Unit 1 (10 Sessions): Descriptive Statistics Meaning, Scope, types, functions and limitations of statistics, Measures of Central tendency — Mean, Median, Mode, Quartiles, Measures of Dispersion — Range, Inter quartile range, Mean deviation, Standard devin, Vee eS a Meaning of Statistics e Everyday we come across a lot of information in the form of facts, numerical figures, tables, graphs, etc e profits of a company, temperatures of cities, expenditures in various sectors of a five year plan, polling results, and so on. e Analysis of figures/numbers for forecasting or drawing inferences. Statistics - HTS e Studying Numbers Meaning of Statistics Derived from e Latin word - Status e Italian word - Stato e@ German - Statistik Meaning of All was Political State/Science e In its origin, statistics was simply the collection of data on different aspects of the life of people, useful to the State. Like age, land record ete.Meaning of Statistics Statistics is the discipline that concerns the e collection, e organization, e analysis, e interpretation, and presentation of data. Meaning of Statistics e Statistics includes quantitative analysis i.e, variables that can be measured in numbers like Height, Age, (not honest, Intelligence - Qualitative variables) Statistical Data are only those which are e Aggregate (many not individual) e Average (Ram Age and average age of students of MBA) e Comparable (Number of MBA in India and in US) Definition of Statistics According to Webster e Statistics are the facts representing the condition of the people in a state...especially those facts which can be stated in numbers or in tables of numbers or any tabular or classified arrangements” Dr. A.L. Bowley e Statistics may rightly called the science of averages e Statistics is the device for abbreviating and classifying the statements and making clear relations, Prof. A L Boddington e Statistics is the science of estimates and probabilitiesAccording to Prof. M G Kendall e Statistics is the branch of scientific method which deals with data obtained by counting or measuring properties of populations of natural phenomenon Characteristics of Statistics ] Aggregates of facts Affected by many causes Numerically expressed is Enumerated or estimated accurately Collected in a systematic manner Collected for a predetermined purpose Comparable or capable of being placed in relation to each other Nature of Statistics Statistics is science as well as an art. primary features of science are: e Itis a systematic study of any subject e It takes a fact and tries to establish the relationship between cause and effect e Also, the laws of science are universal in nature Statistics has all these qualities Statistics has systematic study of knowledge, consists various laws and principles like : law of statistical regularity, probability theory and these are universal.Nature of Statistics Statistics is science as well as an art. e@ Art means the use of best possible method to obtain the given target, e Art is using science to solve problems e Statistics helps in problem solving e Provide better understanding and solution to real life problems Scope of Statistics As a Statistical Method Collection of Data (Primary and Secondary) Organisation of Data (Tables, Charts, Graphs) Presentation Analysis (Central Tendency, Regression, Correlation, etc.) Interpretation Forecasting Scope of Statistics Application e Statistical methods are applicable in all diversified fields such as economics, trade, industry, commerce, agriculture, bio-sciences, physical _ sciences, educations, astronomy, insurance, accountancy and auditing, sociology, psychology, meteorology, and so on.Types of Statistics Descriptive Statistics e It consists of procedures used to summarize and describe the characteristics of a set of data. e@ summarize a given data set, which can be either a representation of the entire population or a sample of a population. According to R P Hooda Descriptive statistics deals with collecting, summarising and simplifying data which are otherwise are too complicated such that no meaningful conclusions can be drawn from the data. Thus it comprises of methods of highlighting the latent characteristics present in a set of mass numerical data. Types of Statistics Methods Example e Graphical / Pictorial Methods e Measure of Central Tendency o Mean, Median, Mode e Measure of Dispersion o Range, Variance, Skewness, Standard Deviation, Kurtosis,Types of Statistics Inferential Statistics e facilitate estimating the characteristic of a population or making decisions concerning a population on the basis of sample results. e Used to make generalisation about the population or universe on the basis of study of samples According to R P Hooda e Inferential statistics may be defined as the body of methods of capable of making generalisation about the population parameters on the basis of sample statistics Methods like : Hypothesis Testing, Regression Analysis, ANOVA, T-test, Chi Square etc. Function of Statistics To Simplify Complex Data To provide Comparative Study To Study relationship between different facts To measure the effect To Make Decisions To ForecastLimitation of Statistics e Studies only quantitative Facts, does not study qualitative facts e Study of Aggregate , does not study individuals e Homogeneity and uniformity in data is must e Results can be misleading if quoted without context e Results are only approximately correct Pu Ba collection, analysis, Pee ue RUT leeTypes of Statistics Two types of statistical methods are used in analyzing data: descriptive statistics and ineesiic || Sela om Descriptive statistics summarize the lr lela Ceti e(e) Coa Inferential statistics allow you to test a hypothesis or assess whether your data is generalizable to the broader population. Functions of Resse 1) Statistics helps in__providing a Yass understa accurate description of nature, i 2) Statistics helps in the proper_and_efficient planning of a statistical inquiry in any field of study. 