Introduction to Statistics

What is Statistics?

-Science of gathering, analyzing, interpreting, and presenting data

-Branch of mathematics
-Course of study
-Facts and figures
-Measurement taken on a sample
Definitions
“Statistics is a science of estimates and probabilities”

“Statistics are numerical statement of facts in any department of

enquiry placed in relation to each other.”

“Statistics may be defined as the collection, presentation, anlaysis and

interpretation of numerical data.”
Role/functions of Statistics
• Summarization
• Comparison
• Forecasting
• Estimation
• Tests of Hypothesis
Statistics in Business

•Accounting — auditing and cost estimation

•Economics — regional, national, and international economic performance
•Finance — investments and portfolio management
•Management — human resources, compensation, and quality
management
•Management Information Systems — performance of systems which
gather, summarize, and disseminate information to various managerial
levels
•Marketing — market analysis and consumer research
•International Business — market and demographic analysis
Population Versus Sample
Population — the whole
• a collection of persons, objects, or items under study
•Sample — a portion of the whole
• a subset of the population
Population
Population and Census Data
Identifier Color MPG

RD1 Red 12
RD2 Red 10
RD3 Red 13
RD4 Red 10
RD5 Red 13
BL1 Blue 27
BL2 Blue 24
GR1 Green 35
GR2 Green 35
GY1 Gray 15
GY2 Gray 18
GY3 Gray 17
Sample and Sample Data
Identifier Color MPG

RD2 Red 10

RD5 Red 13

GR1 Green 35

GY2 Gray 18
Descriptive vs. Inferential Statistics

• Descriptive Statistics — using data gathered on a group to describe or

reach conclusions about that same group (population) only

• Inferential Statistics — using sample data to reach conclusions about

the population from which the sample was taken
What is Data?
Definition: Facts or figures, which are numerical or otherwise,
collected with a definite purpose are called data.
Everyday we come across a lot of information in the form of facts,
numerical figures, tables, graphs, etc.
These are provided by newspapers, televisions, magazines and other
means of communication.
These may relate to cricket batting or bowling averages, profits of a
company, temperatures of cities, expenditures in various sectors of a five
year plan, polling results, and so on.
These facts or figures, which are numerical or otherwise, collected with a
definite purpose are called data.
Levels of Data Measurement

1. Nominal — Lowest level of measurement

2. Ordinal
3. Interval
4. Ratio — Highest level of measurement
Nominal Level Data
• Numbers are used to classify or categorize
Example: Employment Classification
• 1 for Educator
• 2 for Construction Worker
• 3 for Manufacturing Worker
Example: Ethnicity
• 1 for African-American
• 2 for Anglo-American
• 3 for Hispanic-American
Ordinal Level Data
•Numbers are used to indicate rank or order
• Relative magnitude of numbers is meaningful
• Differences between numbers are not comparable

Example: Ranking productivity of employees

Example: Taste test ranking of three brands of soft drink
Example: Position within an organization
• 1 for President
• 2 for Vice President
• 3 for Plant Manager
• 4 for Department Supervisor
• 5 for Employee
Example of Ordinal Measurement

1 f
6 i
2 n
4 i
s
3
5 h
Ordinal Data

Faculty and staff should receive preferential

treatment for parking space.

Strongly Agree Neutral Disagree Strongly

Agree Disagree

1 2 3 4 5
Interval Level Data

• Distances between consecutive numbers have

meaning and the data are always numerical.
• Relative magnitude of numbers is meaningful
• Differences between numbers are comparable
• Zero is just another point on scale and does not mean
the absence of Value.
Example: Fahrenheit Temperature
Example: Calendar Time
Example: Percentage return on stock.
Ratio Level Data
• Highest level of measurement
• Relative magnitude of numbers is meaningful
• Differences between numbers are comparable
• Zero value in data represents the absence of the characteristic being
studied.
Examples: Height, Weight, and Volume
Example: Monetary Variables, such as Profit and Loss, Revenues, and
Expenses
Example: Financial ratios, such as P/E Ratio, Inventory Turnover, and
Quick Ratio.
Usage Potential of Various
Levels of Data
Ratio
Interval
Ordinal

