Stat 310

Midterm Paper
Ray Alvin V. Cantos
Amal Almira B. Lucman
Isabel P. Plaza
Melissa Dewi C. Tavera

March 4, 2009

Table of Contents

Page
Confidence Interval for Population Mean

Confidence Interval for Population Proportion

One-Sample t Test of Hypothesis for Mean

One-Sample z Test of Hypothesis for Mean

Two-Sample Test of Hypothesis for Mean Dependent Samples

11

Two-Sample Test of Hypothesis for Mean Independent Samples

13

Two-Sample Test of Hypothesis for Proportion

16

Confidence Interval for Population Mean

OIL PRICES
After oil prices peaked last July 2008 at $147 a barrel, prices have continuously declined to its
current level of around $40. Suppose we want to estimate the mean world oil price from 1998
to 2008 by constructing a 95% confidence interval. A random sample of 50 spot prices of crude
oil is selected.
Weekly All Countries Spot Price FOB Weighted by Estimated Export Volume
(Dollars per Barrel)

01/17/06
04/13/00
03/13/07
11/28/00
04/17/03
03/09/03
12/14/08
07/07/98
07/15/06
02/08/99

56.75
23.39
58.04
30.68
23.31
31.71
38.73
10.82
68.47
10.04

10/19/98
02/22/08
12/17/01
09/17/03
06/27/03
08/02/99
06/17/08
09/12/98
10/13/05
12/04/98

12.01
93.51
16.70
25.60
25.51
18.75
129.70
11.78
55.99
9.48

06/23/06
05/18/08
05/30/99
11/02/00
03/06/06
07/06/98
05/16/03
08/19/03
01/15/01
09/21/01

62.26
119.91
14.59
30.46
55.98
10.82
24.07
28.32
23.18
24.73

02/16/07
10/30/08
11/18/06
07/09/00
02/24/05
08/15/98
02/07/05
09/26/03
02/05/04
06/11/02

Source: Energy Information Administration

Summary of Sample Statistics

50
36.8916
26.327
1.96

s
z

Number of observations
Mean
Standard deviation
Critical values for two-sided 95% level of confidence

Computation

36.89 1.96

26.33

36.89 7.30
(. , . )

50

53.65
64.48
54.34
28.70
42.05
11.02
41.54
24.65
28.74
22.31

09/03/05
06/18/07
05/25/00
07/07/03
07/24/04
01/24/01
07/26/03
07/27/02
09/24/03
07/24/98

60.75
66.18
27.37
26.52
35.90
23.73
26.91
24.50
24.65
11.30

Confidence Interval for Population Mean

Using INSTAT

Conclusion
The mean world oil price in the 11-year span from 1998 to 2008 is between $29 and $44.

Confidence Interval for Population Proportion

INFLATION RATES
The Bangko Sentral ng Pilipinas started releasing annual target inflation rates in 2002. With the
actual monthly inflation rates released by the National Statistics Office, we can determine a
confidence interval for the proportion of the number of times the Central Bank has
maintained inflation within their target. The following is a random sample of 50 months
inflation rates.

Month

Annual
Target
Lower
Limit

Annual
Actual
Target
Within
Inflation
Upper
Target?
Rates
Limit

Month

2003M02
4.5
5.5
3.2
no 2004M09
2004M10
4.0
5.0
7.7
no 2002M12
2007M12
4.0
5.0
3.9
no 2007M03
2003M05
4.5
5.5
3.4
no 2005M09
2002M09
4.5
5.5
2.7
no 2007M02
2003M03
4.5
5.5
3.0
no 2005M04
2005M12
5.0
6.0
6.7
no 2004M03
2006M08
4.0
5.0
6.3
no 2005M01
2007M08
4.0
5.0
2.4
no 2006M02
2004M08
4.0
5.0
6.8
no 2007M11
2008M08
3.0
5.0
12.4
no 2006M01
2003M04
4.5
5.5
3.3
no 2008M06
2005M03
5.0
6.0
8.5
no 2004M06
2006M11
4.0
5.0
4.6
yes 2003M06
2003M10
4.5
5.5
3.6
no 2003M12
2008M04
3.0
5.0
8.3
no 2008M01
2006M10
4.0
5.0
5.4
no 2006M05
2004M04
4.0
5.0
4.3
yes 2004M05
2006M04
4.0
5.0
7.1
no 2005M10
2002M04
4.5
5.5
3.5
no 2002M10
2005M11
5.0
6.0
7.1
no 2007M01
2008M12
3.0
5.0
8.0
no 2007M10
2005M07
5.0
6.0
7.1
no 2004M12
2008M11
3.0
5.0
9.9
no 2008M03
2003M01
4.5
5.5
2.8
no 2002M01
Sources: Bangko Sentral ng Pilipinas, National Statistics Office

