Prem Mann, Introductory Statistics, 9/E

CHAPTER 1
INTRODUCTION
Prem Mann, Introductory Statistics, 9/E

Copyright © 2015 John Wiley & Sons. All rights reserved.
Opening Example
Are you, as an American, thriving in your life? Or are you struggling? Or, even
worse, are you suffering? A poll of 176,903 American adults, aged 18 and
older, was conducted January 2 to December 30, 2014, as part of the Gallup-
Healthways Well-Being Index survey. The poll found that while 54.1% of these
Americans said that they were thriving, 42.1% indicated that they were
struggling, and 3.8% mentioned that they were suffering. (See Case Study 1–
2.)

1.1 Statistics and Types of Statistics
 Definition
 Statistics is the science of collecting, analyzing, presenting,
and interpreting data, as well as of making decisions based
on such analyses.

Types of Statistics: Descriptive Statistics
 Definition
 Descriptive Statistics consists of methods for organizing,
displaying, and describing data by using tables, graphs, and
summary measures.

Case Study 1-1 Lobbying Spending by Selected Companies

Case Study 1-2 American’s Life Outlook 2014

Types of Statistics: Inferential Statistics
 Definition
 Inferential Statistics consists of methods that use sample
results to help make decisions or predictions about a
population.

1.2 Basic Terms
 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.

Basic Terms
 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.

Basic Terms
 Definition
 The value of a variable for an element is called an
observation or measurement.
 A data set is a collection of observations on one or more

variables.

Table 1.1 Total Wealth of the World’s Eight Richest Persons

1.3 Types of Variables
 Quantitative Variables
 Discrete Variables
 Continuous Variables
 Qualitative or Categorical Variables

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.

Quantitative Variables: Discrete
 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.

Quantitative Variables: Continuous
 Definition
 A variable that can assume any numerical value over a
certain interval or intervals is called a continuous
variable.

Qualitative or Categorical Variable
 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.

Figure 1.1 Types of Variables

1.4 Cross-Section Versus Time-Series Data
 Cross-Section Data
 Time-Series Data

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.

Table 1.2 Total Wealth of World’s Eight Richest Persons

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.

Table 1.3 Average Tuition and Fees in 2014 Dollars at Four-Year
Public Institutions

1.5 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.
 A portion of the population selected for study is referred to

as a sample.

Figure 1.2 Population and Sample

Population Versus Sample
 Definition
 A survey that includes every member of the population is
called a census. The technique of collecting information
from a portion of the population is called a sample
survey.

Representative Sample
 Definition
 A sample that represents the characteristics of the population
as closely as possible is called a representative sample.

Random Sample Versus Non-Random Sample
 Definition
 A random sample is a sample drawn in such a way that
each member of the population has some chance of being
selected. In a non-random sample, some members of the
population may not have any chance of being selected in the
sample.

Sampling Error Versus Non-sampling Error
 Definition
 The sampling error is the difference between the result
obtained from a sample survey and the result that would
have been obtained if the whole population had been
included in the survey.
 The errors that occur in the collection, recording, and

tabulation of data are called non-sampling errors or
biases.

Figure 1.3 Types of Errors

Selection Error Versus Nonresponse Error
 Definition
 The list of members of the target population that is used to
select a sample is called the sampling frame. The error that
occurs because the sampling frame is not representative of
the population is called the selection error or biases.
 The error that occurs because many of the people included

in the sample do not respond to a survey is called the
nonresponse error or biases.

Response Error Versus Voluntary Response Error
 Definition
 The response error or biases occurs when people included
in the survey do not provide correct answers.
 Voluntary response error or biases occurs when a survey

is not conducted on a randomly selected sample but on a
questionnaire published in a magazine or newspaper and
people are invited to respond to that questionnaire.


Random Sampling Techniques
 Definition
 In this sampling technique, each sample of the same size
has the same probability of being selected. Such a sample is
called a simple random sample.
 In systematic random sampling, we first randomly select

one member from the first k units of the list of elements
arranged based on a given characteristic where k is the
number obtained by dividing the population size by the
intended sample size. Then every kth member, starting with
the first selected member, is included in the sample.

Random Sampling Techniques
 Definition
 In stratified random sample, we first divide the
population into subpopulations, which are called strata.
Then, one sample is selected from each of these strata. The
collection of all samples from all strata gives the stratified
random sample.
 In cluster sampling, the whole population is first divided

into (geographical) groups called clusters. Each cluster is
representative of the population. Then a random sample of
clusters is selected. Finally, a random sample of elements
from each of the selected clusters is selected.