3) Statistics helps in collecting appropriate quantitative data. limitations of statistics ) 1. Statistics (eTitile) 4 be applied to heterogeneous data. Meee em uM hae el . Laws are not exact . Results are true only on average Me EUV Au uc Ons OC hae un oe edMeaning of Central tendency * Central tendency is a descriptive summary of a dataset through a single value that reflects) Pec mu rich liseli e Measures of Central tendency — Mean, Median and Mode WT = Mean is the most common measure of central tendency. Mean can be defined for all ratio-scale and interval- scale data. To calculate the mean, aN eel CMe OL Col LLL) together. Next, divide the sum 10) however many numbers you added. The result is your mean or average score. Median is the middle number of any Eee gC a eee eles) ascending (i.e. lowest to highest) or 1,3, 3,6, 7, 8,9 descending (i.e. highest to lowest) order. If the series is odd, then the median is exactly the middle number. Pe eM Aan Sta SL is the average of the middle two numbers. Median is defined for ordinal data too, along with interval- scale or ratio-scale data. Median = 6Mode MBCA Ou MMe mi ewes COR UIs eMac merece Cla (Un iccMaat-Munt=te lta) and mean, the mode is about the frequency of occurrence. There can be more than one mode or no mode at all; it all depends on the data set itself. 4, 3, 7, 8, 4, 5, 12, 4, 5, 3, 2,and 3 2, 3, 3, 3, 4, 4,45, 5, 7, 8, 12 Et PYRE L) In statistics, dispersion is the extent to which a distribution is stretched or squeezed. Common examples of measures of statistical dispersion are the variance, standard deviation, and_ interquartile range. For Tate alecMn dale tATeM Cec Aoi Cla Bs large, the data is widely scattered * Measures of Dispersion -¢ Range, ter quartile relax ee CCM leeks Ure tn Nera CM eC aie MUO) tendency measurements. A range is the most common and easily Pre Seer MCE MOL ea I CCU Dee Un eR a ar ee gee X min are the two extreme observations then Celt > eeHere, x, and f, are respectively th hare socu cls ae Formula © = population standard ceviaticn H = population mean measure of the relative points in a data seriesSMI] efecto cL LL given distribution from the normal distribution, which is symmetrical on both sides. A given distribution can be either be skewed to the left or the right. Skewness risk occurs when a symmetric distribution is applied to the skewed data. symmetric Distribution Frequency Positive Skew. Negative Kurtosis Normal Distribution+ Dispersion shows the difference between * Skewness gives the idea about the direction mean and actual value. 5 of variation. * In business and economic analysis measures * With the help of skewness, we know that the of dispersion have more practical than deviation from the average is weather measures of skewness. positive or negative. * Dispersion can test the reliability of an + Measures of skewness tell about the degree average. of concentration. + Compare two or more sets of data with + It gives an idea about the nature of variation. respect to their variability & Control the variability. + Skewness Indicates lack of symmetry in + Kurtosis is a measure of the distribution. tailedness/Peakedness of a distribution. + Positive skewness has a long right tail. + Positive Kurtosis indicates more peakedness and have longer tails. (Laptocurtic) + Negative skewness has a long left tail. | + Negative Kurtosis indicates less : peakedness and have shorter tails. (Platykurtic) + Asymmetrical distribution has a + When distribution has a normal curve it skewness of zero. indicates Mesokurtic distribution. es gees hot Chart Seams bets 4 oe oe eh eh gyn aT)Types of skewness No skewness Symmetrical curve Positively skewed Right Skewed feesvety stewed) Left Skewed Types of skewness — ~ Mean — Median — Mode Positi Negatively skewed Left Skewed ‘Types of skewness No skewness ‘Symmetrical curve Positively skewed Right Skewed Negatively skewed Left SkewedSkewness (faqqat) faa oT art an & aw feirg & Sal aw orate & faa a 8 | Skewness is a measure of the asymmetry or symmetry of a data distribution. A distribution, or data set, is symmetric if it looks the same to the left and right of the center point. ed uw Symmetrical curve Kurtosis (asa) apa or ol ap & Fata a auewT aa | Kurtosis is the characteristic of being flat or peaked. Kurtosis is a measure of whether the data are heavy-tailed or light- tailed relative to a normal distribution. Normal curve Kurtosis (Se) awa or ord aw & qata a aclu BB | Kurtosis is the characteristic of being flat or peaked. Kurtosis is a measure of whether the data are heavy-tailed or light- tailed relative