Annual
Target
Lower
Limit
4.0
4.5
4.0
5.0
4.0
5.0
4.0
5.0
4.0
4.0
4.0
3.0
4.0
4.5
4.5
3.0
4.0
4.0
5.0
4.5
4.0
4.0
4.0
3.0
4.5

Summary of Sample Statistics

50
0.10
1.96

n
p
z

Number of observations
Sample proportion
Critical values for two-sided 95% level of confidence

Annual
Actual
Target
Within
Inflation
Upper
Target?
Rates
Limit
5.0
5.5
5.0
6.0
5.0
6.0
5.0
6.0
5.0
5.0
5.0
5.0
5.0
5.5
5.5
5.0
5.0
5.0
6.0
5.5
5.0
5.0
5.0
5.0
5.5

7.2
2.5
2.2
7.0
2.6
8.5
4.2
8.4
7.6
3.2
6.7
11.4
5.4
3.9
3.9
4.9
6.9
4.5
7.0
2.6
3.9
2.7
8.6
6.4
3.7

no
no
no
no
no
no
yes
no
no
no
no
no
no
no
no
yes
no
yes
no
no
no
no
no
no
no

Confidence Interval for Population Proportion

Computation

( )

0.10 1.96

0.10 (10.10)
50

0.10 0.08
(. , . )

Using INSTAT

Conclusion
Since the Bangko Sentral ng Pilipinas started inflation targeting in 2002 to promote price stability, it has
achieved its target between 2% and 18% of the time.

One-Sample t Test of Hypothesis for Mean

PORK PRICES
The Christmas season is known to induce consumer spending especially for food thereby
pushing prices up. To know whether pork prices in Luzon and Visayas follow this trend, we
estimate the mean prices for December 2008 and compare to the November 2008 mean of
P160.22. Below is a sample of 15 average prices from select provinces.
Retail Prices of Pork Lean Meat, December 2008
(Pesos per kilo)

Camarines Sur
Eastern Samar
Quirino
Abra
Pangasinan

184.00
150.00
160.00
169.56
155.67

Northern Samar
Siquijor
Batangas
Mindoro Occidental
Mindoro Oriental

147.00
142.50
165.33
171.14
178.00

Zambales
Marinduque
Isabela
Aklan
Biliran

Source: Bureau of Agricultural Statistics

Let X = average price of pork lean meat in a province in Luzon or Visayas

H0: = 160.22
H1: > 160.22

Summary of Sample Statistics

15
163.11
12.95
1.76

s
t

Number of observations
Mean
Standard Deviation
Critical value for one-sided 95% level of confidence

Decision Rule
If > 1.76, then reject H0.

179.71
162.86
166.73
144.92
169.29

One-Sample t Test of Hypothesis for Mean

Computation

163.11 160.22

12.95
15

= .
Using INSTAT

Conclusion
We do not reject H0 since [t=0.87] < 1.76. On the average, prices of pork lean meat in 2008 did not
increase during the Christmas season.

One-Sample z Test of Hypothesis for Mean

CORRUPTION INDEX
Transparency International annually publishes its Corruption Perception Index which ranks
countries in terms of the degree to which corruption is perceived to exist among public officials
and politicians1. Each country is rated from 1 (highly corrupt) to 10 (highly clean). In 1998, the
mean score for all countries is 4.89. For 2008, we selected a random sample of 50 country
scores to estimate the mean score and determine if corruption perception has changed.

Rank

Country

126
96
147
54
96
102
47
178
109
58
115
47
58
109
7
92
27

Uganda
Guatemala
Russia
South Africa
Gabon
Tanzania
Jordan
Iraq
Moldova
Turkey
Malawi
Cape Verde
Lithuania
Vanuatu
Iceland
Algeria
Estonia

CPI
Score
2.6
3.1
2.1
4.9
3.1
3.0
5.1
1.3
2.9
4.6
2.8
5.1
4.6
2.9
8.9
3.2
6.6

Rank
138
9
45
70
41
85
85
134
102
178
85
40
4
80
121
102
173

Country
Tonga
Australia
Czech Republic
Colombia
Mauritius
Panama
Serbia
Ukraine
Bolivia
Myanmar
Albania
South Korea
Singapore
Morocco
Viet Nam
Mongolia
Guinea

