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Ch01 (Data and Statistics) Final

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Ch01 (Data and Statistics) Final

Uploaded by

eaint thu
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Slides Prepared by

JOHN S. LOUCKS
St. Edward’s University
Chapter 1:Data and Statistics

• What is Statistics?
• Applications in Business and Economics
• Data
• Data Sources
• Descriptive Statistics
• Statistical Inference
Statistics
What is statistics?
Statistics is the science of collecting,
organizing, analyzing and interpreting data
in order to make a decision.
There are two main branches of statistics:
 Descriptive Statistics

 Inferential Statistics
Descriptive statistics

Descriptive statistics are numbers that are used


to summarize and describe data.

Inferential statistics

Inferential statistics is a technique used to draw


conclusion about a population by testing the data
taken from the sample of that population.
Applications in
Business and Economics
• Accounting
Public accounting firms use statistical sampling procedures
when conducting audits for their clients.
• Finance
Financial advisors use a variety of statistical information,
including price-earnings ratios and dividend yields, to guide
their investment recommendations.
• Marketing
Electronic point-of-sale scanners at retail checkout counters
are being used to collect data for a variety of marketing
research applications.
Applications in
Business and Economics
• Production
A variety of statistical quality control charts are used to
monitor the output of a production process.
• Economics
Economists use statistical information in making forecasts
about the future of the economy or some aspect of it.
Data
• Elements, Variables, and Observations
• Scales of Measurement
• Qualitative and Quantitative Data
• Cross-Sectional and Time Series Data
Data and Data Sets

• Data are the facts and figures that are collected,


summarized, analyzed, and interpreted.
• The data collected in a particular study are referred to as the
data set.
Elements, Variables, and Observations

• 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.
Data, Data Sets,
Elements, Variables, and Observations
Observation
Variables
Stock Annual Earn/
Company Exchange Sales($M) Sh.($)
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

Elements Data Set Datum


TYPES OF
DATA
In statistics, data are classified into two
categories:
•Quantitative data

•Qualitative data
Quantitative data: based on number.
(Ages, length, high, weight,…)
Qualitative data: based on categorical.

(Gender, blood types, colours,…)


Scales of Measurement

• Scales of measurement include:


• Nominal
• Ordinal
• Interval
• Ratio
• The scale determines the amount of information contained
in the data.
• The scale indicates the data summarization and statistical
analyses that are most appropriate.
Scales of Measurement
• Nominal
• Data are labels or names used to identify an attribute of
the element.
• A nonnumeric label or a numeric code may be used.
Scales of Measurement

• Nominal
• Example:
Students of a university are classified by the school in
which they are enrolled using a nonnumeric label such
as Business, Humanities, Education, and so on.

Alternatively, a numeric code could be used for the


school variable (e.g. 1 denotes Business, 2 denotes
Humanities, 3 denotes Education, and so on).
Scales of Measurement
• Ordinal
• The data have the properties of nominal data and the
order or rank of the data is meaningful.
• A nonnumeric label or a numeric code may be used.
Scales of Measurement

• Ordinal
• Example:
Students of a university are classified by their class
standing using a nonnumeric label such as Freshman,
Sophomore, Junior, or Senior.

Alternatively, a numeric code could be used for the


class standing variable (e.g. 1 denotes Freshman, 2
denotes Sophomore, and so on).
Scales of Measurement

• Interval
• The data have the properties of ordinal data and the
interval between observations is expressed in terms of a
fixed unit of measure.
• Interval data are always numeric.
Scales of Measurement

• Interval
• Example:
Melissa has an SAT score of 1205, while Kevin has an
SAT score of 1090. Melissa scored 115 points more
than Kevin.
Scales of Measurement
• Ratio
• The data have all the properties of interval data and the
ratio of two values is meaningful.
• Variables such as distance, height, weight, and time use
the ratio scale.
• This scale must contain a zero value that indicates that
nothing exists for the variable at the zero point.
Scales of Measurement

• Ratio
• Example:
Melissa’s college record shows 36 credit hours earned,
while Kevin’s record shows 72 credit hours earned.
Kevin has twice as many credit hours earned as
Melissa.
Qualitative Data

• Qualitative data are labels or names used to identify an


attribute of each element.
• Qualitative data use either the nominal or ordinal scale of
measurement.
• Qualitative data can be either numeric or nonnumeric.
• The statistical analysis for qualitative data are rather limited.
Qualitative and Quantitative Data

• Data can be further classified as being qualitative or


quantitative.
• The statistical analysis that is appropriate depends on
whether the data for the variable are qualitative or
quantitative.
• In general, there are more alternatives for statistical
analysis when the data are quantitative.
Quantitative Data

• Quantitative data indicate either how many or how much.


