31/07/2023

Business Statistics

Lecturer
Dr. Le Hoang Minh Nguyet
Faculty of Statistics, National Economics University
Address: Room No. 801, Building A1, NEU
Handphone: 0983.060.698
Email: lehoangminhnguyet@[Link]
Website: [Link]

Objectives
By the end of the course, students should be able to:
• Offer appropriate and effective descriptions of sets of data
• Describe data with graphical, tabular, and quantitative summaries
• Calculate and apply measures of central location and measures of dispersion
• Calculate and interpret confidence intervals for samples dealing with population
means and proportions
• Form and test well‐defined hypotheses about a population’s mean or proportion
• Conduct and interpret the results of a simple regression analysis
• Use time series analysis and forecasting models to make better forecasts
• Calculate and interpret index numbers
In addition, you will learn some of the basic skills for using SPSS to present and
analyze data.

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Content

• Chapter 1: Introduction to Statistics

• Chapter 2: Presenting Data in Tables and Charts
• Chapter 3: Numerical Descriptive Measures
• Chapter 4: Sampling surveys
• Chapter 5: Simple Linear Regression
• Chapter 6: Time-series and Forecasting
• Chapter 7: Index numbers

Textbook
Statistics for Business and Economics, Thirteenth Edition
David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D.
Camm, James J. Cochran
South‐Western, Cengage Learning, 2017

Assessment & Grading Policy

• Attending class: 10%
• Mid‐term exams (open books, open notes): 40%
• Final exam (open books, open notes): 50%

To be eligible for final exam, students need to achieve mimimum scores of 5

for attending class and 3 for mid‐term exam

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Chapter 1. Introduction to Statistics

Learning objectives
This chapter will help you learn:
How statistics is used in economics and business

What are some basic concepts and terminologies

What are the types of data

What are the sources of data

What are the scales of measurement

What are the two branches of Statistics

How to design a statistical study

Why learn Statistics?

Everyday decisions are based on incomplete information, i.e, we must deal with
uncertainty

Consider:
• Will the job market be strong when I graduate?
• Will the price of Vinamilk stock be higher in six months than it is now?
• Will interest rates remain low for the rest of the year if the state budget deficit is
as high as predicted?

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Why learn Statistics?

• Data are everywhere.

• Numbers and data are used to assist decision making
• No matter what your career, you will make professional decisions that involve
data.
→ An understanding of statistical methods will help you make these decisions
effectively, especially, under uncertainty.

What is Statistics?

Statistics is the science of collecting, organizing, analyzing, and

interpreting data in order to make decisions

Statistical Applications in Economics and Business

 Accounting: Accountants use statistics to forecast consumption, sales,

earnings, cash flow and book value
 Finance: Financial advisors use statistical models to guide their investment
advice
 Marketing: Electronic point‐of‐sale scanners at retail checkout counters are
used to collect data for a variety of marketing research applications

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Statistical Applications in Economics and Business

 Production: Statistical quality control charts are used to monitor the output of
a production process
 Economics: we estimate and test economic models and their predictions; Use
empirical models for prediction, forecasting, and policy analysis
…

Some basic concepts and terminologies

• Populations & Samples
• Parameters & Statistics
• Variables & Data
• Elements & Observations

Populations & Samples

a b cd
• A population is the entire set of observations under study
ef gh i jk l m n
• E.g: A population of all NEU students
o p q rs t u v w
A population of all enterprises located in Vietnam x y z

• A sample is a subset of a population b c

• E.g: A sample of 100 NEU students gi n

A sample of 500 enterprises located in Vietnam o r u

y

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Parameters & Statistics

• A parameter is a numerical description of a population characteristic.

• A statistic is a numerical description of a sample characteristic.

Parameter Population

Statistic Sample

Note: A sample statistic can differ from sampe to sample, whereas the
population parameter is constant.

Variables & Data

 A variable is characteristic of an item or individual
Eg: Height of female students
Skin colour of international students in class A
 A data is simply a “scientific” term for facts, figures, information and
measurements
→ Data are different values associated with a variable
Eg: Height of 10 female students: 1.6, 1.7, 1.55, 1.59, 1.5, 1.58, 1.64,
1.67, 1.58, 1.55
Skin colour of 5 international students in class A: black, white, white,
yellow, brown, yellow
 The data collected in a particular study are referred to as the data set.

