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QUANTITATIVE TECHNIQUES
Notes
Section A: Multiple-Choice Questions
1. Types of Data
o Qualitative vs. Quantitative Data
o Discrete vs. Continuous Data
o Levels of Measurement (Nominal, Ordinal, Interval, Ratio)
2. Data Collection and Quality
o Primary Data
o Characteristics of Primary Data
Section A: Matching Definitions
1. Statistical Concepts
o Inferential Statistics
o Descriptive Statistics
o Population
o Statistic
o Experimentation
o Data
o Data Enrichment
o Random Variable
o Sample
o Parameter
o Sampling Unit
Section B: Measures of Central Tendency and Dispersion
1. Central Tendency
o Mean
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o Median
o Mode
o Quartiles
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2. Dispersion
o Range
o Standard Deviation
o Variance
o Coefficient of Variation
o Interquartile Range
o Quartile Deviation
Section C: Probability
1. Probability Calculations
o Probability Tree
o Contingency Tables
o Basic Probability
o Independent and Non-Mutually Exclusive Events
o Conditional Probability
2. Probability Distributions
o Binomial Distribution
o Normal Distribution
o Poisson Distribution
3. Hypothesis Testing
o Standard Error
o Significance Levels
Section D: Index Numbers
1. Price Indexes
o Price Relatives
o Laspeyres Price Index
o Paasche Price Index
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o Paasche Quantity Index
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Formulas
1. Measures of Central Tendency
o Mean
o Median
o Mode
2. Measures of Dispersion
o Range
o Standard Deviation
o Variance
o Coefficient of Variation
o Interquartile Range
o Quartile Deviation
3. Probability Distributions
o Binomial Probability
o Poisson Probability
o Normal Distribution
4. Linear Regression and Correlation
o Regression Line Equation
o Slope and Intercept Calculation
o Correlation Coefficient
5. Hypothesis Testing
o Z-Score
o T-Score
o Chi-Square
6. Index Numbers
o Price Relative
o Laspeyres Price Index
o Paasche Price Index
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Section A: Multiple-Choice Questions
1. Types of Data
Qualitative vs. Quantitative Data
• Qualitative Data: This type of data describes attributes or characteristics that cannot be measured numerically. It's
often represented using labels or names rather than numbers.
o Example: Consider a survey that asks respondents about their favourite type of cuisine. The responses might
be Italian, Chinese, Mexican, and Indian. These are categories that describe the qualitative aspect of
preferences.
o Another Example: If you conduct an interview and ask participants about their opinions on a new product,
their responses (e.g., "I love it," "It's okay," "I don't like it") are qualitative data because they describe feelings
and attitudes.
• Quantitative Data: This type of data represents quantities and can be measured numerically. It includes data such as
height, weight, age, and number of items. Quantitative data can be further divided into discrete and continuous data.
o Example: Measuring the height of students in a class. The heights (e.g., 150 cm, 162 cm, 170 cm) are
quantitative because they represent measurable quantities.
o Another Example: Counting the number of books on a shelf. If you have 25 books, this number is quantitative
data because it represents a countable quantity.
Discrete vs. Continuous Data
• Discrete Data: Discrete data can take on only specific, distinct values. These values are countable and often whole
numbers.
o Example: The number of students in a classroom. If there are 30 students, you can only have whole numbers
(you cannot have 30.5 students).
o Another Example: The number of cars in a parking lot. If there are 15 cars, this is discrete data because it is a
countable number.
• Continuous Data: Continuous data can take on any value within a range. These values are measurable and can include
fractions and decimals.
o Example: The amount of milk in a bottle. If a bottle contains 1.5 litters of milk, this is continuous data because
the quantity can be measured and can take any value within a range.
o Another Example: The time it takes to run a marathon. If it takes 3 hours, 15 minutes, and 30 seconds, this is
continuous data because time can be measured in infinitely small units.
Levels of Measurement
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• Nominal Data: The simplest form of data, nominal data categorizes data without implying any order or rank among the
categories.
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o Example: Eye colour categories such as blue, brown, green, and hazel. These categories do not imply any order
or ranking.
o Another Example: Types of fruits like apple, banana, and orange. These categories are just labels without any
specific order.
• Ordinal Data: Ordinal data involves categories with an implied order or ranking. However, the intervals between the
categories are not necessarily equal.
o Example: Customer satisfaction ratings such as "Very Satisfied," "Satisfied," "Neutral," "Dissatisfied," and "Very
Dissatisfied." These categories imply an order but the difference between them is not quantifiable.
o Another Example: Education levels like "High School," "Bachelor's," "Master's," and "PhD." These levels are
ordered but the intervals between them are not equal.
