POSTS AND TELECOMMUNICATIONS INSTITUTE OF

TECHNOLOGY
——————–o0o——————–

Chapter 3: Descriptive Statistics

PROBABILITY & STATISTICS FOR ECONOMICS

Department of Mathematics, Faculty of Fundamental

Science 1

Hanoi - 2025

1 / 41 Chapter 3: Descriptive Statistics

Chapter 3: Descriptive Statistics

1 3.1 Key Statistical Concepts

2 3.2 Graphical Descriptive Techniques

3 3.3 Numerical Descriptive Techniques

2 / 41 Chapter 3: Descriptive Statistics

Chapter 3: Descriptive Statistics

1 3.1 Key Statistical Concepts

2 3.2 Graphical Descriptive Techniques

3 3.3 Numerical Descriptive Techniques

3 / 41 Chapter 3: Descriptive Statistics

3.1.1 What is statistics?

Statistics is a branch of mathematics dealing with the

collection, presentation, analysis, and use of data to make
decisions, solve problems, and design products and processes.
Two main statistical methods are used in data analysis:
descriptive statistics, inferential statistics.

4 / 41 Chapter 3: Descriptive Statistics

 Descriptive statistics deals with methods of organizing,
summarizing, and presenting data in a convenient and
informative way.
Inferential statistics is a body of methods used to draw
conclusions or inferences about characteristics of populations
based on sample data.

5 / 41 Chapter 3: Descriptive Statistics

3.1.2 Population

A population is a set of all items of interest.

The number of items in a population is called population size.
A numerical measurement describing some characteristic of a
population is called a parameter.

6 / 41 Chapter 3: Descriptive Statistics

 Example 1: In a study that is trying to determine the mean
weight of all 20-year-old males in the United States, the
population would be all 20-year-old males in the United States.

Example 2: If we are studying the grade point average (GPA) of

students at Harvard, the population is the set of all the students
at Harvard.

7 / 41 Chapter 3: Descriptive Statistics

3.1.3 Sample

A sample is a set of items drawn from the studied population.

The number of items in a sample is called sample size,
denoted by n
A numerical measurement describing some characteristic of a
sample is called a statistic.
We use statistics to make inferences about parameters.

8 / 41 Chapter 3: Descriptive Statistics

 Example 3. A manufacturer of computer chips claims that less
than 10% of its products are defective. When 1,000 chips were
drawn from a large production, 7.5% were found to be defective
a) What is the population of interest?
b) What is the sample?
c) Is the value 7.5% a parameter or a statistic?

9 / 41 Chapter 3: Descriptive Statistics

 a) The population of interest is all computer chips produced by
the manufacturer.
b) The sample consists of the 1,000 chips that were randomly
selected from the large production.
c) The value 7.5% is a statistic because it is calculated from a
sample (the 1,000 chips), not from the entire population.

10 / 41 Chapter 3: Descriptive Statistics

Chapter 3: Descriptive Statistics

1 3.1 Key Statistical Concepts

2 3.2 Graphical Descriptive Techniques

3 3.3 Numerical Descriptive Techniques

11 / 41 Chapter 3: Descriptive Statistics

 Frequency Distribution
The frequency distribution is a summary table in which the
data are arranged into numerically ordered intervals, called
classes, such that each value falls into one and only one class.
The number of observations falling into a class is called the
frequency of that class.

12 / 41 Chapter 3: Descriptive Statistics

 To construct a frequency distribution, we must divide the range of
the data into classes.
The classes should be of equal width.
largest value - smallest value
Class width =
number of classes

13 / 41 Chapter 3: Descriptive Statistics

 Example 6. A manufacturer of insulation randomly selects 20
winter days and records the daily high temperature.

24, 35, 17, 21, 24, 37, 26, 46, 58, 30, 32, 13, 12, 38, 41, 43, 44, 27, 53, 27

Construct a frequency distribution.

Select number of classes: 5.
Compute class width: 10 ((58 - 12)/5 = 9.2 then round up).

14 / 41 Chapter 3: Descriptive Statistics

 Determine class boundaries (limits):
- Class 1: more than 10 and less than or equal to 20.
- Class 2: more than 20 and less than or equal to 30.
- Class 3: more than 30 and less than or equal to 40.
- Class 4: more than 40 and less than or equal to 50.
- Class 5: more than 50 and less than or equal to 60.
Count the number of values in each class.