• Quantitative data that measure how many are discrete.
• Quantitative data that measure how much are continuous
because there is no separation between the possible
values for the data..
• Quantitative data are always numeric.
• Ordinary arithmetic operations are meaningful only with
quantitative data.
DATA SOURCES
Data sources could be seen as of two types:

(i) Primary data

(interviews; e.g, face-to-face, telephone ,

e-mail,…)

(ii) Secondary data

(e.g, data originally collected by someone else)


Cross-Sectional and Time Series Data

• Cross-sectional data are collected at the same or


approximately the same point in time.
• Example: data detailing the number of building
permits issued in June 2000 in each of the counties of
Texas
• Time series data are collected over several time periods.
• Example: data detailing the number of building
permits issued in Travis County, Texas in each of the
last 36 months
Data Sources
• Existing Sources
• Data needed for a particular application might already
exist within a firm. Detailed information is often kept on
customers, suppliers, and employees for example.
• Substantial amounts of business and economic data are
available from organizations that specialize in collecting
and maintaining data.
Data Sources

• Existing Sources
• Government agencies are another important source of
data.
• Data are also available from a variety of industry
associations and special-interest organizations.
Data Sources

• Internet
• The Internet has become an important source of data.
• Most government agencies, like the Bureau of the Census
(www.census.gov), make their data available through a
web site.
• More and more companies are creating web sites and
providing public access to them.
• A number of companies now specialize in making
information available over the Internet.
Data Sources
• Statistical Studies
• Statistical studies can be classified as either experimental
or observational.
• In experimental studies the variables of interest are first
identified. Then one or more factors are controlled so
that data can be obtained about how the factors
influence the variables.
• In observational (nonexperimental) studies no attempt is
made to control or influence the variables of interest.
• A survey is perhaps the most common type of
observational study.
Data Acquisition Considerations
• Time Requirement
• Searching for information can be time consuming.
• Information might no longer be useful by the time it is
available.
• Cost of Acquisition
• Organizations often charge for information even when it
is not their primary business activity.
• Data Errors
• Using any data that happens to be available or that were
acquired with little care can lead to poor and misleading
information.
Descriptive Statistics

• Descriptive statistics are the tabular, graphical, and


numerical methods used to summarize data.
Example: Hudson Auto Repair
The manager of Hudson Auto would like to have
a better understanding of the cost of parts used in the
engine tune-ups performed in the shop. She examines
50 customer invoices for tune-ups. The costs of parts,
rounded to the nearest dollar, are listed below.

91 78 93 57 75 52 99 80 97 62
71 69 72 89 66 75 79 75 72 76
104 74 62 68 97 105 77 65 80 109
85 97 88 68 83 68 71 69 67 74
62 82 98 101 79 105 79 69 62 73
Example: Hudson Auto Repair
• Tabular Summary (Frequencies and Percent Frequencies)

Parts Percent
Cost ($) Frequency Frequency
50-59 2 4
60-69 13 26
70-79 16 32
80-89 7 14
90-99 7 14
100-109 5 10
Total 50 100
Example: Hudson Auto Repair
• Graphical Summary (Histogram)

18
16
14
Frequency

12
10
8
6
4
2
Parts
50 60 70 80 90 100 110 Cost ($)
Example: Hudson Auto Repair

• Numerical Descriptive Statistics


• The most common numerical descriptive statistic is the
average (or mean).
• Hudson’s average cost of parts, based on the 50 tune-ups
studied, is $79 (found by summing the 50 cost values and
then dividing by 50).
Statistical Inference

 Statistical inference is the process of using data obtained


from a small group of elements (the sample) to make
estimates and test hypotheses about the characteristics
of a larger group of elements (the population).
Example: Hudson Auto Repair
• Process of Statistical Inference

1. Population
consists of all 2. A sample of 50
tune-ups. Average engine tune-ups
cost of parts is is examined.
unknown.

4. The value of the 3. The sample data


sample average is used provide a sample
to make an estimate of average cost of
the population average. $79 per tune-up.
End of Chapter 1

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