Chap10-Sources of data

Wednesday, 18 May, 2022 12:04 AM

Types of data
Data may be classified as follows:
A) Primary and secondary data
B) Discrete and continuous data
C) Sample and population data

Primary and secondary data

Primary data are data collected especially for a specific purpose. Raw data are primary data which have
not been processed at all and which are still just a list of numbers.

Secondary data are data which have already been collected elsewhere, for some other purpose, but
which can be used or adopted for the survey being conducted.

Discrete and Continuous data

Discrete data are data which can only take on a finite or countable number of values within a given
range. Example: 1,2,3,4

Continuous data are data which can take on any value. They are measured rather than counted.
Example: 1.542, 1.639, 1.492

Sample and population data

Sample data are data arising as a result of investigating a sample. A sample is a selection from the
population.

Population data are data arising as a result of investigating the population. A population is the group of
people or objects of interest to the data collector.

Sources of data
Data may be obtained from an internal sources or an external sources.

Internal source of data

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The Accounting records : The records of sales ledger and purchase ledger, general ledgers and cost
ledgers provide a history of an organization's business. Some of these data is of great value outside
the accounts department, for example sales data for the marketing function.

Other internal sources :

• Data relating to personnel which linked to the payroll system.

• Much data will be produced by a production department about machine capacity, fuel
consumption, movement of people, materials, and work in progress, set up times, maintenance
requirements and so on.

• Many service business need to keep detailed records of the time spent on various activities,
both to justify fees to clients and assess the efficiency of operations.

External source of data

An organization's files are full of invoices, letters, emails, advertisements and so on received from
customers and suppliers and these documents provide data from an external sources.

Secondary data
Secondary data are data which have already been collected elsewhere, for some other purpose, but
which can be used or adopted for the survey being conducted. It is essential that there is good reason
to believe that the secondary data used is accurate and reliable.

The main sources of secondary data are governments, banks, newspapers, trade journals, other
sources, internet, economic environment etc.

Advantages of secondary data: They are cheaply available.

Disadvantage of secondary data: Since the investigator did not collect the data, they are therefore
unaware of any limitations of the data.

Sources of secondary data

Government: Monthly statistics are also published by many government departments. For example:
Details of retail prices, employment, unemployment, unfilled job vacancies, population data etc.

Banks: The banks of England issues a quarterly magazine which includes data on banks in the UK, the
money supply and government borrowing and financial transactions.

Financial newspaper: It contains detailed business data and information. Example: Financial Times,
The Wall Street Journal, The Singapore Business Times etc.

Such newspaper provide data on foreign exchange rates, interest rates, gilts and other share prices.

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Trade journals: Most industries are served by one or more trade journals. Journals contain data on
new developments in the industry, articles about competitor's products, details of industry costs and
prices so on.

Other sources:

• Advice or information bureaux: They provide information in the form of advice, information
leaflets or fact sheet.

• Consultancies: They include specialist market research companies which provide data on
specific industries.

• Specific reference works: Different business have different business works or so-called "bibles"
which are always used as a point of reference.

• Libraries and information services. Most countries have free public library system and also in
educational institutes and business organizations may provide library services through
membership.

• Electronic sources: These include local and national radio, tv etc.

Internet: The internet is a global network connecting millions of computers and mobile phones. It
allows to send and receive information through internet connected mobiles or computers.

Economic environment: It affects firms at national and international level, both in the general level
and of economic activity and in particular variables, such as exchange rates, interest rates and
inflations. The economic environment is an important influence at local and national level.

Examples: Overall growth or fall in domestic products, Local economic trends, Inflation, interest rates,
Tax levels, Government spending, Business cycle.

Big data
Big Data refers to the mass of data that society creates each year, extending far beyond the
traditional financial and enterprise data created by companies.

Sources of Big Data include social networking sites, internet search engines, and mobile devices.

Three Vs of Big Data

The main characteristics of Big Data are volume, velocity and variety.

Volume:
The scale of information which can now be created and stored is staggering. Mobile devices have led
to an increasingly networked world where people's consumer preferences, spending habits and even
their movements can be recorded.

Advances in data storage technology as well as a fall in price of this storage has allowed for the
captured data to be stored for further analysis

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Velocity:
Timeliness is a key factor in the usefulness of financial information to decision makers. One source of
high velocity of data is Twitter.

Variety:
Big data consist of both structured and unstructured data.

Structured data: Quantitative data.

Unstructured data: Images, videos, audio files etc.

Uses of Big Data

It involves the collection and analysis of large amount of data to find trends, understand customer
needs and help organizations to focus resources more effectively and to make decisions.

The key role of big data is to analyze all the relevant information and to generate a predictive model
of what the outcome of the decision will be.

• Big Data and Business value: Business value is measured in many ways such as profits,
shareholder value, brand value and intellectual value. Big Data can be used to analyse
opportunities to increase revenue and reduce costs thereby increasing profit.

• Big Data and customer: Understanding the customer is a key benefit of Big Data analytics. By
understanding the customers, the business can respond to their needs.

• Big Data and Corporate strategy: Big Data is a key source of innovation, helping to create new
products and services. This means that Big data can help create new sources of income for
business and contribute to an improvement in the organisation's competitive advantage.

