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Unit 3_Statistical Measures

The document provides an introduction to statistics, emphasizing its role in understanding variability and making informed decisions based on data. It outlines three key reasons to study statistics: to be informed, to make informed judgments, and to evaluate decisions affecting one's life. Additionally, it covers measures of central tendency, including mean, median, and mode, as well as concepts of covariance and correlation.

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manisha Narwane
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19 views

Unit 3_Statistical Measures

The document provides an introduction to statistics, emphasizing its role in understanding variability and making informed decisions based on data. It outlines three key reasons to study statistics: to be informed, to make informed judgments, and to evaluate decisions affecting one's life. Additionally, it covers measures of central tendency, including mean, median, and mode, as well as concepts of covariance and correlation.

Uploaded by

manisha Narwane
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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Statistical Measures

Unit 3
Introduction to Statistics

● Statistics is about understanding the role that variability plays in


drawing conclusions based on data.
● Statistics is a science whose focus is on collecting, analyzing, and
drawing conclusions from data.
Three Reasons to Study Statistics

The First Reason: Being Informed


1. Extract information from tables, charts, and graphs.
2. Follow numerical arguments.
3. Understand the basics of how data should
be gathered, summarized, and analyzed
to draw statistical conclusions.
Three Reasons to Study Statistics

The Second Reason: Making Informed Judgments


1. Decide whether existing information is adequate or whether
additional information is required.
2. If necessary, collect more information in a reasonable and
thoughtful way.
3. Summarize the available data in a useful and informative
manner.
4. Analyze the available data.
5. Draw conclusions, make decisions, and assess the risk of an
incorrect decision.
Three Reasons to Study Statistics

The Third Reason: Evaluating Decisions That Affect Your Life


1. An understanding of statistical techniques will allow you to question and
evaluate decisions that affect your well-being.
2. For example Medical researchers, Insurance companies.
Frequency Distribution
Measure of Central Tendency

1. Arithmetic Mean or Mean


2. Median
3. Mode
4. Geometric Mean
5. Harmonic Mean.
1. Arithmetic Mean or Mean
Merits and Demerits of Arithmetic Mean

Merits
● It is rigidly defined.
● It is easy to understand and easy to calculate.
● It is based upon all the observations.
● Of all the averages, arithmetic mean is affected least by fluctuations of
sampling. This property is sometimes described by saying that
arithmetic mean is, a stable average.
Merits and Demerits of Arithmetic Mean

Demerits
● It cannot be determined by inspection nor it can be located graphically.
● Arithmetic mean cannot be used if we are dealing with qualitative characteristics
which cannot be measured quantitatively; such as, intelligence, honesty, beauty,
etc. In such cases median (discussed later) is the only average to be used.
● Arithmetic mean cannot be obtained if a single observation is missing or lost or is
illegible unless we drop it out and compute the arithmetic mean of the remaining
values.
● Arithmetic mean is affected very much by extreme values. In case of extreme
items, arithmetic mean gives a distorted picture of the distribution and no longer
remains representative of the distribution
2.Median
Merits and Demerits of Median

Merits:
● It is rigidly defined.
● It is easily understood and is easy to calculate. In some cases it can be located
merely by inspection.
● It is not at all affected by extreme values.
Demerits:
● In case of even number of observations median cannot be determined exactly.
We merely estimate it by taking the mean of two middle terms.
● It is not based on all the observations.
● As compared with mean, it is affected much by fluctuations of sampling.
3.Mode
Dispersion
Covariance
Covariance is a measure of the relationship between two random variables and to what extent, they change together. Or we
can say, in other words, it defines the changes between the two variables, such that change in one variable is equal to
change in another variable. This is the property of a function of maintaining its form when the variables are linearly
transformed. Covariance is measured in units, which are calculated by multiplying the units of the two variables.

Positive Covariance:
If the covariance for any two variables is positive, that means, both the variables move in the same direction. Here, the
variables show similar behaviour. That means, if the values (greater or lesser) of one variable corresponds to the values of
another variable, then they are said to be in positive covariance.
Negative Covariance:
If the covariance for any two variables is negative, that means, both the variables move in the opposite direction. It is the
opposite case of positive covariance, where greater values of one variable correspond to lesser values of another variable
and vice-versa.
Correlation
Correlation refers to a process for establishing the relationships between two variables.

The correlation coefficient is usually represented using the symbol r, and it ranges from -1 to +1.

A correlation coefficient quite close to 0, but either positive or negative, implies little or no relationship between the two
variables. A correlation coefficient close to plus 1 means a positive relationship between the two variables, with increases in
one of the variables being associated with increases in the other variable.

A correlation coefficient close to -1 indicates a negative relationship between two variables, with an increase in one of the
variables being associated with a decrease in the other variable.

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