15 / 41 Chapter 3: Descriptive Statistics

 A frequency distribution

Temperature Frequency
10-20 3
20-30 6
30-40 5
40-50 4
50-60 2
Total 20

16 / 41 Chapter 3: Descriptive Statistics

 Histograms
The histogram is a visual display of the frequency
distribution.
A histogram is created by drawing rectangles whose bases are
the intervals and whose heights are the frequencies.

17 / 41 Chapter 3: Descriptive Statistics

18 / 41 Chapter 3: Descriptive Statistics
Shapes of Histograms

Symmetry
A histogram is said to be symmetric if, when we draw a vertical
line down the center of the histogram, the two sides are identical
in shape and size.

19 / 41 Chapter 3: Descriptive Statistics

 Skewness
A histogram is considered skewed if it has a long tail extending
either to the right or to the left. A tail extending to the right is
called positively skewed (or skewed to the right), while a tail
extending to the left is called negatively skewed (or skewed to the
left).

20 / 41 Chapter 3: Descriptive Statistics

 A modal class is the class with the highest frequency.
A unimodal histogram is one with a single peak.
A bimodal histogram is one with two peaks.

21 / 41 Chapter 3: Descriptive Statistics

Chapter 3: Descriptive Statistics

1 3.1 Key Statistical Concepts

2 3.2 Graphical Descriptive Techniques

3 3.3 Numerical Descriptive Techniques

22 / 41 Chapter 3: Descriptive Statistics

3.3.1 Measures of Central Location

Sample Mean
If the n observations in a sample are denoted by x1 , x2 , . . . , xn ,
then the sample mean is
n
x1 + x2 + . . . + xn 1X
x= = xi .
n n i=1

Example 8. A sample of 10 adults was asked to report the

number of hours they spent on the Internet the previous month.
The results are listed here. Calculate the sample mean.

0, 7, 12, 5, 33, 14, 8, 0, 9, 22.

23 / 41 Chapter 3: Descriptive Statistics

 To calculate the sample mean, we add all the internet usage
values:

0 + 7 + 12 + 5 + 33 + 14 + 8 + 0 + 9 + 22 = 110.

There are 10 values, so the sample mean is

110
x̄ = = 11.
10
The sample mean is 11 hours.

24 / 41 Chapter 3: Descriptive Statistics

 Median
The median is a measure of central tendency that divides the data
into two equal parts, half below the median and half above. When
the data set is ordered,
the median is the middle value if the number of observations
is odd,
the median is the average of the two middle values if the
number of observations is even.

25 / 41 Chapter 3: Descriptive Statistics

 Note: To find the sample median, we arrange the data in
ascending order.
i) If the number of observations n is odd, then the position of
n+1
the median is .
2
ii) If n is even, then the median is the average of the two
n n
observations whose positions are and + 1.
2 2

Example 9. Find the median of the following data

a) 22, 28, 41, 56, 79, 81, 95
b) 95, 38, 121, 52, 158, 137, 133, 63

26 / 41 Chapter 3: Descriptive Statistics

 Solution:
a) The data set is already in ascending order:

22, 28, 41, 56, 79, 81, 95

Since there are 7 values (odd number), the median is the 4th
value:
Median = 56
b) First, we sort the data:

38, 52, 63, 95, 121, 133, 137, 158

Since there are 8 values (even number), the median is the

average of the 4th and 5th values:
95 + 121 216
Median = = = 108
2 2

27 / 41 Chapter 3: Descriptive Statistics

 Mode
The mode is defined as the observation (or observations) that
occurs with the greatest frequency.
If no entry is repeated the data set has no mode.
If two entries occur with the same greatest frequency, each
entry is a mode.

Example 10. Find the mode(s) of the following data

78, 35, 78, 23, 45, 29, 45, 78, 15, 23

28 / 41 Chapter 3: Descriptive Statistics

 For the data set 78, 35, 78, 23, 45, 29, 45, 78, 15, 23, we observe
that 78 appears 3 times, which is the highest frequency.
Therefore, the mode of this data set is 78.

29 / 41 Chapter 3: Descriptive Statistics

3.3.2 Measures of Variability

Range
The range is the difference between the largest and smallest
values in the data set.
Range = Largest data value − Smallest data value

30 / 41 Chapter 3: Descriptive Statistics

 For the data set 12, 15, 18, 23, 29, 30, 45, the smallest value is 12
and the largest value is 45. Therefore, the range is:

Range = 45 − 12 = 33.

