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Chapter 1
The nature of probability
and statistics

Note: This PowerPoint is only a summary and

your main. source should be the book

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 Chapter Outline

• 1.1 Introduction
• 1.2 Descriptive and Inferential Statistics
• 1.3 Variables and Types of Data
• 1.4 Data Collection and Sampling Techniques
• 1.5 Observational and experimental Studies

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 Objectives
After completing this chapter, you should be able to:

LO1: Demonstrate knowledge of statistical terms.

LO2: Differentiate between the two branches of statistics:

Descriptive and inferential

LO3: Identify types of Variables

LO4: Identify the measurement level for each variable.

LO5: Identify the four basic sampling techniques.

LO6: Explain the difference between an observational and an

experimental study. 4
Section 1.1
Introduction

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 What is Statistics?

Statistics is the science of

conducting studies to collect,
organize, summarize, analyze,
and draw conclusions from
data
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 Why study Statistics?

• Numerical information is everywhere

• To be able to read and understand the various statistical studies
performed in your fields.
• To conduct research in their field, since statistical procedures
are basic to research.
• To use the knowledge gained from studying statistics to become
better consumers and citizens.
• No matter what line of work you select, you will find yourself
faced with decisions where an understanding of data analysis is
helpful.
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 Why study Statistics?

• You can find probability and statistics through

radio, television, newspapers, and magazines.
Examples
• The average in-state college tuition and fees for
4year public college is $5836.
• There is a 3.8% probability of selecting a briefcase
containing $1 million on the television show “Deal
or No Deal.”
• The back-to-school student plans to spend, on
average, $114.38 on electronics and computer
related items. 8
 Important Terms
Population Sample
The collection of all subjects A portion or subset
(human or otherwise) of the population.
that are being studied.

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 Population size vs sample size
Population Sample
There are two types of A sample size is the
populations number of observations
1- Finite population and the size of the or units in the sample
populations usually denoted by (N) and usually denoted by
2- Infinite population ( Population size (n)
unknown)
.

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 Important Terms
Parameter Statistic
Any measure obtained from a Any measure calculated
population is called a from a sample is called a
parameter statistic

Example Example
Average gross income of all people 2002 gross income of
in the United States in 2002. people from a sample of
three states.

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 Important Terms
To gain knowledge, statisticians collect information for
variables

A variable is a characteristic or attribute that can assume

different values

Data are the values that variables can assume

A data set is a collection of data values

• Each value in the data set is called a data value or a datum.

• Random variables have values that are determined by chance.
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 Section 1.2
Descriptive and Inferential
Statistics

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 Two Branches of Statistics
Descriptive Statistics
Consists of the collection, organization,
summarization, and presentation of data
Example
The national census conducted by the U.S.
government every 10 years.

Inferential Statistics
Consists of generalizing from
samples to populations, performing
estimations and hypothesis tests,
determining relationships among variables,
and making predictions .inferential techniques
Are based on probability theory. 14
Section 1.3
Variables and
types of data

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A variable can be classified according to
the type and the level of measurement
Type of Level of
measurement measurement

Qualitative Nominal
Data

Ordinal

Quantitative
Data
Interval

Ratio
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 Types of variables

Qualitative (categorical) Quantitative

Values are categories , names Values are numbers
(text)
Example: Number of
Example: Gender- marital students in class,
status-Type of automobile weight ,salary,Nb of cars
owned-hair Color owned

Discrete Continuous

1- Have gaps between values (in most 1-Can assume all values between any two
cases Values are integers ) specific values .Possibilities are decimals
2-Limited Number of values 2-Have an unlimited number of possibilities
3-Results from counting 3-Results from measuring

Example: Number of kids in the house , Example: Weight , Height , Age, Distance
number of pencils on the table between Home and University , speed17
 Types of Variables
Qualitative (or categorical) data consists of
• attributes
• labels
• non-numerical entries. i.e The possibilities are
names , categories (text)
Examples: The color of shirts, the type of car, the
condition of a patient.