Benefits of Big Data analytics

• Examine large quantities of data to identify trends and correlations very quickly.

• Improve organisational decision making.

• Greater focus on the individual customers to entice repeat business.

• Improved data about customers and internal operations helps to reduce costs.

Criticisms of Big Data

• Security and data protection: To store and protect vast amount of personal information is
difficult and comes with great risk.

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 • Privacy: Customers are not consented to data about them being captured and stored.

• Personnel issues: The availability of suitably qualified employees to capture, maintain and
analyse Big Data may be difficult and expensive.

• Information: Just because information can be collected doesn't mean that it has to be collected
because our valuable time can be wasted collecting data that as no value to the organisation.

Sampling
Data are often collected from a sample rather than from a population. If the whole population is
examined, the survey is called a census. In such situation were it is not possible to survey the whole
population, a sample is selected.

Disadvantages of census
• The high cost of census may exceed the value of the results obtained.
• It might be out of date by the time you complete it.

Advantages of sample
• It can be shown mathematically that once a certain sample size has been reached, very little
accuracy is gained by examining more items.
• The larger the size of the sample, the more accurate the results.

➢ One of the main important requirements of sample data is that they should be complete.
That is, the data should cover all areas of the population to be examined.

Sampling Methods
Probability sampling method

A probability sampling method is a sampling method in which there is a known chance of each
member of the population appearing in the sample.

Random sampling

A simple random sample is a sample selected in such a way that every item in the population
has an equal chance of being included. A random sample is not necessarily a perfect sample.

Sampling frame:
If random sampling is used then it is necessary to construct sampling frame. A sampling frame
is a numbered list of all items in a population. Example: 0,1, 2, 3,….

Sometimes it is not possible to draw up a sampling frame. Example: Random sample of

Americans.

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Sampling frame should have the following characteristics:

▪ Completeness
▪ Accuracy
▪ Adequacy
▪ Up to date
▪ Convenience
▪ Non-duplication

Drawbacks of random sampling:

- Selected items are subject to full range of variation inherent in the population.
- An unrepresentative sample may result.
- An adequate sampling frame might not exist.
- The numbering of the population may take time and effort.
- It might be difficult to obtain the data if the selected items cover a wide area.
- It might be costly to obtain the data if the selected items cover a wide area.

Stratified random sampling

Stratified random sampling is a method of sampling which involves dividing the population into
strata or categories. Random samples are then taken from each stratum or category.

Advantages of stratification:
• The sample selected will be representative since it will have every elements in the final
sample.
• The structure of the sample will reflect that of the population if same proportion of
individuals is chosen.
• Inferences can be made about each stratum as each stratum is represented by randomly
chosen sample.
• Precision or exactness is increased.

Disadvantages of stratification:
• It requires prior knowledge of each item in the population.

Systematic sampling

Systematic sampling is a sampling method which works by selecting every nth item after a
random start.

Example: If it were decided to select a sample of 20 from a population of 800, then every 40th
(800/20) item after a random start in the first 40 should be selected.

Advantages:
▪ It is easy to use
▪ It is cheap

Disadvantages:
▪ It is possible that a biased sample might be chosen if there is a regular pattern.
▪ It is not completely random since some items have a zero chance of being selected.

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Multistage sampling

• Multistage sampling is a probability sampling method which involves dividing the

population into a number of sub-populations.
• Then selecting a small sample of these sub-populations at random.
• Each sub-population is then divided further, and then a small sample is again selected at
random.
• This process is repeated as many times as is necessary.

Example: A survey of spending habits is being planned to cover the whole of the UK. It is
obviously impractical to draw up a sampling frame, so random sampling is not possible.
Multistage sampling is to be used instead.

Advantages:
▪ Fewer investigators are needed.
▪ It is not so costly to obtain a sample.

Disadvantages:
▪ There is the possibility of bias if only a small number of regions are selected.
▪ The method is not truly random, as once the final sampling areas have been selected the
rest of the population cannot be in the sample.

Cluster sampling

Cluster sampling is a non-random sampling method that involves selecting one definable
subsection of the population as the sample.

Example: The pupils of one school might be taken as a cluster sample of all children at school in one
country.

Advantages:
▪ It is a good alternative to multistage sampling if a satisfactory sampling frame does not exist.
▪ It is inexpensive to operate.

Disadvantage:
▪ There is potential for considerable bias.

Non-probability sampling methods

A Non probability sampling method is a sampling method in which the chance of each member
of the population appearing in the sample is not known, for example quota sampling.

Quota sampling

In quota sampling, randomness is forfeited in the interests of cheapness and administrative simplicity.
Investigators are told to interview all the people they meet up to a certain quota.

For example, an interviewer in a shopping centre may fill the quota by only meeting people who can go

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For example, an interviewer in a shopping centre may fill the quota by only meeting people who can go
shopping during the week.

Advantages:
▪ It is cheap and administratively easy.
▪ A much larger sample can be studied.
▪ No sampling frame is necessary.
▪ It may be the only possible approach in certain situations.
▪ Quota sampling yields enough accurate information

Disadvantage:
▪ The method can result in certain biases
▪ The non-random nature of the method rules out any valid estimate of the sampling in estimates
derived from the sample.

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