Elements & Obseverations

• The elements are the entities on which data are collected.
→ A variable is a characteristic of interest for the elements.
• The set of measurements collected for a particular element is called an
observation.
• The total number of data values in a data set is the number of elements
multiplied by the number of variables.

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Summary Table
Variables
Element
Names Stock Annual Earn/
Company Exchange Sales($M) Share($)

Dataram AMEX 73.10 0.86

EnergySouth OTC 74.00 1.67
Keystone NYSE 365.70 0.86
LandCare NYSE 111.40 0.33
Psychemedics AMEX 17.60 0.13

Data Set

Types of Data

Data

Categorical Numerical
(Qualitative) (Quantitative)

Discrete Continuous

Categorical (qualitative) data

• Consists of attributes, labels, or nonnumerical entries.

→ Defined categories or groups

• Examples: Marital Status (single, married, separated, divorced, or widowed)

Gender (male, female)

Eye Color (brown, black, blue, …)

 Appropriate statistical analyses are rather limited

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Numerical (quantitative) data

• Consists of numerical measurements or counts.

• Indicate how many or how much:

• Discrete, if measuring how many. E.g., number of Children; age …

• Continuous, if measuring how much. E.g., Weights of postal packages;

Monthly salary …

• Ordinary arithmetic operations are meaningful for quantitative data

Note
• The appropriate statistical analysis depends on whether the data for the variable
are qualitative or quantitative.

• There are more options for statistical analysis when the data are quantitative.

Types of Data

For each of the following examples of data, determine the type:

i. The number of kilometers joggers run per week

ii. The cities/provinces in Vietnam

iii. The starting salaries of graduates of NEU

iv. The months in which a firm’s employees choose to take their vacations

v. The occupation of graduates of NEU

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Levels of Measurement (Measurement Scales)

• The level of measurement determines which statistical calculations
are meaningful.
• The four scales of measurement are: nominal, ordinal, interval, and
ratio.
Nominal
Ordinal Lowest
Levels of
to
Measurement
Interval highest
Ratio

Nomimal Scale
• Data are labels or names used to identify an attribute of the element.
• Eg. Gender, occupation, marital status
Colors in the skin
Names of students in your class
Textbooks you are using this semester
• Data at the nominal scale are qualitative only.
• No mathematical computations can be made at this level.

Ordinal Scale
• The data have the properties of nominal data and the order or rank of the data is
meaningful.
• Eg. Students of a university are classified by their class standing using a
nonnumeric label such as: freshman, sophomore, junior, senior
Levels of satisfaction with life (dissatisfied, slightly dissatisfied, neutral,
slightly satisfied, satisfied)
Top 50 songs played on the radio
• Data at the ordinal scale are qualitative or quantitative.

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Interval Scale
• The data have the properties of ordinal data, and the interval between
observations is expressed in terms of a fixed unit of measure.
• Data at the interval scale are quantitative only.
• Eg. Temperatures; Scores …
• A zero entry simply represents a position on a scale; the entry is not an inherent
zero, i.e, no natural starting point.
• The interval differences are meaningful but, we can’t defend ratio relationships.
• Eg. The difference between 10 and 20 degrees is the same as between 80 and
90 degrees but, we can’t say that 80 degrees is twice as hot as 40 degrees

Ratio Scale
• The data have all the properties of interval data and the ratio of two values is
meaningful.
• This scale must contain a zero value (a natural starting point) that indicates that
nothing exists for the variable at the zero point.
• Data at the ratio scale are quantitative only.
• Eg. Variables such as distance, height, weight, and time…

Summary of Levels of Measurement

Determine if one
Arrange Subtract data data value is a
Level of Put data in
data in values multiple of
measurement categories
order (Differences) another (A natural
starting point)
Nominal Yes No No No
Ordinal Yes Yes No No
Interval Yes Yes Yes No
Ratio Yes Yes Yes Yes

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Types of Data

Data

Cross-sectional Time-series Pooled

Cross‐sectional Data

• Cross‐sectional data are collected at the same or approximately the same

point in time.

• E.g. Income distribution of households in Vietnam

Data on GDP per capita in all Asian countries, etc.

Time‐series Data
• Time‐series data are collected over several time periods.
• They are usually collected at fixed intervals, such as daily, weekly, monthly,
quarterly, annually, etc
• E.g. Price of stocks
GDP of Vietnam over 20 years

• Time series data requires different technique to analyze the data compare to
cross‐sectional data.

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Pooled Data

• Pooled data is a mixture of time‐series data and cross‐sectional data.

