Introduction To Statistics

Why study statistics?

1. Data are everywhere

2. Statistical techniques are used to make many
decisions that affect our lives
3. No matter what your career, you will make
professional decisions that involve data. An
understanding of statistical methods will help you
make these decisions efectively
Applications of statistical concepts in the
business world

Finance – correlation and regression, index

numbers, time series analysis
Marketing – hypothesis testing, chi-square
tests, nonparametric statistics
Personel – hypothesis testing, chi-square
tests, nonparametric tests
Operating management – hypothesis testing,
estimation, analysis of variance, time series
analysis
Statistics
The science of collecting, organizing,
presenting, analyzing, and interpreting data
to assist in making more effective decisions
Statistical analysis – used to manipulate
summarize, and investigate data, so that
useful decision-making information results.
Statistical data
The collection of data that are relevant to the problem
being studied is commonly the most difficult, expensive,
and time-consuming part of the entire research project.
Statistical data are usually obtained by counting or
measuring items.
 Primary data are collected specifically for the analysis
desired
 Secondary data have already been compiled and are
available for statistical analysis
A variable is an item of interest that can take on many
different numerical values.
A constant has a fixed numerical value.
Data
Statistical data are usually obtained by counting or
measuring items. Most data can be put into the
following categories:
Qualitative - data are measurements that each fail
into one of several categories. (hair color, ethnic
groups and other attributes of the population)
Quantitative - data are observations that are
measured on a numerical scale (distance traveled
to college, number of children in a family, etc.)
Qualitative data
Qualitative data are generally described by words or
letters. They are not as widely used as quantitative data
because many numerical techniques do not apply to the
qualitative data. For example, it does not make sense to
find an average hair color or blood type.
Qualitative data can be separated into two subgroups:
dichotomic (if it takes the form of a word with two
options (gender - male or female)
polynomic (if it takes the form of a word with more than
two options (education - primary school, secondary school
and university).
Quantitative data
Quantitative data are always numbers and are the
result of counting or measuring attributes of a
population.
Quantitative data can be separated into two
subgroups:
discrete (if it is the result of counting (the number of
students of a given ethnic group in a class, the
number of books on a shelf, ...)
continuous (if it is the result of measuring (distance
traveled, weight of luggage, …)
 Types of variables
Variables

Qualitative Quantitative

Dichotomic Polynomic Discrete Continuous

Children in family, Amount of income

Gender, marital Brand of Pc, hair
Strokes on a golf tax paid, weight of a
status color
hole student
 Numerical scale of measurement:
 Nominal – consist of categories in each of which the number of
respective observations is recorded. The categories are in no logical
order and have no particular relationship. The categories are said to be
mutually exclusive since an individual, object, or measurement can be
included in only one of them.
 Ordinal – contain more information. Consists of distinct categories in
which order is implied. Values in one category are larger or smaller than
values in other categories (e.g. rating-excelent, good, fair, poor)
 Interval – is a set of numerical measurements in which the distance
between numbers is of a known, sonstant size.
 Ratio – consists of numerical measurements where the distance between
numbers is of a known, constant size, in addition, there is a nonarbitrary
zero point.
Numerical presentation of qualitative
data
pivot table (qualitative dichotomic
statistical attributes)
contingency table (qualitative statistical
attributes from which at least one of them is
polynomic)

