UNIT IV
Introduction:
In the modern world of computers and information technology, the importance of statistics is very
well recognized by all the disciplines. Statistics has originated as a science of statehood and found
applications slowly and steadily in Agriculture, Economics, Commerce, Biology, Medicine,
Industry, planning, education and so on. As to date there is no other human walk of life, where
statistics cannot be applied.
Definition of Statistics: Statistics is defined by different authors over a period. statistics has
been defined in two different ways – Statistics as Statistical data (plural sense) and Statistics as
statistical methods (singular sense)
In Plural sense
Statistics are “the collection of numerical facts”. They are the facts, which can be stated in numbers
or in tables of numbers.
For e.g.,
• The largest earthquake measured 9.2 on the Richter scale.
• Men are at least 10 times more likely than women to commit murder.
• One in every 8 South Africans is HIV positive.
Characteristics of numerical facts are:
1. They must be aggregate of fact.
2. They must be numerically expressed.
3. They should be collected in systematic manner.
4. They should be placed in relation to each other.
5. They should be collected for a predetermined purpose.
6. They are affected by multiplicity of factors.
7. They are enumerated or estimated according to a reasonable standard of accuracy.
In Singular sense
Statistics is a science of collection, organization, presentation, analysis, and interpretation of
numerical data.
According to this definition there are five stages of statistics which are given bellow:
1. Collection of Data: Collection of relevant data concerning a problem is the first step in
statistical method. Depending upon the problem under study, it is decided as to how,
when and where and what kind of data are to be collected.
2. Organization of Data: The second step in statistical methods is to organize the collected
data. With a view to rendering the collected data more comparable and simpler, it is
classified on the basis of time, place and quality, etc.
3. Presentation of Data: To make the data intelligible, brief, and attractive, it is presented in
the form of tables, diagrams and graphs.
4. Analysis of Data: The fourth step of the analysis of data. To draw conclusions, it is
necessary to analyze the data. There are different methods of analyzing the data, e.g.,
measures of central tendency, measure of variation, correlation, regression, etc.
5. Interpretation of Data: Under this method, conclusions are drawn after analyzing the data.
Two or more kinds of data are compared, and conclusions drawn. Even a layman may
understand them. The conclusions are expressed in simple and easy language. On the
basis of such conclusions future estimates are made.
Functions of Statistics:
1. Statistics help in presenting facts in definite form.
2. Statistics help in condensing a large mass of figures.
3. Statistics facilitate comparisons.
4. Statistics help in correlating data.
5. Statistics help in prediction.
6. Statistics help in formulating and testing hypotheses.
7. Statistics help in the formulation of policies.
Limitations of Statistics:
Through, the Science of Statistics is very useful in a variety of problems of real life, but it has its
own limitations.
1. Statistics deals with numerical facts only.
2. Statistics deals only with groups and not with individuals.
3. Statistical results are true only on average.
4. Statistical results are only approximately true.
5. Statistics are liable to be misused.
6. Statistics must be used only by experts.
Importance of Statistics
1. Data Analysis and Interpretation: Statistics plays a crucial role in analyzing and
interpreting data. It helps in identifying patterns, trends, and relationships within data,
enabling better decision-making and problem-solving.
2. Research and Experimentation: In scientific studies statistics provides the technique to
design experiments, collect data, and draw meaningful conclusions from the results. It
ensures that research findings are reliable and can be generalized to a population.
3. Predictive Modeling: Statistics is used to develop predictive models in various fields.
These models help in forecasting future trends, behavior, and outcomes based on historical
data, contributing to better planning and optimization of resources.
4. Quality Control and Assurance: Statistics is applied to ensure the quality and consistency
of products and results. It helps in identifying deviations and anomalies, leading to
improvements and more reliable outcomes.
5. Decision Making under Uncertainty: Statistics provides methods to quantify and manage
this uncertainty, aiding in informed decision-making even in the presence of incomplete
information.
6. Data Visualization: Statistics allows data to be presented in a visually appealing and
informative manner through graphs, charts, and plots. This enhances the understanding of
complex data sets and facilitates effective communication of results.
7. Machine Learning and Artificial Intelligence: In the era of AI and machine learning,
statistics form the foundation of these technologies. It helps in training algorithms,
assessing their performance, and making data-driven predictions and classifications.
8. Business and Finance: Statistics is integral to analyzing market trends, conducting market
research, and making financial projections. It assists in risk assessment, investment
decisions, and strategic planning.
9. Health Sciences: In scientific research related to health and diseases, statistics is vital for
studying disease patterns, evaluating treatment effectiveness, and identifying risk factors.
