Missouri-St Louis St Louis, MO, USA Thomas J Quirk Acknowledgements Excel 2013 for Business Statistics: A Guide to Solving Practical Problems is the result of inspiration from three important people: my two daughters and my wife Jennifer Quirk McLaughlin invited me to visit her MBA classes several times at the University of Witwatersrand in Johannesburg, South Africa These visits to a firstrate MBA program convinced me there was a need for a book to teach students how to solve practical problems using Excel Meghan Quirk-Horton’s dogged dedication to learning the many statistical techniques needed to complete her PhD dissertation illustrated the need for a statistics book that would make this daunting task more user-friendly And Lynne Buckley-Quirk was the number-one cheerleader for this project from the beginning, always encouraging me and helping me remain dedicated to completing it Marc Strauss, our editor at Springer, caught the spirit of this idea in our first phone conversation and shepherded this book through the idea stages until it reached its final form His encouragement and support were vital to this book seeing the light of day We thank him for being such an outstanding product champion throughout this process And Hannah Bracken at Springer did her usual first-rate job in coordinating the editing and production of this book; she is always a pleasure to work with Thomas J Quirk ix 246 Practice Test Answer: Chapter (see Fig C.3) Fig C.3 Practice Test Answer to Chapter Problem Appendix C: Answers to Practice Test Appendix C: Answers to Practice Test Practice Test Answer: Chapter (see Fig C.4) Fig C.4 Practice Test Answer to Chapter Problem 247 248 Practice Test Answer: Chapter (see Fig C.5) Fig C.5 Practice Test Answer to Chapter Problem Appendix C: Answers to Practice Test Appendix C: Answers to Practice Test Practice Test Answer: Chapter (see Fig C.6) Fig C.6 Practice Test Answer to Chapter Problem 249 250 Appendix C: Answers to Practice Test Practice Test Answer: Chapter 6: (continued) r ¼ À.64 (note the negative correlation!) y-intercept ¼ a ¼ 17.553 slope ¼ b ¼ À 0.007 (note the negative slope which tells you the correlation is negative!) Y ¼ a + b X Y ¼ 17.553 À 0.007 X Y ¼ 17.553 À 0.007 (1500) Y ¼ 17.553 À 10.5 Y ¼ 7.1 kg weight loss Appendix C: Answers to Practice Test Practice Test Answer: Chapter (see Fig C.7) Fig C.7 Practice Test Answer to Chapter Problem 251 252 Appendix C: Answers to Practice Test Practice Test Answer: Chapter (continued) 10 11 Multiple correlation ¼ 84 a ¼ y-intercept ¼ 0.8482 b1 ¼ 0.1916 b2 ¼ 0.7922 Y ¼ a + b1 X1 + b2 X2 Y ¼ 0.8482 + 0.1916 X1 + 0.7922 X2 Y ¼ 0.8482 + 0.1916 (10) + 0.7922 (3) Y ¼ 0.8482 + 1.916 + 2.377 Y¼5 + 0.74 + 0.72 + 0.52 The better predictor of PERFORMANCE RATING was EXPERIENCE ( r ¼ 74) The two predictors combined predicted PERFORMANCE RATING much better at Rxy ¼ 84 Appendix C: Answers to Practice Test Practice Test Answer: Chapter (see Fig C.8) Fig C.8 Practice Test Answer to Chapter Problem 253 254 Appendix C: Answers to Practice Test Practice Test Answer: Chapter (continued) f g h i j k l m n o p MSb ¼ 1143.18 and MS w ¼ 15.58 F ¼ 73.40 Mean Group B ¼ 23.10, and Mean Group D ¼ 38.50 critical F ¼ 2.84 Results: Since 73.40 is greater than the critical F of 2.84 , we reject the null hypothesis and accept the research hypothesis Conclusion: There was a significant difference in the amount of food eaten by the kittens in the four flavors of kitten food Null