Statistics Preamble

Introduction
Statistics The art and science of collecting, analyzing, presenting and interpreting data to make more
effective decision. A collection of numerical information is called statistics.
Boring The science of collecting, organizing, summarizing and presetting data, planning and
performing studies and experiments, analyzing results, interpreting results, drawing
conclusions, and presenting results.
Exciting Being able to discover something about a large population by only taking a relatively small sample
from that population.
Data The facts and figures that are collected, analyzed and interpreted. Data are collections of any
numbers of related observations.
Data Set All the data collected in particular study or a collection of data is called data set.
Elements The entities, for example a person, firm, state or country on which data are collected.
Variable A characteristic for the element. For example, sales (variable) of General Motors
(element).
Contd.
Population A set of all elements in a particular study.
Sample A subset, part or portion of the population of interest.
Why sample?
▪ Easy to collect
▪ Time and cost effective
▪ Convenient and manageable
▪ Availability of data
Parameter A numerical measure that describes a characteristic of the entire population.
Statistic A numerical measure that describes a characteristic of a sample.
Descriptive Statistics Organizing, picturing and summarizing data from samples or populations. Tabular,
graphical and numerical methods used to summarize data.
Inferential Statistics The process of using data obtained from a sample to make estimates about the
characteristics of a population. Using data from a sample to draw conclusion about the
population.
Statistics as data-plural sense
Statistical Data “By statistics we mean aggregate of facts affected to a marked extent by
multiplicity of causes, numerically expressed, enumerated or estimated according to
reasonable standard of accuracy, collected in a systematic manner for a pre-
determined purpose and placed in relation to each other.” – Horace Secrist
Features of this definition

▪ Statistics are aggregate of facts.
▪ Statistics are affected to a marked extent by multiplicity of causes.
▪ Statistics are numerically expressed.
▪ Statistics are enumerated or estimated according to reasonable standard of accuracy.
▪ Statistics are collected in a systematic manner.
▪ Statistics are for a pre-determined purpose.
▪ Statistics should be placed in relation to each other.
Statistics as method-singular sense
Statistical Method “Statistics may be defined as a science of collection, presentation, analysis and
interpretation of numerical data.” – Croxton and Cowden
Features of this definition

• Collection
• Organization
• Presentation
• Analysis
• Interpretations
Functions & limitations
Functions
• It presents facts in definite forms.
• It simplifies mass of figures.
• It facilitates comparison.
• It helps in formulating and testing hypothesis.
• It helps in prediction and
• It helps in the formulation of suitable policies.
Limitations
• It does not deal with isolated measurements.
• It deals only with quantitative characteristics.
• Its results are true only on average.
• It is only a means.
• It can be misused.
▪ Misleading graphs (scale).
▪ Association vs. causation

Limitations
• It is often said that statistics can prove anything whether it is wrong or right.
• Three types of lies are there – lies, damn lies and statistics.
• Profit comparison:
Company A = Tk. 50,000 per month
Company B = Tk. 40,000 per month
So normal conclusion is that A is better than B on the basis of given statistics and here we do not consider any
other things like amount of capital used, quality of laborers, wage etc. If they were considered we might reach
a different conclusion.
More Limitations
• Statistics usually produces probabilities; conclusions are provisional.
• The provisional conclusions have errors and error rates. Commonly 5% of the provisional conclusions of
significance testing are wrong.
• Statisticians are not in complete agreement on ideal methods.
• Statistical methods are based on assumptions which are seldom fully met.
• Data gathering is usually limited by ethical, practical and financial constraints.
Contd.
Should we use statistics?
• If it is used properly they help in taking prudent decisions and if misused they can do more harm than good.
• It depends how you would use statistics. But the fault does not lie with the science of statistics as such.
Statistics can help if we can

• Producer reliable data.
• Analyze the data appropriately.
• Draw reasonable conclusions.
Statistical and critical thinking
PREPARE
• Context – what do the data mean? What is the goal of the study?
• Source of the data – where did the data come from?
• Sampling method – were the data collected in a way that is unbiased or biased?
ANALYZE
• Graph the data – we have a separate class on it
• Explore the data – are there outliers? What is the distribution? Is there missing data?
Is there non-response?
• Apply statistical methods – build confidence intervals, conduct hypothesis tests,
calculate probabilities etc.
CONCLUDE
• Statistical significance
• Practical significance
Bias or error in statistical analysis
Misleading conclusions Shoe size and reading score.
Self-reported results Collecting data by allowing people to self-report it.
Small samples Conclusion based on too small sample.
Loaded questions Worded in such a way that they can be misleading, confusing or worded
to a desired response.
Orders of questions People generally choose whatever option they hear first. Randomization
of is needed so that order of the questions may not a factor.
Nonresponse Respondents refuse or are unavailable
Missing data Sample data values are missing due to random factors and special factors.
Low income people do not respond their income.
Precise numbers Big or precise numbers may be confusing.
Percentages Percent of something, percentage point etc.

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Introduction

Sample A subset, part or portion of the population of interest.

Parameter A numerical measure that describes a characteristic of the entire population.

Statistic A numerical measure that describes a characteristic of a sample.

Features of this definition

Features of this definition

• It helps in formulating and testing hypothesis.

• It helps in prediction and

• It helps in the formulation of suitable policies.

• It does not deal with isolated measurements.

• It deals only with quantitative characteristics.

• Its results are true only on average.

▪ Association vs. causation

Statistics can help if we can

Misleading conclusions Shoe size and reading score.

Self-reported results Collecting data by allowing people to self-report it.

Small samples Conclusion based on too small sample.

Nonresponse Respondents refuse or are unavailable

Precise numbers Big or precise numbers may be confusing.

Percentages Percent of something, percentage point etc.

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