CPI
Score
2.4
8.7
5.2
3.8
5.5
3.4
3.4
2.5
3.0
1.3
3.4
5.6
9.2
3.5
2.7
3.0
1.6

Rank
23
36
14
85
9
147
141
126
80
121
96
47
1
151
109
47

Country
France
Malta
Norway
India
Canada
Kenya
Philippines
Indonesia
Burkina Faso
Nigeria
Benin
Hungary
Sweden
Ecuador
Belize
Malaysia

Source: Transparency International (CPI 2008)

Let X = CPI score of a country for 2008

H0: = 4.89
H1: 4.89

Summary of Sample Statistics

50
4.17
2.16
1.96

s
z

Number of observations
Mean
Standard Deviation
Critical values for two-sided 95% level of confidence

Transparency International Corruption Perceptions Index 2006, Frequently Asked Questions

CPI
Score
6.9
5.8
7.9
3.4
8.7
2.1
2.3
2.6
3.5
2.7
3.1
5.1
9.3
2.0
2.9
5.1

One-Sample z Test of Hypothesis for Mean

Decision Rule
If < 1.96 or > 1.96, then reject H0 and accept H1.

Computation

4.17 4.89

2.16
50

= .
Using INSTAT

Conclusion
We reject H0 since [z=-2.37] < -1.96. Since z < 0, the mean perception index has decreased. Thus, the
worlds public officials are perceived to be more corrupt in 2008 than 10 years before.

10

Two-Sample Test of Hypothesis for Mean - Dependent

11

PRETEST AND POSTTEST

All students of Miriam College High School undergo pretest at the beginning and posttest at the
end of each school year. Results are used as one of the indicators of how effective the teachers
lessons are. Consider that a subject coordinator wanted to know if a certain first year teachers
class improved in Math by using the pretest and posttest scores. Random samples of 15 out of
39 students Math scores in both pretest and posttest were selected.
Student
Number
15
18
7
6
30
32
28
38
37
13
34
8
35
11
25

Posttest
Score
36
29
31
30
20
31
37
40
36
37
45
28
34
30
30

Pretest
Score
30
18
29
17
19
32
28
29
26
37
42
30
17
25
10

Difference
6
11
2
13
1
-1
9
11
10
0
3
-2
17
5
20

Source: Miriam College High School

Let Xd = Difference between the posttest and pretest scores of a student

H0: = 0
H1: > 0
Summary of Sample Statistics
15
7.00
6.69
1.76

Number of observations
Mean
Standard Deviation
Critical values for two-sided 95% level of confidence

Two-Sample Test of Hypothesis for Mean - Dependent

12

Decision Rule
If > 1.76, then reject H0 and accept H1.

Computation

.
.

= .
Using INSTAT

Conclusion
We reject H0 since [t=4.05] > 1.76. Since t > 0, we accept H1. The teachers math students have higher
scores in the posttest which could indicate that the lessons were effective.

Two-Sample Test of Hypothesis for Mean - Independent

13

LOTTO JACKPOT
The price for a bet in the Superlotto 6/49 was raised from P10 to P20 in January 3, 2008. With
the 100% increase in price, the minimum jackpot prize also increased by 100% from P8 million
to P16 million. Using random samples of 50 jackpot prizes in pesos, we can assess if the prize
really doubled based on the mean of the jackpot prizes before and after the price increase.

Date
Jan 6, 2008
Jan 3, 2008
Jun 12, 2008
Jan 25, 2009
May 11, 2008
Aug 28, 2008
Jun 1, 2008
Aug 14, 2008
May 1, 2008
Feb 22, 2009
Nov 20, 2008
Aug 10, 2008
Dec 11, 2008
Dec 4, 2008
May 18, 2008
Mar 9, 2008
Jul 3, 2008
Jul 31, 2008
Aug 7, 2008
Nov 13, 2008
Feb 17, 2008
Oct 12, 2008
Jan 27, 2009
Oct 23, 2008
Oct 5, 2008
Nov 16, 2008
Jan 13, 2008
Feb 26, 2009
May 29, 2008
Feb 3, 2009
Jan 17, 2008
Jun 26, 2008
Jun 15, 2008
Jul 6, 2008
Nov 6, 2008
Apr 17, 2008
Sep 14, 2008
Dec 14, 2008
Aug 21, 2008
Mar 30, 2008
Apr 20, 2008
Oct 26, 2008
Sep 25, 2008
Feb 14, 2008
Jan 22, 2009
Apr 24, 2008
Jun 19, 2008
Sep 11, 2008
Jan 20, 2009
Jul 13, 2008