• E.g. GDP per capita of all Asian countries over ten years

Data sources
• Based on the place of collecting information:

Internal data External data

data collected within data collected from
an organisation outside organisation
Eg: Eg:
- Number of NEU students - Inflation rate in July, 2019 of
- Salaries of NEU staffs Vietnam
- Behaviours of consumers of
Vietcombank

Data sources
• Based on the method of collecting information:

Primary data Secondary data

collected by the collected by other
organisation itself for organisations for other
the particular purpose purposes

Eg: you need to know the

Eg: the Vietnam household
consumer’s behaviour of
Techcombank, then collect living standards survey in
this information yourself 2018

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Sources of secondary data

1
Internet research

2
Government data
and official publications

3
Internal and by-product data

Internet research
 Search through Vietcombank website ([Link]) to know the
exchange rate

 Search through Google to gather information about the performance of private

firms in Vietnam since ‘Doi moi’

Government data and official publications

 The General Statistics Office (GSO) of Vietnam provides all socioeconomic

information ([Link])

 Data from surveys carried out by GSO and other organisations

 The Ministry of Finance ([Link]) provides information on budget

statement …

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Internal and by‐product data

Data collected from different departments in an organisation and used all together
 Data from Sale Department
 Data from Human resource Department
 Customer records
 Sale reports
 Inventory orders …
=> To make decision

Sources of primary data

1
Experimental study

2
Survey

3
Observational study

Experimental study

 In experimental studies variables of interest are identified. Then additional

factors are varied to obtain data that tells us how those factors influence the
variables.
 Eg. A pharmaceutical firm might be interested in conducting an experiment to learn about
how a new drug affects blood pressure. To obtain data about the effect of the new drug,
researchers select a sample of individuals. The dosage level of the new drug is control, as
different groups of individuals are given different dosage levels. Before and after data on
blood pressure are collected for each group. Statistical analysis can help determine how the
new drug affects blood pressure.

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Survey

 A survey is an investigation of one or more characteristics of a population.

• A census is a measurement of an entire population (collecting data for a population)
• Ask the preference of all customers of Vietcombank
• The 2019 Census on Population and Housing of Vietnam (all Vietnamese
citizens)
• A sample survey is a measurement of part of a population (collecting data for a
sample)
• Ask the preference of some customers of Vietcombank
• Vietnam Household Living Standard Survey 2018 (some households)

Observational study

 In an observational study, a researcher observes and measures characteristics of

interest of part of a population.
• Data collected by directly observing a behavior, usually in a natural or neutral
setting. We cannot control or influence the variables of interest.
 Observational studies are a common tool for data collection in business.

 Eg. Market researchers use focus groups to elicit unstructured responses to

open‐ended questions posed by a moderator to a target audience.

Two branches of Statistics

Descriptive Statistics Inferential Statistics
Collecting and describing Making decisions based on
data sample data

Collect data
Estimation

Present data

Hypothesis testing
Summarize data

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Descriptive Statistics

• Descriptive Statistics focus on collecting, presenting and summarizing

a set of data

Descriptive Statistics

• Collect data
• e.g., Survey

• Present data
• e.g., Tables and graphs

• Summarize data
• e.g., Sample mean =
Purpose: describe data

Inferential Statistics
• Inferential Statistics uses data that have been collected from a small group
(sample) to draw conclusions about a larger group (population).
• Because a sample is typically only a part of the whole population, sample data
provide only limited information about the population. As a result, sample
statistics are generally imperfect representatives of the corresponding population
parameters.

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Inferential Statistics
• Estimation
• e.g., Estimate the population mean
weight using the sample mean
weight
• Hypothesis testing
• e.g., Test the claim that the
population mean weight is 70 kg

Inference is the process of drawing conclusions or making decisions

about a population based on sample results

Designing a Statistical Study

GUIDELINES
1. Identify the variable(s) of interest (the focus) and the population of the study.
2. Develop a detailed plan for collecting data. If you use a sample, make sure the
sample is representative of the population.
3. Collect the data.
4. Describe the data.
5. Interpret the data and make decisions about the population using inferential
statistics.
6. Identify any possible errors.

Summary

 Understand what is Statistics

 Distinguish population and sample
 Discribe variables and data
 Distinguish types of data
 Categorical data
 Numerical data
 Distinguish scales of measurement
 Understand different sources of data
 Distinguish two branches of statistics

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