FBE UII
Statistics
Prepared by
Abdul Hakim
Week 1
Introduction
2
Introduction
Statistical thinking will one day be as necessary for efficient citizenship as the ability to
read and write.
H.G. Wells
3
Introduction
• Statistics = data.
• Modern statistics encompasses the collection, presentation, and characterization of
information to assists in both data analysis and the decision-making process.
4
Introduction
We use statistics for:
• In accounting (to name but a few):
o To select samples for auditing purposes
o To understand the cost drivers in cost accounting.
• In finance:
o To track trends in financial measures over time
o To develop ways of forecasting values of these measures at future points of time.
• In Business:
o To track trends in revenue over time
o To help modelling the best human resource behaviour
5
Introduction
• During the Egyptian, Greek and Roman
civilizations, data were obtained.
• In the Middle Ages, church institutions
often keep records concerning births,
deaths, and marriages.
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Two Types of
Statistics
Descriptive statistics Inferential statistics
• methods involving the collection, • methods that make possible the
presentation, and characterization of a estimation of a characteristic of a
set of data in order to properly describe population or the making of a decision
the various features of that set of data concerning a population based only on
[measures of central tendency, sample results.
dispersion, type of distributions]
7
Some Key Terms
• A population (or universe) is the • A parameter is a summary measure
totality of items or things under that is computed to describe a
consideration. characteristic of an entire
• A sample is the portion of the population.
population that is selected for • A statistic is a summary measure
analysis. that is computed to describe a
characteristic from only a sample of
the population.
8
Data Collection
• Data: numerical information • We need data to:
needed to help us make a more o Provide the necessary input to a research
informed decision in a particular in study,
situation. o Measure performance in an ongoing
service or production process,
o Assists in formulating alternative
courses of action in a decision making
process,
o Satisfy our curiosity.
9
Obtaining Data
• Using published sources of data • We can collect data compiled by
other agents.
o The one collecting the data is the
primary source, while the one
compiling the data is the
secondary sources.
o Say you collect data about stock
market from Bloomberg, the data
you are collecting is secondary
data.
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Obtaining Data
• Gaining data through observation:
Observe and take notes
Big Data for retailer business
[Link]
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Obtaining Data
• Designing an experiment:
A trial (or test) exercised under a strict
control to demonstrate a known truth.
An experiment in physics (psychology?)
[Link]
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Obtaining Data
• Conducting a survey: Gathering data process by
asking questions to the participants (respondents)
or informant about certain things.
• There is no control exercised under such a study.
• e.g.: finding out the perception of accountant about
a new regulation in public accounting practice.
13
Obtaining Data
Survey using qustionnaire by
• Mail
• Social media
• Guided process
[Link]
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Designing a questionnaire:
chocolate product
14
Obtaining Data
• Survey using in-depth interview
A job interview
[Link]
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15
Obtaining Data
• Survey using focus group discussion (FGD)
[Link]
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Using Focus Group in Research
16
Types of Data
Numerical vs categorical data
• Numerical data: data in numerical number.
e.g.: stock price index
• Categorical data: non-numerical data.
e.g.: types of car (sedan, truck, SUV)
17
Types of Data
Discrete vs continuous data
• Discrete data: numerical responses that arise from a counting process.
e.g.: number of houses in Yogyakarta.
• Continuous data: numerical responses that arise from a measuring
process.
e.g.: height of students in a university.
18
Levels of measurement and types of
measurement scales
Nominal vs ordinal scales. Interval vs ratio scales
• Nominal scale: categorical data with no • Interval: an ordered scale in which the
ordering is implied. difference between the measurements is a
e.g.: car ownership: yes or no. meaningful quantity
e.g.: temperature degrees: 1°C, 2°C, 3°C, 4°
• Ordinal scale: categorical data in which C. Note that 4°C does not necessarily means
ordering is implied. that it is 4 times warmer than 1°C.
e.g.: S&P bond ratings: AAA AA A
BBB BB B CCC CC C DDD DD D. • Ratio scales: all characteristics of interval
scales, and the ratios measurements are
sensible to consider.
e.g.: the height of students: 150 cm, 150
cm,... 2 m. Note that a student of 2 m tall is
twice taller than a student of 1 m tall.