Quantitative data consists of

• numerical measurements or counts i.e. The
possibilities are numbers
Examples: Age of students, Number of books in
the book bag 18
 Examples
Discrete
1- Each of the several physicians plans to count the number of physical
examinations given during the next full week. The data are discrete data because
they are finite numbers, such as 27 and 46 that result from a counting process.
2- Researchers plan to test the accuracy of a blood typing test by repeating the
process of submitting a sample of the same blood (Type O+) until the test yield
an error. It is possible that each researcher could repeat this test forever without
ever getting an error, but they can still count the number of tests as they
proceed.
Other examples: The number of bedrooms in a house, (1,2,3,…,etc.),the
number of cars arriving at an intersection point, the number of students in each
section,the number of hammers sold in a hardware shop
Continuous
When a typical patient has blood drawn as part of a routine examination, the
volume of blood drawn is between 0 mL and 50 mL. There are infinitely many
values between 0 mL and 50 mL.
Other examples: Temperature, weight , height .time… blood pressure .call
waiting time 19
 Levels or scales of Measurement
• A data can be classified according to the level of measurement

• The level of measurement of the data determines the calculations

that can be done to summarize and present the data.

• The four levels of measurement, listed from lowest to highest are:

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 Levels of Measurement
1- Nominal-level data ( lowest level)

• Data is classified into categories i.e

Qualitative data only
• No order or ranking to the categories
• Categorized using names, labels, or qualities
• No mathematical computations can be made

• It is the lowest level, the one that gives us the

less information about observations
Example: Gender (male,female), eye color
(blue,green,black)

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 Levels of Measurement
2- Ordinal (it is the next higher level of data)

• Data is Qualitative or Quantitative (quantitative

are representing a category)
• Data can be arranged in order, or ranked
• Differences between data entries is not meaningful

• Example: Student’s Rating of finance professor

(superior, Good,Average,Poor),student rank in
class : rank1 , rank2 ,rank3 …. Course grades A, B,
C, D, or F

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 Levels of Measurement
3- Interval (it is the third level of measurement)

• Quantitative data
• Data can be ordered
• Differences between data entries are meaningful
• Meaningless zero : Zero represents a position on
• a scale (not an inherent zero – zero does not imply
“none”) It does not mean the absence of the
characteristic.

• Example: Temperature: 0 C does not mean no

heat,just that it is cold!
IQ tests: do not measure people who have no
intelligence, sea level, birth date
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 Levels of Measurement
4- Ratio (This is the highest level of measurement )

• Practically all quantitative data are recorded on the

ratio level measurement .
• It possesses all the characteristics of interval
measurement, there exists a true zero. The zero point
is the absence of the characteristic . (implies “none”)
• The ratio of two values is meaningful

• Example: Income, salary, weight, height, distance

etc…

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 Difference between
Interval Example: Temperature is a an interval level
variable since there is a meaningful difference of
1° F between each unit, such as 72 and 73° F.
Ranks data and precise
differences between
One property is lacking: there is no true zero :
data do exist however for example 0 ° F does not mean no temperature
there is no meaningful at all.
zero Other examples : IQ ,shoe size

Ratio Example: Weights are an example of ratio

level data
Possesses all the Weights have meaningful difference between
characteristics of interval units : 1 Kg for example and a true zero . In
level measurement and there addition weights have a true ratio between
exists a true zero.
values ; if a person can lift 100Kg and
In addition true ratios exist
when the same variable is another person can lift 50Kg then the ration
measured on two different between them is 2 to 1(the first person can
members of the population. lift twice as much as the second)
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Other examples : Heights ,Time ,Salary ,age
 Summary

Level Categorical Data Difference Ratio

between Between
of Or can be
Quantitative data can data can
measure ordered be found be found
ment
Nominal Categorical
× × ×
Ordinal Categorical  × ×
Interval Quantitative   ×
Ratio Quantitative   
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 Collaborative exercises
1- What type of measure scale is being used? Nominal, Ordinal, Interval or Ratio.
2- High school men soccer players classified by their athletic ability: Superior,
Average, Above average. Ordinal
3- Baking temperatures for various main dishes: 350, 400, 325, 250, 300. Interval
4- The colors of crayons in a 24-crayon box. Nominal
5- Students id numbers. Nominal (It is true that 1, 2, 3, 4, 5, 6, 7, etc are examples
of ID and can be arranged. However, P343XJP213 is also an ID code whose
arrangement is less (or not) meaningful and not universal.
6- Incomes measured in dollars. Ratio
7- A satisfaction survey of a social website by number: 1 = very satisfied, 2 =
somewhat satisfied, 3 = not satisfied. Ordinal
8- Political outlook: extreme left, left-of-center, right-of-center, extreme right.
Nominal
9- The distance in miles to the closest grocery store. Ratio
10- The heights of 21 – 65 year-old women. Ratio
11- Common letter grades A, B, C, D, F. Ordinal
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Section 1.4
Data collection and
Sampling theory