hypothesis: μ B ¼ μ D Research hypothesis: μ B 6¼ μ D df ¼ n TOTAL À k ¼ 44 À ¼ 40 critical t ¼ 1.96 Result: Since the absolute value of À 9.11 is greater than the critical t of 1.96, we reject the null hypothesis and accept the research hypothesis Conclusion: The kittens ate significantly more of Flavor D than Flavor B (38.50 vs 23.10) Appendix D: Statistical Formulas X X Mean X¼ Standard Deviation STDEV ¼ S ¼ Standard error of the mean s.e ¼ SX ¼ pSffiffin Confidence interval about the mean X Æ t SX n rffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi X ðXÀXÞ nÀ1 where SX ¼ pSffiffin t ¼ XÀμ S One-group t-test X where SX ¼ pSffiffin Two-group t-test (a) when both groups have a sample size greater than 30 t¼ X1 À X2 SX1 ÀX2 where SX1 ÀX2 sffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi S1 S2 ẳ ỵ n1 n2 and where df ẳ n1 + n2 À © Springer International Publishing Switzerland 2015 T.J Quirk, Excel 2013 for Business Statistics, Excel for Statistics, DOI 10.1007/978-3-319-11982-3 255 256 Appendix D: Statistical Formulas (b) when one or both groups have a sample size less than 30 t¼ where SX1 À X2 X1 À X2 SX1 X2 s n1 1ịS1 ỵ n2 1ịS2 1 ẳ ỵ n1 n2 n1 þ n2 À and where df ¼ n1 + n2 Correlation rẳ n1 X XXịYY ị Sx Sy where Sx ¼ standard deviation of X and where Sy ¼ standard deviation of Y Simple linear regression Y¼a+bX where a ¼ y-intercept and b ¼ slope of the line Multiple regression equation Y ¼ a + b1 X1 + b2 X2 + b3 X3 + etc where a ¼ y-intercept One-way ANOVA F-test ANOVA t-test F ¼ MSb / MSw X À X2 s:e:ANOVA rffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi where s:e:ANOVA ẳ MSw n11 ỵ n12 ANOVA t ¼ and where df ¼ nTOTAL À k where nTOTAL ¼ n + n + n + etc and where k ¼ the number of groups Appendix E: t-Table Critical t-values needed for rejection of the null hypothesis (see Fig E.1) © Springer International Publishing Switzerland 2015 T.J Quirk, Excel 2013 for Business Statistics, Excel for Statistics, DOI 10.1007/978-3-319-11982-3 257 258 Fig E.1 Critical t-values Needed for Rejection of the Null Hypothesis Appendix E: t-Table Index A Absolute value of a number, 70–73 Analysis of Variance ANOVA t-test formula (8.2), 182 degrees of freedom, 182–183, 187–190, 192 Excel commands, 183–186 formula (8.1), 179 interpreting the summary table, 179 s.e formula for ANOVA t-test (8.3), 182 ANOVA t-test See Analysis of Variance Average function See Mean C Centering information within cells, 6–8 Chart adding the regression equation, 148–150 changing the width and height, 5–6 creating a chart, 127–137 drawing the regression line onto the chart, 127–137 moving the chart, 135–136 printing the spreadsheet, 14–16, 137–139, 151 reducing the scale, 138 scatter chart, 129 titles, 130 Column width (changing), 5, 6, 25, 144, 161 Confidence interval about the mean 95% confident, 40, 42, 43, 48 drawing a picture, 47 formula (3.2), 43 lower limit, 40–45, 47–49, 55, 65, 67 upper limit, 40–45, 47–49, 55, 65, 67 Correlation formula (6.1), 120 negative correlation, 115, 117, 118, 146, 151, 212, 250 positive correlation, 115–117, 122, 126, 151, 168 steps for computing, 120–122 CORREL function See Correlation COUNT function, 9, 55 Critical t-value, 61, 183, 257, 258 D Data Analysis ToolPak, 140–142, 175 Data/Sort commands, 29 Degrees of freedom, 90–96, 105, 182–183, 187, 188, 190, 192, 222, 223, 225, 227, 241 F Fill/Series/Columns commands, 4–5 step value/stop value commands, 5, 24 Formatting numbers currency format, 16–17, 19, 62, 63, 