1.6 Design of Experiments
 Definition
 A condition (or a set of conditions) that is imposed on a
group of elements by the experimenter is called a
treatment.
 The procedure in which elements are assigned to different

groups at random is called randomization.

Designed Experiment Versus Observational Study
 Definition
 When the experimenter controls the (random) assignment
of elements to different treatment groups, the study is said
to be a designed experiment. In contrast, in an
observational study the assignment of elements to
different treatments is voluntary, and the experimenter
simply observes the results of the study.

Treatment Group Versus Control Group
 Definition
 The group of elements that receives a treatment is called
the treatment group, and the group of elements that does
not receive a treatment is called the control group.

Example 1-1
 Suppose a pharmaceutical company has developed a new
medicine to cure a disease. To see whether or not this
medicine is effective in curing this disease, it will have to be
tested on a group of humans. Suppose there are 100
persons who have this disease; 50 of them voluntarily decide
to take this medicine, and the remaining 50 decide not to
take it. The researcher then compares the cure rates for the
two groups of patients. Is this an example of a designed
experiment or an observational study?

Example 1-1: Solution
 This is an example of an observational study because 50
patients voluntarily joined the treatment group; they were
not randomly selected.
 In this case, the results of the study may not be valid
because the effects of the medicine will be confounded with
other variables. All of the patients who decided to take the
medicine may not be similar to the ones who decided not to
take it. It is possible that the persons who decided to take
the medicine are in the advanced stages of the disease.
Consequently, they do not have much to lose by being in the
treatment group. The patients in the two groups may also
differ with regard to other factors such as age, gender, and
soon.

Example 1-2
 Reconsider Example 1–1. Now, suppose that out of the 100
people who have this disease, 50 are selected at random.
These 50 people make up one group, and the remaining 50
belong to the second group. One of these groups is the
treatment group, and the second is the control group. The
researcher then compares the cure rates for the two groups
of patients. Is this an example of a designed experiment or
an observational study?

 In this case, the two groups are expected to be very similar
to each other. Note that we do not expect the two groups to
be exactly identical. However, when randomization is used,
the two groups are expected to be very similar. After these
two groups have been formed, one group will be given the
actual medicine. This group is called the treatment group.
The other group will be administered a placebo (a dummy
medicine that looks exactly like the actual medicine). This
group is called the control group.
 This is an example of a designed experiment because the
patients are assigned to one of two groups—the treatment or
the control group—randomly.

1.7 Summation Notation
 Suppose a sample consists of five books, and the prices of
these five books are
 $175, $80, $165, $97, and $88
 The variable price of a book: x
 Price of the first book = x1 = $175

 Price of the second book = x2 = $80
 Price of the third book = x3 = $165
 Price of the fourth book = x4 = $97
 Price of the fifth book = x5 = $88

Summation Notation
 Adding the prices of all five books gives
 x1+x2+x3+x4+x5 = 175+80+165+97+88 = $605
 Σx = x1+x2+x3+x4+x5 = $605

Example 1-3
 Annual salaries (in thousands of dollars) of four workers are
75, 90, 125, and 61, respectively. Find
(a) ∑x (b) (∑x)² (c) ∑x²

(a) ∑x = x1 + x2 + x3 + x4
= 75 + 90 + 125 + 61
= 351 = $351,000
(b) Note that (∑x)² is the square of the sum of all x values.
Thus,
(∑x)² = (351)² = 123,201

(c) The expression ∑x² is the sum of the squares of x values.
To calculate ∑x² , we first square each of the x values and

then sum these squared values. Thus,
∑x² = (75)² + (90)² + (125)² + (61)²

= 5,625 + 8,100 + 15,625 + 3,721
= 33,071

Example 1-4
The following table lists four pairs of m and f values:
Compute the following:

(a) Σm (b) Σf² (c) Σmf (d) Σm²f

We can write
m1 = 12 m2 = 15 m3 = 20 m4 = 30
f1 = 5 f2 = 9 f3 = 10 f4 = 16
(a) (b) (c) (d)

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What are the different types of statistics discussed in the document?

What are the different types of statistics discussed in the document?

What are some of the basic terms defined in statistics?

What are some of the basic terms defined in statistics?

CHAPTER 1