MTH 206: Probability and Statistics

Lecture 01
Dr. Shahid Hussain
MTH-206 Probability and Statistics
Recommended Books:
1. Probability and Statistics for
Engineers and Scientists (9th Edition),
By Ronald E. Walpole, Raymond H. Myers, Sharon L.
Myers, Keying E. Ye

2. INTRODUCTORY STATISTICS
By: PREM S. MANN

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 Course Objective
To introduce the Engineering students, the fundamentals
of probability and statistics with application to daily life
and engineering discipline-related problems primarily
chosen from areas of computer networks, communication,
signal processing, control, estimation, reliability and
engineering decision making. The course will emphasize
equipping students with the basic tools required to build
and analyze probabilities models in the context of
electrical engineering. They will also understand the
prediction and estimations method for various quantities
that commonly appear in science and engineering
disciplines using statistical inference principles.

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 Course Out Line
Basic probability concepts, conditional probability,
Bayes' theorem, Random variable, probability
density function, cumulative distribution function,
Specific random variable discrete as well as
continuous, Moments and moment generating
function, Law of large numbers, Basic statistical
concepts, samples and sampling distributions,
Parameter estimation, hypothesis testing and
curve fitting

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CHAPTER 1:

INTRODUCTION
 WHAT IS STATISTICS?
 Definition
 Statistics is a group of methods used to

collect, analyze, present, and interpret data

and to make decisions.

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WHAT IS STATISTICS?
Statistics is the Collection,
Presentation, Analysis, and
Utilization of Numerical data to
make Inference and reach Decision
in the face of Uncertainty in
Business, Economics and other
Social and Natural Sciences.
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TYPES OF STATISTICS

Statistics

DESCRIPTIVE INFERENTIAL
STATISTICS STATISTICS

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 TYPES OF STATISTICS
 Definition
 Descriptive Statistics consists of methods

for organizing, displaying, and describing

data by using tables, graphs, and summary
measures.

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 TYPES OF STATISTICS
 Definition
 Inferential Statistics consists of methods

that use sample results to help make

decisions or predictions about a population.

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 POPULATION VERSUS
SAMPLE
 Definition
 A population consists of all elements –

individuals, items, or objects – whose

characteristics are being studied. The
population that is being studied is also
called the target population.

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 POPULATION VERSUS
SAMPLE cont.
 Definition
 A portion of the population selected for

study is referred to as a sample.

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Figure 1.1 Population and sample.

Population
Sample

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 POPULATION VERSUS
SAMPLE cont.
 Definition
 A survey that includes every number of

the population is called a census. The

technique of collecting information from a
portion of the population is called a
sample survey.

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 POPULATION VERSUS
SAMPLE cont.
 Definition
 A sample that represents the

characteristics of the population as closely

as possible is called a representative
sample.

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 POPULATION VERSUS
SAMPLE cont.
 Definition
 A sample drawn in such a way that each

element of the population has a chance of

being selected is called a random
sample. If the chance of being selected is
the same for each element of the
population, it is called a simple random
sample.
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 Introduction to Basic Terms

 Population:
A collection, or set, of individuals or objects or events whose properties are to be
analyzed
 Sample:
A subset of a population.
 Variable:
A characteristic of interest about each individual element of a population or sample.
 Data:
The value of variable of the variable associated with one element of a population or sample.
 Experiment:
A planned activity whose results yield a set of data.
 Parameter & Statistic:
A numerical value summarizing all the data of an entire population is called parameter and
a numerical value summarizing all the data of an entire sample is called statistic. 17
 BASIC TERMS
Table 1.1 2001 Sales of Seven U.S. Companies

2001 Sales Variable

Company (millions of dollars)
Wal-Mart Stores 217,799
IBM 85,866
An element or An observation
a member General Motors 177,260 or measurement
Dell Computer 31,168
Procter & Gamble 39,262
JC Penney 32,004
Home Depot 53,553 18
 BASIC TERMS cont.
 Definition
 An element or member of a sample or

population is a specific subject or object (for

example, a person, firm, item, state, or
country) about which the information is
collected.

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 BASIC TERMS cont.
 Definition
 A variable is a characteristic under study

that assumes different values for different

elements. In contrast to a variable, the
value of a constant is fixed.

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 BASIC TERMS cont.
 Definition
 The value of a variable for an element is

called an observation or measurement.

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 BASIC TERMS cont.
 Definition
 A data set is a collection of observations

on one or more variables.

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 The Meaning of Data:

Data

Quantitative Data Qualitative Data

A Variable that Quantifies A variable that describes or
An element of a population Categorizes an element of a population
 EXAMPLES OF DATA

Data are collected in many aspects of everyday life.

Statements given to a police officer or physician or

psychologist during an interview are data.

So are the correct and incorrect answers given by a student

on a final examination.

 Almost any athletic event produces data.

 The time required by a runner to complete a marathon,

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 EXAMPLES OF DATA

 The number of errors committed by a baseball team in nine

innings of play.