• Interval Data: Interval data is numerical data with equal intervals between values but no true zero point. This means
you can measure the difference between values, but ratios are not meaningful.
o Example: Temperature in Celsius. The difference between 20°C and 30°C is the same as the difference
between 30°C and 40°C, but 0°C does not mean the absence of temperature.
o Another Example: IQ scores. The difference between scores is meaningful, but an IQ of 0 does not mean no
intelligence.
• Ratio Data: Ratio data has all the properties of interval data, but it also has a true zero point, allowing for the
calculation of meaningful ratios.
o Example: Height measured in centimetres. A height of 0 cm means no height, and a person who is 180 cm tall
is twice as tall as a person who is 90 cm tall.
o Another Example: Weight measured in kilograms. A weight of 0 kg means no weight, and a 60 kg object is
twice as heavy as a 30 kg object.
2. Data Collection and Quality
Primary Data
• Definition: Primary data is data collected directly from the source for a specific research purpose. It is original and
collected first-hand by the researcher.
o Example: Conducting a survey to gather opinions on a new product. If you personally collect responses from
participants, this is primary data because it is gathered directly for your specific study.
o Another Example: Observing and recording the behaviour of children in a classroom to study their interaction
patterns. This data is primary because it is collected directly by the researcher through observation.
• Characteristics of Primary Data:
o Time-Consuming: Collecting primary data often requires significant time and effort.
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▪ Example: Conducting face-to-face interviews with 100 participants might take several days or weeks.
o Expensive: It can be costly due to resources needed for data collection, such as hiring personnel or purchasing
equipment.
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▪ Example: Setting up and running a focus group may involve costs for participant incentives, venue
rental, and recording equipment.
o High Quality: Since it is collected directly from the source, primary data is typically reliable and relevant to the
research question.
▪ Example: Data collected through carefully designed experiments under controlled conditions ensures
high accuracy and relevance.
Section A: Definitions
1. Statistical Concepts
Inferential Statistics
• Definition: Inferential statistics involves making inferences about populations based on sample data. It allows
researchers to draw conclusions and make predictions about a population by analysing a sample taken from it.
• Example: If a sample of 200 students from a university is surveyed to determine their average study time per week,
inferential statistics can be used to estimate the average study time for all students at the university.
Descriptive Statistics
• Definition: Descriptive statistics involves summarizing and organizing data to describe the main features of a dataset.
This includes measures such as mean, median, mode, range, and standard deviation.
• Example: If you have test scores for a class of 30 students, descriptive statistics can help you calculate the average
score (mean), the middle score (median), the most frequent score (mode), and how spread out the scores are (range
and standard deviation).
Population
• Definition: A population is the complete set of all possible observations or measurements of interest in a particular
study.
• Example: In a study investigating the average height of adult women in South Africa, the population would include all
adult women in South Africa.
Statistic
• Definition: A statistic is a numerical value that describes a characteristic of a sample.
• Example: If you survey 100 employees in a company about their job satisfaction and find that the average satisfaction
score is 7.5, this value is a statistic because it describes the sample.
Experimentation
•
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Definition: Experimentation involves manipulating certain variables under controlled conditions to observe their effect
on other variables.
• Example: In a clinical trial, researchers might give one group of participants a new drug and another group a placebo to
see if the drug has a significant effect on reducing symptoms.
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Data
• Definition: Data consists of the actual values or outcomes recorded on a random variable.
• Example: In a survey measuring annual income, the recorded incomes of R40,000, R55,000, and R70,000 are data.
Data Enrichment
• Definition: Data enrichment refers to the process of transforming data into more meaningful measures by adding or
refining information.
• Example: Adding demographic information to a customer database to better understand purchasing patterns and tailor
marketing strategies.
Random Variable
• Definition: A random variable is the attribute of interest on which data is collected and analysed.
• Example: In a study measuring the number of books read by students in a month, the number of books is the random
variable.
Sample
• Definition: A sample is a subset of data values drawn from a population.
• Example: If a researcher selects 150 students from a university of 10,000 students to survey about their study habits,
those 150 students constitute the sample.
Parameter
• Definition: A parameter is a measure that describes a characteristic of a population.
• Example: If you could measure the exact average height of all adult women in South Africa, this value would be a
parameter because it describes the entire population.
Sampling Unit
• Definition: The sampling unit is the object being measured, counted, or observed with respect to the random variable
under study.
• Example: In a survey of households to determine average income, each household is a sampling unit.
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Section B: Measures of Central Tendency and Dispersion
1. Central Tendency
Mean
• Definition: The mean, often referred to as the average, is the sum of all the values in a dataset divided by the number
of values.
∑ 𝒙𝒊
• ̅=
Formula: 𝒙
𝒏
• Where is the mean, ∑ xi is the sum of all values, and n is the number of values.
• Example: If five students have test scores of 85, 90, 78, 92, and 88, the mean score is calculated as follows:
85 + 90 + 78 + 92 + 88 433
𝑥̅ = = = 86.6
5 5
The mean score is 86.6.