66, 67 decimal format, 144, 178 H Home/Fill/Series commands, Hypothesis testing decision rule, 55 null hypothesis, 51–62, 65, 67 rating scale hypotheses, 52–54, 58 research hypothesis, 51–55, 57–60, 62, 65, 67 © Springer International Publishing Switzerland 2015 T.J Quirk, Excel 2013 for Business Statistics, Excel for Statistics, DOI 10.1007/978-3-319-11982-3 259 260 Hypothesis testing (cont.) stating the conclusion, 57, 59, 60 stating the result, 60 steps for hypothesis testing, 69–73 M Mean, 1–21, 39–67, 69–85, 87–120, 122–128, 146, 165, 166, 168, 175, 179–183, 186–188, 190, 192, 230, 233, 234, 237, 241, 253, 255 formula (1.1), Multiple correlation correlation matrix, 166–168, 170, 172, 173, 239, 240 Excel commands, 31 Multiple regression correlation matrix, 166–168, 170, 172, 173 equation (7.1), (7.2), 159 Excel commands, 162, 170, 171, 173, 238 predicting Y, 159 N Naming a range of cells, 8–9 Null hypothesis See Hypothesis testing O One-group t-test for the mean absolute value of a number, 70–73, 77 formula (4.1), 69 hypothesis testing, 69–73 s.e formula (4.2), 69 steps for hypothesis testing, 69–73 P Page Layout/Scale to Fit commands, 33 Population mean, 39–40, 42, 51, 52, 69, 71, 89, 96, 175, 180–183, 186 Printing a spreadsheet entire worksheet, 151–153 part of the worksheet, 151–153 printing a worksheet to fit onto one page, 137–139 R RAND() See Random number generator Random number generator duplicate frame numbers, 26, 28, 37, 38, 230, 231 Index frame numbers, 23–32, 37, 38, 230, 231 sorting duplicate frame numbers, 28–31, 37, 38, 231 Regression, 143, 146, 153–157, 162–164, 170, 172, 173, 238, 239 Regression equation adding it to the chart, 148–150, 156 formula (6.3), 148 negative correlation, 115, 117, 118, 146, 151 predicting Y from x, 159 slope, b, 146 writing the regression equation using the summary output, 142–146, 153, 165 y-intercept, a, 146 Regression line, 127–137, 146–150, 154, 156, 157, 238 Research hypothesis See Hypothesis testing S Sample size, 1–21, 41, 43–45, 47, 48, 50, 55, 62, 65, 66, 69, 72, 74, 81, 82, 85, 87–92, 95, 97–99, 103, 105, 113, 119, 120, 124, 125, 178, 182, 183, 230, 233, 234, 255, 256 COUNT function, Saving a spreadsheet, 13–14 Scale to Fit commands, 33, 48 s.e See Standard error of the mean Standard deviation, 1–21, 40, 41, 45, 48, 55, 65, 66, 69, 71, 74, 81–83, 85, 89, 92, 93, 97, 99, 103, 111, 113, 124, 230, 233, 234, 255, 256 formula (1.2), Standard error of the mean, 1–21, 40–42, 44, 45, 48, 55, 62, 65, 66, 69, 71, 75, 81, 82, 85, 96, 97, 230, 233, 234, 255 formula (1.3), STDEV See Standard deviation T t-table See Appendix E Two-group t-test basic table, 89 degrees of freedom, 90–96, 105 drawing a picture of the means, 94 Formula #1 (5.3), 96–103 Formula #2 (5.5), 103–110 formula (5.2), 96 hypothesis testing, 87–95, 104 s.e formula (5.3), (5.5), 96, 105 steps in hypothesis testing, 88–95 ... tests to solve practical problems in business Excel is an easily available computer program for students, instructors, and managers It is also an effective teaching and learning tool for quantitative... running statistical analyses in Excel 2013, Excel 2010 and Excel 2007 The approach also teaches critical statistics skills, making the books particularly applicable for statistics courses taught... The answers to these practical business problems appear in Appendix C This book is appropriate for use in any course in business statistics (at both undergraduate and graduate levels) as well as