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Chapter 1 Introduction
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What is Statistics?
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Definition of Statistics Reasons of Studying Statistics Types of Statistics Types of Variables Level of Measurement Uses and Abuses of Statistics.
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What is Meant by
The word statistics is used to refer to
Numerical information
Such as the--- average starting salary of University Graduates, Average number of students appeared in SSC examination
Statistics?
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What is Meant by
Statistics is the science of collecting, organising, presenting, analysing and interpreting data to assist in making more effective decisions.
Statistics?
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collecting
What is Meant by
organizing
presenting data drawing inferences
from a sample of information about an entire population as well as
Statistics?
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predicting and
developing policy analysis
Who uses Statistics?
Those using Statistical techniques include :
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Marketers
Accountants Hospitals Educators
Investors
Sports people Economists
Statisticians Politicians
Consumers
Quality Controllers
Physicians
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Data are everywhere
Statistical techniques are used to make many decision that affect our lives
No matter what your future line of work, you will make decisions that involve data.
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Types of Statistics
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Types of Statistics
Descriptive Inferential
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Methods of collecting organizing presenting and analyzing data
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Science of making inferences about a population, based on sample information.
Descriptive Statistics
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are methods of organizing, summarizing, and presenting data in a convenient and informative way. EXAMPLE 1: According to Consumer Reports, General Electric washing machine owners reported 9 problems per 100 machines during 2001. The statistic 9 describes the number of problems out of every 100 machines.
These methods include:
Tabular, Graphical Techniques Numerical Techniques
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Descriptive Statistics
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The actual method used depends on what information we would like to extract. Are we interested in
measure(s) of central location? and/or measure(s) of variability (dispersion)?
Descriptive Statistics helps to answer these questions
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Inferential Statistics
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Descriptive Statistics describe the data set thats being analyzed, but doesnt allow us to draw any conclusions or make any interferences about the data. Hence we need another branch of statistics: inferential statistics. Inferential statistics is also a set of methods, but it is used to draw conclusions or inferences about characteristics of populations based on data from a sample.
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Statistical Inference
Population
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Statistical inference is the process of making an estimate, prediction, or decision about a population based on a sample.
Sample
Inference
Statistic
Parameter
What can we infer about a Populations Parameters based on a Samples Statistics?
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Statistical Inference
We use statistics to make inferences about parameters. Therefore, we can make an estimate, prediction, or decision about a population based on sample data.
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Thus, we can apply what we know about a sample to the larger population from which it was drawn!
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Statistical Inference
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Rationale: Large populations make investigating each member impractical and expensive. Easier and cheaper to take a sample and make estimates about the population from the sample. However: Such conclusions and estimates are not always going to be correct. For this reason, we build into the statistical inference measures of reliability, namely confidence level and significance level.
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Confidence & Significance Levels1 - 17
The confidence level is the proportion of times that an estimating procedure will be correct. E.g. a confidence level of 95% means that, estimates based on this form of statistical inference will be correct 95% of the time.
When the purpose of the statistical inference is to draw a conclusion about a population, the significance level measures how frequently the conclusion will be wrong in the long run. E.g. a 5% significance level means that, in the long run, this type of conclusion will be wrong 5% of the time.
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Identify the following
Descriptive A. A Gallup poll found that 83% of the people in a survey knew which country won the gold medal in Mens Hockey in 2002. B. The accounting department of a firm will select a sample of invoices to check for accuracy of all the invoices of the company. C. Coca-cola tasters sip a few drops of coke to make a decision with respect to all the coke waiting to be released for sale.
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Inferential
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Types of Statistics / Branches of Statistics
Statistics
Descriptive Statistics Inferential Statistics
Parametric Statistics
Non-Parametric Statistics 19
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Population A collection of all possible individuals, objects or measurements of interest. Sample A portion, or part, of the population of interest. Observation An observation is the value, at a particular period, of a particular variable. Variable A symbol that stands for a value that may vary. in (computer programming), a symbolic name associated with a value and whose associated value may be changed. Data Data are the observed values of a variable. E.g. student marks: {67, 74, 71, 83, 93, 55, 48}
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A population is a collection of all possible individuals, objects, or measurements of interest
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From
Take a
which are deemed to be representative of the
What we now need is
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Take a Measurement for each one in the sample
Record
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Why take a sample instead of studying every member of the population?