to a normal distribution. Ku= Sh . Normal curve Poo Pio Percentile coefficient of Kurtosis wade hsUnit II (8 Sessions):Time Series & Index Number Time series analysis: Concept, Additive and Multiplicative models, Components of time series, ‘Trend analysis: Least Square method - Linear and Non- Linear equations, Applications in business decision-making. Index Numbers:- Meaning , Types of index numbers, uses of index numbers, Construction of Price, Quantity and Volume indices:- Fixed base and Chain base methods. Time Series e a set of numerical values of some variable obtained at regular period over time. e The series is usually tabulated or graphed in a manner that readily conveys the behaviour of the variable under study. a series of data points indexed (or listed or graphed) in time order. (Chronological arrangement of data) Component of Time Series Trend e a steady tendency of either upward or downward movement in the average (or mean) value of the forecast variable over time. e@ When observations are plotted against time, a straight line describes the increase or decrease in the time series over a period of time. Cycles An upward and downward movement in the variable value about the trend time over a time period © A business cycle may vary in length; usually more than a year but less than 5 to 7 years. ‘© The movement is through four phases: from peak (prosperity) to contradiction (recession) to trough (depression) to expansion (recovery or growth) om i Jt JuulComponent of Time Series Seasonal - e aspecial case of a cycle component of time series e fluctuations are repeated usually within a year (e.g. daily, weekly, monthly, quarterly) with a high degree of regularity. a e patterns tend to be repeated from year to year. e For example, average sales for a retail store may increase greatly during festival seasons. Irregular e are rapid charges or bleeps in the data caused by short term unanticipated and non-recurring factors. e Irregular fluctuations can happen as often as day to day. a | eU » Application/ Use e To Predict Future e Used to identify Slumientians in economic and business An. tre? e Helps in evaluation of current achievements e Used in pattern recognitions, | weather forecasting, rainfall measurements etc. e Used in sales forecastingMultiplicative Model e The actual values of a time series, Y can be found by multiplying four components at a particular time period. e The effect of four components on the time series is interdependent. e Y=TxCxS x 1 <— Multiplicative model e The multiplicative model is appropriate in situations where the effect of C, S, and I is measured in relative sense and is not in absolute sense. e The geometric mean of C,S, and I is assumed to be less than one. Additive Model e In this model, it is assumed that the effect of| various components can be estimated by adding the various components of a time-series. e Y=T+C+S+1< Additive model e Here C, S, and J are absolute quantities and can have positive or negative values. Index Numbers:/ Meaning * A number used to indicate change in magnitude (as of cost or price) as compared me un melanism erie Ma usually taken as 100.Types of index numbers, Wl Price Index Number: It measures the general changes in prices of goods. It compares the level of pricg between two different time periods. 2. Quantity Index Number: It measures changes in the level of output or physical volume of production in economy. Eg: changes in agricultural and industrial production etc. over time. Itis also called volumesindex number. 3, Value Index Number: The value of a commodity is the product of its price and quantity (p x q). Value index number measures changes in the value of a variable in terms of rupee. It is more informative index as it ‘combines both, changes in the price as well as quantity. 4, Special Purpose Index Number: They are constructed with some specific purpose. Eg: importexport index numbers, labour productivity index numbers, share price index numbers etc.Time series analysis: Concept Time series analysis is a specific way of PE fd A analyzing a sequence of data points collected over an interval of time. In time series analysis, analysts_record data points at eo 019 intervals over a set period of time rather than CUS CRIES ASCE just recording the data points i i or ROU USCOL Components of time series me series can be decomposed he trend (long term related movements) and the _ irregular (unsystematic, short term fluctuations). Time Series Additive * Additive models analysis is a new method that treats time-series modeling as a curve- fitting problem with respect to time. In contrast, exponential smoothing and ARIMA try model the dependencies of the current data with the past(inclusive of expected values and errors)Multiplicative models a description of the effect of two or more Peace outs Weliels(n cis allows for interaction effects among the reyes ere) mT SSeS OL additive model, which sums the individual effects of several predictors on an outcome. ‘Additive Seosonality uliplicative Seasonality 2009 2010 2011 2012 2013 2014 1950 1952 1954 1956. 19581960 Year Year Multiplicative models PMG scot Ce No i A CMLL yc E CL) Reel LSS variable tha PN CMR MME oct eo predictors. This_is_in contrast _to_an additive Bee) cl Stine eee ae) eteets of feb eee Ree