Nominal
Data Level, Operations, and Statistical Methods

Statistical
Data Level Meaningful Operations
Methods

Nominal Classifying and Counting Nonparametric

Ordinal All of the above plus Ranking Nonparametric

Interval All of the above plus Addition, Parametric

Subtraction, Multiplication, and
Division

Ratio All of the above Parametric

Types of Variables

• In statistics and research, variables are items that you can measure,
modify, and control.
• In research, variables are the factors that are manipulated to measure
their effects on an outcome variable.
• A variable is any characteristic of an individual, group, organization or
social phenomenon that changes.
• A variable is something which varies and can have more than one
value.
• A Variable is attribute or characteristic of an entity.
• Example of Variable
• 1- Suppose lets take organization as an example. Organization is an
entity. Name, Size, Type, Learning, Innovation are the attributes of an
organization. So all these attributes are the variables.
• 2- Other example is that Employee is also an entity. Name, Age,
Gender, Experience, Stress level, satisfaction, Performance are the
attributes of an employee. So all these attributes are the variables.
Researchers classify variables into several categories, the most
popular of which are,

• Independent variable
• Dependent variable
• Moderating variable
• Extraneous variable
• Discrete Variable
• Continuous Variable
• Extraneous Variable
Independent variable

• The variable that is manipulated to measure its effects on an outcome

variable.
• The independent variable is the factor that the researcher purposely
change or control in order to see what effect it has.
• The variable which causes affect on dependent variable.
• It is also called predictor or explanatory variable.
• Example of Independent Variable
• The amount of sugar, added to each cup of orange juice.
Dependent Variable

• The dependent variable is a variable that represents the experiment’s

outcome. The variable that is measured in order to determine the effect
of an independent variable. The dependent variable is the variable
being measured.
• It is affected by the change in Independent variable.
• It is also called criterion or outcome variable.
• Example of Dependent Variable
• Any measurement, of human health, and growth.
Moderating Variable

• A moderating variable, also known as a moderator variable, modifies the link

between dependent and independent factors by strengthening or diminishing the
effect of the mediating variable.
• Moderating variables are those that moderate or change the relationship between
the independent and dependent variable.
• It is the variable that effects the relationship between independent variable and
dependent variable.
• This variable either weaken or strengthen the relationship of IV and DV.
• Example of Mediating Variable
• While social media use can predict isolation, this association may be higher in teens
than in older persons. Age is a moderator here.
Discrete Variable

• Any numerical variables, you can realistically count. Discrete variables

are those that can only take on a limited number of values. In
research, discrete variables are often used to represent categorical
data, such as gender or race. Discrete variables are often represented
by integers.
• Example of Discrete Variable
• 1- As an example, consider the money in your pocket or the funds in
your savings account.
Continuous Variable

• A continuous variable is a variable that can take on any value within a certain range. In
research, a continuous variable is often used to measure things like opinion or behavior.
• Continuous variables are important because they allow researchers to get more
detailed information about a population.
• Continuous variables are also useful for measuring change over time.
• Example of Continuous Variable
• 1- If researchers want to know how people feel about a new product, they can use a
continuous variable to measure how much people like the product on a scale of 1 to 10.
• 2- If researchers want to know whether people’s opinions about a product are
changing, they can use a continuous variable to measure how people’s opinions change
from month to month.
Extraneous Variable

• Extraneous variables are factors that affect the dependent variable but were
not originally considered by the researcher while designing the experiment.
These unexpected variables can alter the outcomes of a study or how a
researcher perceives the results.
• Example of Extraneous Variable
• A study could be conducted to determine if private tutoring or online courses
are more helpful at improving students’ Spanish test scores. Parental support,
prior understanding of a foreign language, or socioeconomic background are
examples of extraneous elements that may unintentionally influence the
outcome.