Median
• Definition: The median is the middle value in a dataset when the values are arranged in ascending or descending order.
If there is an even number of values, the median is the average of the two middle values.
• Example: For the dataset 78, 85, 88, 90, 92, the median is 88, as it is the middle value. If the dataset had an even
number of values, say 78, 85, 88, 90, 92, 95, the median would be the average of 88 and 90, which is 89.
Mode
• Definition: The mode is the value that appears most frequently in a dataset. A dataset may have one mode, more than
one mode, or no mode at all if no value repeats.
• Example: In the dataset 3, 4, 4, 5, 6, 6, 6, 7, the mode is 6, as it appears most frequently.
Quartiles
• Definition: Quartiles divide a dataset into four equal parts. The first quartile (Q1) is the median of the lower half of the
dataset, the second quartile (Q2) is the median of the dataset, and the third quartile (Q3) is the median of the upper
half.
• Example: For the dataset 10, 20, 30, 40, 50, 60, 70, 80, 90, 100:
o Q1 is the median of the lower half (10, 20, 30, 40, 50), which is 30.
o Q2 is the median of the entire dataset, which is 55.
o Q3 is the median of the upper half (60, 70, 80, 90, 100), which is 80.
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2. Dispersion
Range
• Definition: The range is the difference between the highest and lowest values in a dataset.
• Formula: 𝑅 = 𝑥𝑚𝑎𝑥 − 𝑥𝑚𝑖𝑛
o Where 𝑥𝑚𝑎𝑥 is the maximum value and 𝑥𝑚𝑖𝑛 is the minimum value.
• Example: For the dataset 12, 15, 20, 22, 30, the range is calculated as follows:
𝑅 = 30 − 12 = 18
• The range is 18.
Standard Deviation
• Definition: The standard deviation is a measure of the dispersion or spread of a dataset. It indicates how much the
values in the dataset deviate from the mean.
• Formula:
∑(𝑥𝑖 −𝜇)2
o Population Standard Deviation: 𝜎 = √
𝑁
∑(𝑥𝑖 −𝑥)2
o Sample Standard Deviation: 𝑠 = √
𝑛−1
o Where σ is the population standard deviation, s is the sample standard deviation, xi are the individual values, μ
is the population mean, x is the sample mean, N is the population size, and n is the sample size.
• Example: For the dataset 4, 8, 6, 5, 3, calculate the sample standard deviation:
4+8+6+5+3
𝑥̅ = = 5.2
5
Then, calculate each squared deviation from the mean and the variance:
∑(𝑥𝑖 − 𝑥̅ )2 = (4 − 5.2)2 + (8 − 5.2)2 + (6 − 5.2)2 + (5 − 5.2)2 + (3 − 5.2)2 = 1.4
The variance is:
14.8
= 3.7
4
The standard deviation is:
𝑠 = √3.7 ≈ 1.92
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Variance
• Definition: Variance is a measure of how much the values in a dataset deviate from the mean. It is the average of the
squared differences from the mean.
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• Formula:
∑(𝑥𝑖 −𝜇)2
o Population Variance: 𝜎 2 =
𝑁
2 ∑(𝑥𝑖 −𝑥)2
o Sample Variance: 𝑠 =
𝑛−1
• Example: Using the previous dataset 4, 8, 6, 5, 3, the sample variance was calculated as 3.7.
Coefficient of Variation
• Definition: The coefficient of variation (CV) is a standardized measure of dispersion of a probability distribution or
frequency distribution. It is expressed as a percentage and is the ratio of the standard deviation to the mean.
𝑠
• Formula: 𝐶𝑉 = × 100%
𝑥
o Where s is the standard deviation and x is the mean.
• Example: If a dataset has a mean of 50 and a standard deviation of 5, the CV is calculated as follows:
5
𝐶𝑉 = × 100% = 10%
50
The CV is 10%
Interquartile Range (IQR)
• Definition: The interquartile range is the difference between the third quartile (Q3) and the first quartile (Q1). It
measures the spread of the middle 50% of the data.
• Formula: 𝐼𝑄𝑅 = 𝑄3 − 𝑄1
• Example: For the dataset 10, 20, 30, 40, 50, 60, 70, 80, 90, 100, where Q1 is 30 and Q3 is 80:
𝐼𝑄𝑅 = 80 − 30 = 50
The IQR is 50
Quartile Deviation
• Definition: The quartile deviation, also known as the semi-interquartile range, is half of the interquartile range. It
measures the spread of the middle 50% of the data.
𝑄3−𝑄1
• Formula: 𝑄𝐷 =
2
• Example: Using the previous dataset where Q1 is 30 and Q3 is 80:
80 − 30 50
𝑄𝐷 = = = 25
2 2
The quartile deviation is 25.
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