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Statistics w3

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4 views

Statistics w3

Uploaded by

Gunjan Choudhary
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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STATISTICS I

Methods to describe statistical data


Numerical representation
Pradeep Guin
([email protected])
B.A. (H) Economics, Statistics I (STAT-1004), Fall 2022
September 27 & 29, 2022 Jindal School of Government and Public Policy
O.P. Jindal Global (Institution of Eminence Deemed to be University)
Discussion points
2

¨ Numerical representation
¤ Measures of central tendency
¤ Measures of dispersion

¤ Measures of skewness

¨ Any other matter?


Measures of central tendency
3

¨ Summary statistics; single value describes the ‘centre


point’ (where most values of a distribution fall) of a
dataset
¨ Central position of a dataset?
¨ Measures of central location
¨ Mean, median and mode are three most valid
measures of central tendency
¨ Data type determines which measure is most
appropriate
Mean (average)
4

¨ Most commonly used form of central tendency


¨ Three types: arithmetic, geometric, harmonic
¨ Arithmetic mean: The value obtained by dividing
sum of values by number of values
¨ Denoted by 𝑥̅ (x-bar)
¨ Assume there are 5 numbers, then arithmetic mean
¤ 𝑥̅ = (𝑥! + 𝑥" + 𝑥# + 𝑥$ + 𝑥% )/5 = ∑ 𝑥 /𝑛
¨ For grouped data, arithmetic mean
¤ 𝑥̅ = ∑(&'! 𝑓& ∗ 𝑥& / ∑(&'! 𝑓&
Mean (average)…contd.
5

¨ Refer to “example-data-w2.2.xlsx” file


¤ Compute mean for simple and grouped data
¤ In simple data, if value for each observation is increased by 2.5,
what is the new arithmetic mean?
¤ In grouped data, what happens to the arithmetic mean if the
frequency of each class is increased by 2?
¨ The mean monthly wage of five employees is ₹46,000.
What is the wage of 5th employee if wages for remaining
four employees are ₹10,000, ₹25,000, ₹50,000 and
₹45,000?
¤ What does this result imply?
n Implication of extreme values
n Extremes values as outliers
Mean (average)…contd.
6

¨ Weighted arithmetic mean


¤ Certain values have greater weight (w)
∑ !! ∗$!
¤ 𝑥̅! = ∑ !!
n When weights add to 1: multiply each weight by corresponding value and
sum all of it
¤ Similar to the mean of grouped data
¤ Helps in making decisions: which one is better?
n e.g., you plan to buy a car. You are trying to decide between car A and car
B based on three dimensions: engine type (45%), design (25%), safety
features (30%)
n You rate Car A: 8 (out of 10) for engine type, 5 for design, and 7 for safety
feature
n You rate Car B: 6 (engine type), 7 (design), and 8 (safety feature)
n Which car would you end up buying? [Your answer]
n e.g., your final grades? Class participation (10%), individual assignment
(20%), group-assignment (20%), final take home (50%)
¤ Impact of outliers?
Mean (average)…contd.
7

¨ Geometric mean (GM) for a set of n +ve values


¤ 𝐺= !
𝑥" ∗ 𝑥# ∗ ⋯ ∗ 𝑥$ = (𝑥" ∗ 𝑥# ∗ ⋯ ∗ 𝑥$ )"/$
¤ Computation based on higher roots difficult
"
¤ log 𝐺 = $ ∑ 𝑙𝑜𝑔𝑥&
¤ 𝐺 = 𝑎𝑛𝑡𝑖𝑙𝑜𝑔 (log 𝐺)
¨ GM for grouped data
¤ If 𝑥", 𝑥#, … , 𝑥' are the class intervals with 𝑓", 𝑓#, … , 𝑓' as corresponding frequencies,
where 𝑛 = ∑'&(" 𝑓&
¤ 𝐺= !
𝑥"𝑓! … . 𝑥' 𝑓 " = (𝑥"𝑓! … . 𝑥' 𝑓 " )"/$
"
¤ log 𝐺 = $ ∑ 𝑓𝑖𝑙𝑜𝑔𝑥&
¨ Typically used when values change exponentially or in case of skewed distribution
(can you think of one?)
¨ GM of 5, 8, 17, and 9 [no base information is given, assume it 10: Your answer]
¨ GM of 0, 1, 4, 2, 8 [Your answer]
Mean (average)…contd.
8

¨ Harmonic mean (HM) of a set of n values (x1, x2,…, xn) is the reciprocal of
the average of the reciprocals
¨ HM = * *) *
+*
% + %⋯+
, )
¨ Weighted HM
¤ If 𝑥! , 𝑥" , … , 𝑥# are the class intervals with 𝑓! , 𝑓" , … , 𝑓# as corresponding
frequencies, where 𝑛 = ∑#$%! 𝑓$
¤ HM = ∑ $∑(&/())
$!

¨ HM is useful while looking at questions related to rate


¤ You travel 10 km at 50 km/h, next 10 km at 60km/h, final 10 km at 30km/h.
What is your average speed? [Your answer]
¤ Good when there are large outliers
n AM vs. HM for 2, 6, 10, 200
¨ When all non-zero numbers are same: AM = GM = HM
¨ What if they are not same? [Your answer]
Median
9

¨ Middle value
¨ Splits the dataset in half
¨ For odd number of observations, median is the middle
(center-most) value, obtained after arranging the dataset in
an order
¨ For even number of observations, median is the average of
two centre-most values
¨ Outliers and skewed data have small effect on median
¤ e.g., income data
¨ In symmetrical distribution, mean and median almost overlap
¨ In skewed data, mean is typically pulled away from the
centre, more towards the longer tail
Mode
10

¨ Most frequently occurring value in the dataset


¨ Mode is the highest bar in a bar chart
¨ There can be more than one mode in a distribution
¤ Bimodal
¤ Multimodal

¨ Used with categorical, ordinal and discrete data


¨ Unlikely in a continuous data
¨ Ordinal data: median or mode

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