 And, of course, data are obtained in the course of scientific

inquiry:

 The positions of artifacts and fossils in an archaeological site,

The number of interactions between two members of an

animal colony during a period of observation,

 The spectral composition of light emitted by a star. 25

Collection of Data

Data

Primary Data
Data that have been originally
Secondary Data
collected (raw data) and have Data that have undergone any
not undergone any sort sort of treatment by statistical
of statistical treatment, methods at least ONCE

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 COLLECTION OF PRIMARY DATA:

One or more of the following methods are

employed to collect primary data:
1) Direct Personal Investigation.
2) Indirect Investigation.
3) Collection through Questionnaires.
4) Collection through Enumerators.
5) Collection through Local Sources

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 COLLECTION OF SECONDARY DATA:

The secondary data may be obtained from the following sources:

i) Official, e.g. the publications of the Statistical Division,
Ministry of Finance, the Federal and Provincial Bureaus of
Statistics, Ministries of Food, Agriculture, Industry, Labour,
etc.
ii) Semi-Official, e.g., State Bank of Pakistan, Railway Board,
Central Cotton Committee, Boards of Economic Inquiry,
District Councils, Municipalities, etc.
iii) Publications of Trade Associations, Chambers of Commerce,
etc.
iv) Technical and Trade Journals and Newspapers.
v) Research Organizations such as universities, and other
institutions.

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 TYPES OF VARIABLES
 Quantitative Variables
 Discrete Variables
 Continuous Variables
 Qualitative or Categorical Variables

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 Quantitative Variables
 Definition
 A variable that can be measured

numerically is called a quantitative

variable. The data collected on a
quantitative variable are called
quantitative data.

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 OBSERVATIONS AND VARIABLES:

In statistics, an observation often means any sort of numerical recording

of information, whether it is a physical measurement such as height or
weight; a classification such as heads or tails, or an answer to a question
such as yes or no.

Variable
A characteristic that varies with an individual or
an object, is called a variable

Quantitative
A characteristic which can be expressed numerically
such as age, weight, income or number of children
Is called Quantitative variable

Qualitative
A characteristic which can be expressed
non-numerically such as education, eye colour,
quality, intelligence, poverty, Satisfaction, etc Is
called Quantitative variable or attribute
 Quantitative Variables cont.
 Definition
 A variable whose values are countable is

called a discrete variable. In other words,

a discrete variable can assume only certain
values with no intermediate values.

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 Quantitative Variables cont.
 Definition
 A variable that can assume any numerical

value over a certain interval or intervals is

called a continuous variable.

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 Qualitative or Categorical
Variables
 Definition
 A variable that cannot assume a numerical

value but can be classified into two or more

nonnumeric categories is called a
qualitative or categorical variable. The
data collected on such a variable are called
qualitative data.

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Types of Variable, Attributes
Variable

Quantitative, or Numerical

Discrete Variable
A quantitative variable that can assume a
countable number of values

Continuous Variable
A quantitative variable that can assume an
uncountable number of values

Qualitative, or Attributes

Nominal Variable
A qualitative variable that categorizes( or describes,
or names) an element of population

Ordinal Variable
A qualitative variable that incorporates an ordered
Position, or ranking.
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 Figure 1.2 Types of variables.

Variable

Quantitative Qualitative or
categorical (e.g.,
make of a computer,
hair color, gender)
Discrete (e.g., Continuous
number of (e.g., length,
houses, cars, age, height,
accidents) weight, time)

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CROSS-SECTION VERSUS
TIME-SERIES DATA
 Cross-Section Data
 Time-Series Data

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 Cross-Section Data
 Definition
 Data collected on different elements at the

same point in time or for the same period of

time are called cross-section data.

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Table 1.2 2002 Net Worth of Six Persons

2002 Net Worth

Name (billions of dollars)
Bill Gates 43.0
Warren Buffett 36.0
Helen Walton 18.8
George Lucas 3.0
Ted Turner 2.2
Ralph Lauren 2.0
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 Time-Series Data
 Definition
 Data collected on the same element for the

same variable at different points in time or for

different periods of time are called time-
series data.

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 Table 1.3 Price of a 30-Second TV Commercial
During Super Bowl Telecast

Price of a 30-Seconf TV Commercial

Year Super Bowl (million dollars)
1993 XXVII .85
1994 XXVIII .90
1995 XXIX 1.00
1996 XXX 1.10
1997 XXXI 1.20
1998 XXXII 1.30
1999 XXXIII 1.60
2000 XXXIV 2.10
2001 XXXV 2.05
2002 XXXVI 1.90
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2003 XXXVII 2.20
 SUMMATION NOTATION
 Example 1-1
 Annual salaries (in thousands of dollars) of
four workers are 75, 42, 125, and 61. Find
a) ∑x
b) (∑x)²
c) ∑x²

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 Solution 1-1
a) ∑x = x1 + x2 + x3 + x4
= 75 + 42 + 125 + 61
= 303 = $303,000
b) (∑x)² = (303)² = 91,809
c) ∑x² = (75)² + (42)² + (125)² + (61)²
= 5625 + 1764 + 15,625 + 3721
= 26,735

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 Example 1-2
The following table lists four pairs of m and f values:
m 12 15 20 30

f 5 9 10 16

Compute the following:

a) Σm
b) Σf²
c) Σmf
d) Σm²f

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 Solution 2-1
Table 1.4
m f f² mf m²f
12 x 12 x 5 = 720
12 5 5 x 5 = 25 12 x 5 = 60
15 x 15 x 9 =
15 9 9 x 9 = 81 15 x 9 = 135
2025
20 10 10 x 10 = 100 20 x 10 = 200
20 x 20 x 10 = 4000
30 16 16 x 16 = 256 30 x 16 = 480
30 x 30 x 16 = 14,400
∑m = 77 ∑f = 40 ∑f² = 462 ∑mf = 875 ∑m²f = 21,145

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