Mcgraw-Hill/Irwin © 2005 The Mcgraw-Hill Companies, Inc., All Rights Reserved

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Chapter
One
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.

1-2
Chapter One
What is Statistics?
GOALS
When you have completed this chapter, you will be able to:
ONE
Understand why we study statistics.
TWO
Explain what is meant by descriptive statistics and inferential statistics.
THREE
Distinguish between a qualitative variable and a quantitative variable.
FOUR
Distinguish between a discrete variable and a continuous variable.
FIVE
Distinguish among the nominal, ordinal, interval, and ratio levels
of measurement.
SIX
Define the terms mutually exclusive and exhaustive. Goals
1-3
Statistics is the science

of collecting, organizing,
presenting, analyzing,
and interpreting
numerical data to assist
in making more
effective decisions.
  
 
What is Meant by Statistics?
1-4
Statistical techniques are

used extensively by
marketing, accounting,
quality control,
consumers, professional
sports people, hospital
administrators,
educators, politicians,
physicians, and many
others.
Who Uses Statistics?

1-5
Descriptive Statistics: Methods of organizing,

summarizing, and presenting data in an informative way.
EXAMPLE 1: A EXAMPLE 2: According
Gallup poll found that to Consumer Reports,
49% of the people in a General Electric washing
survey knew the name machine owners reported
of the first book of the 9 problems per 100
Bible. The statistic 49 machines during 2001.
describes the number The statistic 9 describes
out of every 100 the number of problems
persons who knew the out of every 100 machines.
answer.
Types of Statistics
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Inferential Statistics: A decision, estimate,

prediction, or generalization about a population,
based on a sample.
A Population A Sample is a
is a Collection portion, or part,
of all possible of the population
individuals, of interest
objects, or
measurements of
interest.
Types of Statistics
1-7
Example 1: TV Example 2: Wine

networks constantly tasters sip a few drops
monitor the of wine to make a
popularity of their decision with respect
programs by hiring to all the wine waiting
Nielsen and other to be released for sale.
organizations to
sample the Example 3: The accounting
preferences of TV department of a large firm will
viewers. select a sample of the invoices to
check for accuracy for all the
invoices of the company.
#1
Types of Statistics
(examples of inferential statistics)
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Definition of Descriptive Statistics:

Descriptive statistic consists of procedures used to
summarize the information in a set of measurements and
to describe the characteristics of the set.
Definition of Inferential Statistics:

 Inferential statistics consists of procedures used to
make inferences about population characteristics from
information contained in a sample.
1-9
For a Qualitative or Attribute Variable the

characteristic being studied is nonnumeric.
Gender
Eye
Color
State of
Type of car Birth
Types of Variables
1-10
In a Quantitative Variable information is

reported numerically.
Balance in your checking account
Minutes remaining in class
Number of children in a family
Types of Variables
1-11
Quantitative variables can be classified as either

Discrete or Continuous.
Discrete Variables: can only assume

certain values and there are usually “gaps”
between values.
Example: the number of
bedrooms in a house, or
the number of hammers
sold at the local Home
Depot (1,2,3,…,etc).
Types of Variables
1-12
A Continuous Variable can assume any

value within a specified range.
The pressure in a tire
The weight of a pork chop
The height of students in a class.
Types of Variables
1-13
DATA
Qualitative or attribute Quantitative or numerical

(type of car owned)
discrete continuous
(number of children) (time taken for an exam)
Summary of Types of Variables

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There are four levels of

data
Nominal
Ordinal
Interval
Ratio
Levels of Measurement
1-15
Nominal level Gender

Data that is
classified into
categories and
cannot be arranged Eye
in any particular Color
order.
Nominal data
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Nominal level variables must be:
Mutually exclusive
An individual, object, or
measurement is included in only
one category.
Exhaustive
Each individual, object, or
measurement must appear in one
of the categories.
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Ordinal level: involves data arranged in some

order, but the differences between data values cannot
be determined or are meaningless.
During a taste test of 4 soft

drinks, Coca Cola was
4
ranked number 1, Dr.
Pepper number 2, Pepsi
2
number 3, and Root Beer
number 4.
3
Skala likert 5: 1 1
STS; 2 TS; 3 KS; 4
S; 5 SS.
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Interval level
Similar to the ordinal level, with the additional
property that meaningful amounts of differences
between data values can be determined. There is no
natural zero point.
Temperature on the
Fahrenheit scale.
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Ratio level: the interval level with an inherent

zero starting point. Differences and ratios are
meaningful for this level of measurement.
Miles traveled by sales Monthly income

representative in a month
of surgeons

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1-1

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.

Statistics is the science

Statistical techniques are

Who Uses Statistics?

Descriptive Statistics: Methods of organizing,

Inferential Statistics: A decision, estimate,

Example 1: TV Example 2: Wine

Definition of Descriptive Statistics:

Definition of Inferential Statistics:

For a Qualitative or Attribute Variable the

In a Quantitative Variable information is

Balance in your checking account

Minutes remaining in class

Number of children in a family

Quantitative variables can be classified as either

Discrete Variables: can only assume

A Continuous Variable can assume any

The pressure in a tire

The weight of a pork chop

The height of students in a class.

Qualitative or attribute Quantitative or numerical

Summary of Types of Variables

There are four levels of

Nominal level Gender

Nominal level variables must be:

Ordinal level: involves data arranged in some

During a taste test of 4 soft

Ratio level: the interval level with an inherent

Miles traveled by sales Monthly income

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