Chapter 1:
Introduction to Statistics
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Topics
• Definition of Statistics
• Its applications in business
• Descriptive statistics and inferential statistics
• Sources of data
• Types of variable
• Level of measurement.
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What is Statistics?
Statistics: Consists of 5 actions.
✓Collecting
✓Organizing
✓Summarizing
✓Analyzing
✓Presenting
It helps us to be informed about what is happening around us.
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Definition Of Statistics
“Statistics is concerned with scientific method for
collecting, organizing, summarizing, analyzing and
presenting data as well as deriving valid
conclusions and making reasonable decisions on the
basis of this analysis.”
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Data and Data Sets
➢Data are the facts and figures collected, summarized,
analyzed, and interpreted.
➢The data collected in a particular study are referred to as the
Data Set.
➢Data are of two types:
▪ Qualitative Data
❑Eye color, examination grade etc.
▪ Quantitative Data
❑Height, weight, income etc.
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Why Collect Data?
• Obtain input to a research study
• Measure performance
• Assist in formulating decision alternatives
• Satisfy curiosity
– Knowledge for the sake of knowledge
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Population & Sample
• The entire group of individuals is called the population.
• Usually populations are so large that a researcher cannot
examine the entire group.
• A sample is selected to represent the population in a research
study.
• The goal is to use the results obtained from the sample to help
answer questions about the population.
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Why Statistics is Important to Study?
• In government, business, and natural and social sciences.
• Statistical methods are applied in all fields that involve
decision making.
• The use of modern computers has expedited large-scale
statistical computations
• Statistics continues to be an area of active research.
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Its Application In Business
• Accounting
• Marketing
• Production
• Agriculture
• Forestry
• Medical Studies
• Education
• Sports
• USE OF GRAPHS 10
Descriptive Statistics
• Descriptive statistics
✓ Describing
✓Organizing and
✓ Summarizing
• For example, tables or graphs are used to organize data,
and descriptive values such as the average score are used
to summarize data.
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Inferential Statistics
• Inferential statistics
✓ Makes general conclusions (inferences) about
populations.
• It is also called inductive statistics
• It involves making prediction of values that are not
really known.
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Difference
“Descriptive Statistics are distinguished from
Inferential Statistics in that it aims to summarize
a dataset, rather than the use of the data to learn
about the population of the data are thought to
represent.”
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Variable
• A characteristic or property
• Often but not always quantitively measured.
• Containing two or more values or categories
• Vary from one individual to another.
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Types of Variable
• Qualitative Variable
❖Place of Birth (rural, urban, sub-urban)
❖Color of garment (red, white, etc)
• Quantitative Variable
❖Income of individuals
❖Day Temperature
• Discrete Variable
❖ Family Size
❖Number of typing errors in a document.
• Continuous Variable
❖Waiting time of customers in a bank. 15
Level of Measurement
• In Statistics, level of measurement is a classification that
relates the values that are assigned to variables with each
others.
• In other words, level of measurement is used to describe
information within the values.
• There are four level of measurement.
1) Nominal Level
2) Ordinal Level
3) Interval Level
4) Ratio Level.
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Level of Measurement
Nominal Level
• Categories are homogeneous, mutually exclusive
• No ordered relationships between categories made.
Example:
Eye color, religion, place of residence, gender.
Ordinal Level
• All the above plus the categories can be ranked or ordered.
Example:
Examination grade, health status, level of education, rank in job.
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Level of Measurement
Interval Level
• Exact difference between categories are specified.
• An arbitrary zero point is assumed.
Example:
Temperature, IQ test score.
Ratio Level
• All the above with the exception that a true zero point is
assumed.
Example:
Height, weight, wage.
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•Learning Resources
•Required Text Book:
•Douglas A. Lind, William G. Marchal, Samuel A. Wathen,
Statistical Techniques in Business & Economics, 14th Edition.
•Reference Books:
•Hahn, Gerald J., The Role of Statistics in Business and
Industry, Wiley, Lodi Campus Library – Stacks, Latest
Edition.
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