Jackpot AFTER
Price Increase
71,174,466
60,918,286
16,000,000
68,167,066
80,444,851
16,000,000
153,604,361
53,310,942
51,792,962
347,836,903
82,987,463
45,152,579
161,282,045
127,904,022
101,977,510
140,538,208
50,099,540
21,884,792
37,330,754
65,343,604
61,982,809
131,367,622
73,107,662
20,782,206
104,217,761
73,906,384
95,271,844
17,384,551
140,253,552
99,495,868
112,258,476
34,510,648
16,000,000
58,446,407
49,347,040
17,256,348
49,816,361
180,299,930
70,318,433
249,005,120
25,514,104
27,270,083
74,258,888
52,835,814
59,553,004
34,343,496
22,258,271
42,317,287
51,506,478
76,409,860

Date

Jackpot BEFORE
Price Increase

Jackpot
Doubled

Oct 3, 2002
Jun 13, 2002
Apr 7, 2002
Jan 30, 2003
Mar 22, 2007
Oct 24, 2002
Mar 4, 2007
Nov 25, 2004
Feb 3, 2002
Jul 27, 2006
Oct 20, 2002
Feb 17, 2002
Aug 10, 2006
Oct 31, 2002
Jul 1, 2004
Sep 8, 2005
Jun 10, 2007
Aug 14, 2005
Aug 3, 2006
Jun 12, 2003
May 5, 2005
Dec 30, 2007
Dec 29, 2005
Aug 15, 2004
Jun 19, 2003
Dec 14, 2003
Apr 14, 2005
Oct 28, 2004
Jun 28, 2007
Mar 15, 2007
Sep 3, 2006
Nov 20, 2005
Jun 1, 2006
Oct 13, 2005
May 6, 2007
Aug 22, 2002
Oct 14, 2004
Jun 22, 2006
Dec 1, 2002
Aug 1, 2002
Jan 21, 2007
Mar 27, 2003
Nov 13, 2005
Feb 23, 2003
Jul 3, 2003
Feb 29, 2004
Jun 24, 2007
Jul 23, 2006
Jan 13, 2005
Aug 8, 2004

133,204,697
53,229,542
81,257,635
40,073,086
10,684,094
11,220,127
46,007,687
8,000,000
30,132,737
8,000,000
8,000,000
40,418,966
27,792,261
22,994,465
52,095,624
8,000,000
11,699,971
12,273,169
16,460,017
14,622,491
17,093,822
50,468,706
65,103,908
21,063,248
24,650,625
16,968,302
16,992,154
10,600,951
43,826,067
8,000,000
21,868,560
23,466,154
15,841,582
71,428,042
43,963,196
40,600,342
11,274,058
26,663,929
29,187,504
9,762,838
10,820,567
8,000,000
11,585,425
11,013,135
47,466,712
10,491,027
36,635,267
15,733,879
16,938,138
10,298,335

266,409,394
106,459,085
162,515,270
80,146,171
21,368,189
22,440,254
92,015,374
16,000,000
60,265,474
16,000,000
16,000,000
80,837,933
55,584,522
45,988,930
104,191,248
16,000,000
23,399,942
24,546,337
32,920,034
29,244,982
34,187,643
100,937,412
130,207,817
42,126,496
49,301,251
33,936,605
33,984,308
21,201,902
87,652,134
16,000,000
43,737,120
46,932,307
31,683,164
142,856,083
87,926,393
81,200,683
22,548,116
53,327,858
58,375,008
19,525,675
21,641,134
16,000,000
23,170,849
22,026,270
94,933,423
20,982,053
73,270,534
31,467,758
33,876,276
20,596,670

Source: Philippine Charity Sweepstakes Office

Two-Sample Test of Hypothesis for Mean - Independent

Let

X10x2
X20

= Doubled jackpot prize in pesos on a given draw day before the price increase
= Jackpot prize in pesos on a given draw day after the price increase

H0: 20 = 10x2
H1: 20 10x2
Summary of Sample Statistics
50
77,500,933
62,234,781
50
55,358,922
47,598,016
1.96

Number of observations for prizes after price increase

Mean for prizes after price increase
Standard Deviation for prizes after price increase
Number of observations for prizes before price increase
Mean for prizes before price increase
Standard Deviation for prizes before price increase
Critical values for two-sided 95% level of confidence

Decision Rule
If < 1.96 or > 1.96, then reject H0 and accept H1.