31 / 41 Chapter 3: Descriptive Statistics

 Sample Variance, Sample Standard Deviation
If the n observations in a sample are denoted by x1 , x2 , . . . , xn ,
then
the sample variance is

n
!2 
X
n

n
xi 
2 1 X
2 1 X
2 i=1

s = (xi − x) = xi − .
 
n − 1 i=1 n − 1  i=1 n


 

the sample standard deviation is s.

32 / 41 Chapter 3: Descriptive Statistics

 Example 11. The number of calories per serving for 7 brands of
cereals are
80, 100, 100, 110, 130, 190, 200.
Compute the variance, standard deviation, and range of these
data.

33 / 41 Chapter 3: Descriptive Statistics

 We have
7
X
xi = 910
i=1
X7
x2i = 131500.
i=1

The sample variance is given by

9102
 
2 1
s = 131500 − = 2200.
7−1 7
√
The standard deviation is s = s2 ≈ 46.904.
The range is 200 − 80 = 120.

34 / 41 Chapter 3: Descriptive Statistics

 If data are given in frequency distribution form, then
k
1X
x= ni xi ,
n i=1
k
2 1 X
s = ni (xi − x)2
n − 1 i=1

k
!2 
X

k
n i xi 
1  X
2 i=1

= n x − ,
 
i i
n − 1  i=1 n


 

where
n is the number of observations in the data set,
k is the number of classes,
ni and xi are the frequency and the midpoint of the ith class,
respectively.
35 / 41 Chapter 3: Descriptive Statistics
 Example 12. The heights of a group of professional basketball
players are summarized in the frequency distribution below.
Height (in.) Frequency
70-72 2
72-74 5
74-76 8
76-78 13
78-80 9
80-82 3
Calculate the sample mean, the sample standard deviation.

36 / 41 Chapter 3: Descriptive Statistics

 We have the following table
Height ni Midpoint xi n i xi ni x2i
70–72 2 71 142 10,082
72–74 5 73 365 26,645
74–76 8 75 600 45,000
76–78 13 77 1001 77,077
78–80 9 79 711 56,169
80–82 3 81 P 243 P 19,683
Total 40 ni xi = 3062 ni x2i = 234656
The sample mean is given by
3062
x̄ = = 76.55 inches
40
The sample standard deviation is calculated as
s  
1 30622
s= 234656 − ≈ 0.714 inches
39 40
37 / 41 Chapter 3: Descriptive Statistics
3.3.3 Measures of Linear Relationship

Sample Covariance
If (x1 , y1 ), (x2 , y2 ), . . . , (xn , yn ) are n pairs of observations on two
variables X and Y , then the sample covariance between X and Y
is n
X
(xi − x)(yi − y)
i=1
sxy =
n−1

38 / 41 Chapter 3: Descriptive Statistics

 Shortcut for Sample Covariance
 n
! n
!
X X
 n xi yi 
1 X i=1 i=1

sxy =  xi yi − 
n−1
 i=1 n 


39 / 41 Chapter 3: Descriptive Statistics

 Sample Coefficient of Correlation
The sample coefficient of correlation between X and Y is
sxy
r= ,
sx sy

where sx , sy are the sample standard deviations of X and Y ,

respectively.

Note:
−1 ≤ r ≤ 1.
r measures the strength of the linear relationship between
two numerical variables.

40 / 41 Chapter 3: Descriptive Statistics

 Example 13. A retailer wanted to estimate the monthly fixed
and variable selling expenses. As a first step, she collected data
from the past 8 months. The total selling expenses ($1,000) and
the total sales ($1,000) were recorded and are listed below.

Total Sales Selling Expenses

20 14
40 16
60 18
50 17
50 18
55 18
60 18
70 20
Compute the sample covariance and the sample coefficient of
correlation.

41 / 41 Chapter 3: Descriptive Statistics

 First, we calculate the required sums, as shown in the following
table
xi yi x2i yi2 xi yi
20 14 400 196 280
40 16 1600 256 640
60 18 3600 324 1080
50 17 2500 289 850
50 18 2500 324 900
55 18 3025 324 990
60 18 3600 324 1080
70 20 4900 400 1400
P P P 2 P 2 P
xi = 405 yi = 141 xi = 22125 yi = 2437 xi yi = 7220

The sample covariance is given by

 
1 405 × 141 655
sxy = 7220 − =
8−1 8 56

41 / 41 Chapter 3: Descriptive Statistics