You should know how to convert absolute

values to relative ones (%).
Charts and graphs
Frequency distributions are good ways to
present the essential aspects of data
collections in concise and understable terms
Pictures are always more effective in
displaying large data collections
Histogram
Frequently used to graphically present
interval and ratio data
Is often used for interval and ratio data
The adjacent bars (meaning, bars have no
gaps) indicate that a numerical range is
being summarized by indicating the
frequencies in arbitrarily chosen classes
Frequency polygon
Another common method for graphically
presenting interval and ratio data
To construct a frequency polygon mark the
frequencies on the vertical axis and the values
of the variable being measured on the
horizontal axis, as with the histogram.
If the purpose of presenting is comparation
with other distributions, the frequency
polygon provides a good summary of the data
Ogive
A graph of a cumulative frequency distribution
Ogive is used when one wants to determine how
many observations lie above or below a certain
value in a distribution.
First cumulative frequency distribution is
constructed
Cumulative frequencies are plotted at the upper
class limit of each category
Ogive can also be constructed for a relative
frequency distribution.
Pie Chart
The pie chart is an effective way of
displaying the percentage breakdown of data
by category.
Useful if the relative sizes of the data
components are to be emphasized
Pie charts also provide an effective way of
presenting ratio- or interval-scaled data after
they have been organized into categories
Pie Chart
Bar chart
Another common method for graphically
presenting nominal and ordinal scaled data
One bar is used to represent the frequency for each
category
The bars are usually positioned vertically with their
bases located on the horizontal axis of the graph
The bars are separated, and this is why such a
graph is frequently used for nominal and ordinal
data – the separation emphasize the plotting of
frequencies for distinct categories
Time Series Graph
The time series graph is a graph of data that
have been measured over time.
The horizontal axis of this graph represents
time periods and the vertical axis shows the
numerical values corresponding to these
time periods
Types of statistics
Descriptive statistics – Methods of organizing,
summarizing, and presenting data in an informative
way
Inferential statistics – The methods used to determine
something about a population on the basis of a sample
 Population –The entire set of individuals or objects
of interest or the measurements obtained from all
individuals or objects of interest
 Sample – A portion, or part, of the population of
interest
 Inferential Statistics

Estimation
e.g., Estimate the population
mean weight using the
sample mean weight
Hypothesis testing
e.g., Test the claim that the
population mean weight is 70
kg
Inference is the process of drawing conclusions or making decisions about a
population based on sample results
Sampling
a sample should have the same characteristics
as the population it is representing.
Sampling can be:
with replacement: a member of the
population may be chosen more than once
(picking the candy from the bowl)
 without replacement: a member of the
population may be chosen only once (lottery
ticket)
 Sampling methods
Sampling methods can be:
random (each member of the population has an equal
chance of being selected)
nonrandom (each member of the population don’t have
an equal chance of being selected)

The actual process of sampling causes sampling errors.

For example, the sample may not be large enough or
representative of the population. Factors not related to
the sampling process cause nonsampling errors. A
defective counting device can cause a nonsampling
error.
Random sampling methods
simple random sample (each sample of the same
size has an equal chance of being selected)
stratified sample (divide the population into groups
called strata and then take a sample from each
stratum)
cluster sample (divide the population into strata and
then randomly select some of the strata. All the
members from these strata are in the cluster sample.)
systematic sample (randomly select a starting point
and take every n-th piece of data from a listing of the
population)
 Descriptive Statistics

Collect data
e.g., Survey

Present data
e.g., Tables and graphs

Summarize data
e.g., Sample mean = X i

n
Credits to:

Prof. Ing. Zlata Sojková, CSc.

[email protected]
Ing. Jozef Palkovič, PhD.
[email protected]
 Recommended literature:
 Hanke E. J, Reitsch A. G: Understanding Business Statistics
 Anderson, D.R. - Sweeney, D.J. - Williams, T.A.: Statistics for
Business and Economics. South-Western Pub., 2005, 320 p.,
ISBN 978-032-422-486-3
 Jaisingh, L.R.: Statistics for the Utterly Confused. McGraw Hill,
2005, 352 p., ISBN 978-007-146-193-1
 Everitt, B. S.: The Cambridge (explanatory) dictionary of
statistics. Cambridge University Press, 2006, 442 p., ISBN 978-
052-169-027-0
 Illowsky, B. - Dean, S. (2009, August 5). Collaborative Statistics.
Retrieved from the Connexions Web site:
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Moodle course by Martina Majorova at:

http://moodle.uniag.sk/fem/course/view.php?id=211