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 1.4.1 Data collection

Data can be collected in a variety of ways:

• Telephone surveys, less costly ,people
may be more candid in their opinions,
people may not have phones or not answer
• Mailed questionnaire surveys, cover a
wider geographic area, anonymous
respondents, low number of responses and
inappropriate answers to questions.
• Personal interview surveys, in-depth
responses, interviewers must be trained and
interviewer may be biased.
• Surveying records ;
• Direct observation
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 1.4.2 Sampling theory

• Usually statistic studies are based on samples,

using samples to collect data about a variable from
large population saves time and money
• A sample must represent well the population
otherwise the information obtained will be biased
• There are four basic methods of sampling (types
of samples)
• Simple Random sample
• Systematic sample
• Stratified sample
• Cluster sample

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 1- Simple random sample

• Subjects are selected by using chance methods or random numbers.

• Random numbers are generated with a calculator or a computer,
therefore any subject in the population has the same probability to be
selected.

Example: A company receives 10000 invoices in a financial year. An

auditor does not have time to examine each of these, so he takes a random
sample of 200. to do so, the first thing he does is to form the sampling
frame by listing the invoices and number them and select 200 number at
random the corresponding invoices will be the random sample wanted

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 2- Systematic sample

• Subjects are selected by using every kth number after the first subject
is randomly selected through 1 to k .

Example: Suppose you have to do a phone survey. Your phone book

contains 20,000 residence listings. You must choose 400 names for the
sample. Number the population 1–20,000 and then use a simple random
sample to pick a number that represents the first name in the sample. Then
choose every fiftieth name thereafter until you have a total of 400 names.

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 3- Stratified sampling
• Samples are obtained by dividing the population into groups according to
some characteristic that is important to the study, then sampling from each
group.
Example 1: You could stratify (group) your college population by department
and then choose a proportionate simple random sample from each stratum
(each department) to get a stratified random sample. To choose a simple
random sample from each department, number each member of the first
department, number each member of the second department, and do the same
for the remaining departments. Then use simple random sampling to choose
proportionate numbers from the first department and do the same for each of
the remaining departments.

Example 2: To collect a stratified sample of the people who live in Ajman ,you
could divide the household in to socioeconomic levels and then randomly
select households

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 4- Cluster sampling
• Samples are obtained by using intact groups (already-
formed group) called clusters.
• Intact meaning :choose all members from selected clusters
Example: If you randomly sample four departments from your
college population, the four departments make up the cluster
sample. Divide your college faculty by department. The
departments are the clusters. Number each department, and
then choose four different numbers using simple random
sampling. All members of the four departments with those
numbers are the cluster sample.

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 Section 1.5
Observational and
experimental Studies

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 Statistical studies are classified as:
Observational and Experimental studies
Observational study
• The researcher observes what is happening or what has happened in
the past and makes conclusions based on these observations.
Example: Data were collected on incomes and ages of motorcycle
owners for the years 1980 and 1998 and then compared ,the findings
showed considerable changes in ages and incomes of motorcycle
owners. Conclusion: motorcycle owners are getting older and richer.

Experimental study
• The researcher manipulates one of the variables and tries to find how
the manipulation affects other variables
Example: applying treatment to individuals and attempts to study the
effect of this treatment on the response (
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 Summary
Statistics, Why?
• Definitions: Statistics , Variable, Sample, Population, Data.
• Classification of statistics: Descriptive and Inferential
Statistics.
• Types of variables: Qualitative and Quantitative (discrete
and continuous).
• Measurement scale (nominal, ordinal, interval, ratio)
• Methods of data collection: Telephone surveys, Mailed
surveys, Personal interview , Surveying records, Direct
observation.
• Sampling methods: Random, systematic, stratified, clustered

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