Costs of surveying the entire population may be too large or prohibitive Destruction of elements during investigation
Accuracy of results
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Types of Variables
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A Variable
a characteristic of a population or sample that is of interest to us
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Types of Variables
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Variables
Qualitative
Categorical Observations
Quantitative
Numerical Observations
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Variables
Qualitative or Attribute
Country of Birth U.K. Eye Colour Germany Blue Gender Taiwan Brown Male China Hazel India Female Green Japan Red Russia
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Variables
Quantitative Numeric
Minutes to end of Class 55 Number of 45 Children in 30 a Family 5
0 1 2 3 4
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Number of Two-Door Garages in a Street
10 20 30 40 ...
Number of Satisfied Facebook Fans 0 20 30 40
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Variables
Numerical Observations
Discrete or Continuous
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Quantitative can be classified as either
Discrete
Characteristics can only assume certain values and there are usually gaps between values
e.g. - Number of bedrooms in a house - Number of Students in AUST
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Variables
Numerical Observations
Discrete or Continuous
Characteristics
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Quantitative can be classified as either
Continuous
can assume any value within a specified range!
e.g. - Pressure in a tire - Weight of a shipment - Height of students in a class
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Summary of Types of Variables
Variable
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Qualitative
Categorical Observations
Quantitative
Numerical Observations
Discrete
(number of children)
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Continuous
(time used for an exam)
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Types of variables
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Nominal/Categorical
Ordinal/Rank
Interval
Ratio
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Nominal
Data can only be classified into categories or counted and cannot be arranged in any particular order
Example
Pran
Category: Classification:
Candy
By Colour only
(No natural order)
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Nominal
Example
Pran
Data categories are mutually exclusive: an individual, object, or measurement is included in
ONLY ONE CATEGORY Data categories are exhaustive: Each individual, object, or measurement MUST APPEAR in one of the categories Data categories have no logical order.
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Ordinal
involves data arranged in some order, but the differences between data values cannot be determined or are meaningless!
Example
During a taste test of 4 mineral water: Mum was ranked number.... 1. Pani number. 2. Fresh number....... 3. Spa number ...4.
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Ordinal
involves data arranged in some order, but the differences between data values cannot be determined or are meaningless!
Example
You are asked to rate the instructor of the course BBA 122
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Rating Frequency Superior-----------------------------------6 Good--------------------------------------26 Average------------------------------------8 Poor----------------------------------------7 Inferior------------------------------------3
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Ordinal
We can only conclude that a rating of good is better than a rating of poor. We can not conclude how much better than the rating is. Data categories are mutually exclusive and exhaustive Data categories are ranked or ordered according to the particular trait they possess.
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Interval
similar to the Ordinal Level, with the additional property that meaningful amounts of differences between data values can be determined.
There is no natural zero point
Example
Temperature on the Celsius scale.
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Interval
Data categories are mutually exclusive and exhaustive
Data categories are scaled according to the amount of the characteristics they possess. Equal differences in the characteristics are represented by equal differences in the numbers assigned to the categories
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Ratio
the Interval Level with an inherent zero starting point.
Differences and ratios are meaningful
for this level of measurement.
Examples
Monthly income
of surgeons
Distance
travelled by manufacturers representatives per month
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Ratio
Data categories are mutually exclusive and exhaustive
Data categories are scaled according to the amount of the characteristics they possess. Equal differences in the characteristics are represented by equal differences in the numbers assigned to the categories. The point 0 reflects the absence of the characteristic.
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Summary of the Characteristics for Levels of Measurement
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Limitations of statistics
1. Statistics is not suitable to the study of qualitative phenomenon
2. Statistics does not study individuals 3. Statistical laws are not exact 4. Statistics table may be misused 5. Statistics is only, one of the methods of studying a problem
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Benjamin Disraeli said
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There are three kinds of lies
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Figures dont lie.
Liars figure!
Caution
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Caution
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As you begin to study statistical methods, you are cautioned to take what you see published as statistical facts with a healthy grain of skepticism!
an average may not be representative of all the data
graphs can also be misleading
be sure to study the sampling methods
For Example
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Caution
Review the following three slides and notice the effect that the different scales have on your interpretation of the pattern between Crime and Unemployment Rates.
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Chart A
3200 3000
1986 - 1999
2800 2600 2400 2200 2000 0 1 2 3 4 5 6 7 8 9 10 11 12
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Chart B
3000 2500
1986 -1999
2000 1500 1000 500 0 7 8 9 10 11 12
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Chart C
3200 3000
1986 -1999
2800 2600 2400 2200 2000 7 8 9 10 11 12
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1986 -1999
Chart A Chart B Chart C
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This completes Chapter 1.
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