10. Social Sciences and Surveys: Statistics is essential for designing surveys, sampling
techniques, and analyzing survey data to draw meaningful insights.
The subject Statistics Partitioned into two parts, Descriptive study and Inferential study.
Descriptive Study: A descriptive study is focused on describing and summarizing the
characteristics of a population or a phenomenon. The primary goal of a descriptive study is to
provide a clear and comprehensive picture of the data without making inferences or drawing
conclusions beyond the data itself.
Common methods used in descriptive studies include:
Measures of Central Tendency: Calculating mean, median, and mode to represent the
typical value of a dataset.
Measures of Dispersion: Calculating range, variance, and standard deviation to show the
spread of data.
Frequency Distributions: Organizing data into groups or categories and presenting the
frequencies of each category.
Graphical Representations: Creating graphs and charts (e.g., histograms, bar charts, pie
charts) to visualize data patterns.
Inferential Study: An inferential study involves drawing conclusions and making inferences
about a population based on a sample of data. The goal of inferential studies is to generalize
findings from a sample to a larger population and to make predictions or test hypotheses. This is
done by applying statistical methods that quantify the uncertainty associated with the conclusions.
Inferential studies involve more complex analysis techniques and require careful consideration of
sampling methods to ensure that the sample is representative of the population.
Common methods used in inferential studies include:
Hypothesis Testing: Evaluating whether observed differences or relationships in the
sample are statistically significant and can be generalized to the population.
Confidence Intervals: Estimating the range within which a population parameter is likely
to fall based on sample data.
Types of Data
According to sources of collecting data, there are two types of data, the Primary data and
Secondary data.
Primary data
The data which are collected for the first time by/for the investigator for his purpose is called
primary data.
For example the data of census report collected by the government, the data collected by any agency for
its own purpose, the gadget of India, etc.
Secondary data
The data which has already been collected by someone else but used by investigator for his purpose
is known as secondary data.
For example the data collected by any medical agency can be used by some other medical institute
students.
The primary data collected with a specified objective of investigation, are likely to be more reliable
as compared to secondary data. The use of secondary data, whenever necessary, must be done
very carefully. The cost of collection of primary data, however, is much higher.
According to characteristics under study the data can be :Qualitative or Quantitative.
Qualitative data: non-numerical information that describes qualities, attributes, or
characteristics. It is often used to capture subjective observations, opinions, and feelings.
Quantitative data: Numerical information that involves measurements or counts. It is used to
quantify quantities, sizes, and amounts and can be subjected to mathematical analysis.
Measurement and scaling
Measurement: Measurement is the process of observing and recording the observations may be
in terms or numbers or other symbols to characteristics of objects according to certain prescribed
rule.
Scaling: The assignment of object to numbers or other symbols to characteristics of objects
according to certain prespecified rule.
Types of Scales of measurement:
1. Nominal
2. Ordinal
3. Interval
4. Ratio
1. Nominal: A scale whose numbers serve only as labels or tags for identifying and classifying
objects with a strict one-to-one correspondence between the numbers and objects.
For example, Social security numbers, numbering of football players, Gender, students roll
numbers, bank account number etc.
Permissible descriptive statistics are percentages and mode where as permissible inferential
statistics are Chi-square test and binomial test.
2. Ordinal: A ranking scale in which numbers are assigned to objects to indicate the relative extent
to which some characteristic is possessed. Thus, it is possible to determine whether an object has
more or less of a characteristic than some object.
For example, market position (law, medium, and high), income class (poor, middle, and rich),
ranking of teams in tournaments, staff service for customer of XYZ Bank (excellent, good, poor)
etc.
Permissible descriptive statistics are percentile and median where as permissible inferential
statistics are rank-correlation and ANOVA.
3. Interval: A scale in which the numbers are used to rate objects such that numerically equal
distances on the scale represent equal distances in the characteristic being measured.
For example, Temperature, rating of attitude, opinions, performance etc on 1-10 scale (1-5 scale),
staff service for customer of XYZ Bank (1=excellent,2= very good, 3=good, 4=poor, 5=worst) etc.
Permissible descriptive statistics are range, mean, variance where as permissible inferential
statistics are product moment correlation, t-test , ANOVA, regression, factor analysis.
4. Ratio: It is highest scale. It allows the researcher to identify or classify objects, rank order the
objects and compare intervals or distances. It is also meaningful to compute ratios of the scale
values.
For examples, length, weight, age, cost, sales, revenue, income etc.
Permissible descriptive statistics are geometric mean, harmonic mean, coefficient of variation
where as permissible inferential statistics are all types of inferential procedures and techniques.