Computation

77,500,93355,358,922
62,234,781 2 47,598,016 2
+
50
50

= .

14

Two-Sample Test of Hypothesis for Mean - Independent

15

Using INSTAT

Conclusion
We reject H0 since [z=2.00] > 1.96. And since z > 0, we can conclude that the mean jackpot price more
than doubled after the price increase.

Two-Sample Test of Hypothesis for Proportion

16

GDP GROWTH
Gross Domestic Product (GDP) is one of the three plausible indicators for calculating economic
output suggested by 1993 United Nations System of National Accounts. When a countrys GDP
decreases, its economic growth is negative. Only a few countries experience this decline. Is the
proportion of countries with negative GDP growth from 2000-2005 smaller than in the 90s?
To test, we randomly sampled 50 countries average annual GDP growths.
1990-2000, average annual % growth
Algeria
Lithuania
Trinidad and Tobago
Kenya
Greece
Nigeria
Egypt
Congo
Mauritania
Sweden
Oman
Romania
Macedonia
Yemen
Tunisia
Belarus
Uganda
Finland
Pakistan
Italy
Georgia
Central African Republic
Thailand
Afghanistan
Malaysia
Senegal
Bolivia
Benin
Cte dIvoire
Congo, Republic
Costa Rica
Slovak Republic
Niger
Haiti
Source: World Bank

1.9
-2.7
3.1
2.2
2.2
2.5
4.4
-4.9
2.9
2.1
4.5
-0.6
-0.8
6.0
4.7
-1.7
7.1

United Arab Emirates

4.8 Jamaica
Guinea-Bissau
1.2 Austria
Chile
6.6 United States
Norway
4.0 Bulgaria
Turkey
3.8 Sudan
Kuwait
4.9 Japan
Georgia
-7.1 Malawi
Belgium
2.1 Vietnam
Uruguay
3.4 Syrian Arab Republic
Lebanon
6.0 China
Moldova
-9.6 Senegal
Kazakhstan
-4.1 France
Turkmenistan
-4.8 Nepal
Poland
4.7 Armenia
Bangladesh
4.8 Ethiopia
Brazil
2.9 Pakistan
Ecuador
1.9 Jamaica
2000-2005, average annual % growth
2.4 United Kingdom
2.4 Burkina Faso
4.8 Tanzania
6.9 United Arab Emirates
0.6 Gabon
1.7 Papua New Guinea
7.4 Sweden
2.3 Dominican Republic
-1.4 Iran
5.8 Nigeria
5.4 Oman
3.0 Israel
12.0 Poland
3.2 Sri Lanka
4.8 Congo
4.4 Bulgaria
4.7 Kazakhstan
10.1 Estonia
3.0 Mozambique
8.6 New Zealand
4.0 Philippines
4.7 Burundi
-0.1 Belarus
7.5 Germany
3.9 Yemen
3.3 Colombia
4.2 Hong Kong
4.3 France
4.9 Bangladesh
5.4 Egypt
3.7 Macedonia
1.7 Switzerland
-0.5 Guatemala
2.5

1.8
2.4
3.5
-1.8
5.4
1.1
3.7
7.9
5.1
10.6
3.2
1.9
4.9
-1.9
3.5
3.8
1.8
5.1
8.2
1.6
2.8
5.9
1.9
4.2
5.0
7.5
3.7
2.2
0.7
3.5
1.5
3.7
0.9

Two-Sample Test of Hypothesis for Proportion

Let

17

p = Proportion of countries with negative annual average GDP growth rate

H0: 90s = 00s
H1: 90s > 00s

Summary of Sample Statistics

0.22

p90s

Proportion of countries with negative annual average GDP growth rate from

1990-2000
50
0.06

n90s
p00s

Number of observations for 1990-2000

Proportion of countries with negative annual average GDP growth rate from

2000-2005
50 n00s Number of observations for 2000-2005
0.14 pboth Pooled proportion
1.65
z
Critical value for one-sided 95% level of confidence

Decision Rule
If > 1.96, then reject H0.

Computation

=
=

( ) ( )
+

0.22 0.06
0.14(10.14) 0.14(10.14)
+
50
50

= .

Two Sample Test of Hypothesis for Proportion

Using INSTAT

Conclusion
We reject H0 since [z=2.37] > 1.65. And since z > 0, we accept H1. The proportion of countries with
negative annual average GDP growth has declined in 2000-2005 since the 90s.

18