BoS - Session 1

BASICS OF
STATISTICS
(BoS)
Why study Statistics?
•Data(Information) is everywhere
•Decision makers make better decisions when they use
all available information in an effective and meaningful
way
•Statistics provide with methods for obtaining and
analysing information to help make informative
decisions that affect our lives
•No matter what your career, you will make professional
decisions that involve data

Course Outline
• Applications of Statistics
• Data Types, Measurement Scales

• Graphical Representations
• Measures of Central Tendency

• Measures of Dispersion
• Basics of Probability
• Probability Distributions
Applications in daily life
• Weather Forecasts • Costumer relationship
• Emergency Preparedness management
• Predicting Disease • Quality Testing
• Medical Studies • Stock Market
• Market Share • Attrition
• Political Campaigns • Recruitment
• Insurance • Inventory Management

Statistical Methods
Statistical
Methods
Descriptive Inferential
Statistics Statistics
Descriptive Statistics
• Collect data
– e.g., Survey
• Present data
– e.g., Tables and graphs
• Summarize data
– e.g., Sample mean =
Inferential Statistics
Inferential statistics – The methods used to determine
something about a population on the basis of a sample
Population –The entire set of individuals or objects of interest Population?

or the measurements obtained from all
individuals or objects of interest
Sample – A portion, or part, of the population of interest

1. Involves
• Estimation
• Hypothesis
Testing
2. Purpose
• Make decisions about population characteristics
Inferential Statistics
Estimation
e.g., Estimate the population mean weight
using the sample mean weight
Hypothesis testing
e.g., Test the claim that the population
mean weight is 70 kg
Data
Categorical Scale
(Qualitative) (Quantitative)
Do you practice
Yoga?
Discrete Continuous
Ex: How many books

What is your
Yes / No do you have in your
library? height?
Centimeters
Number
or Inches
Types of Data
Most data can be put into the following categories:

• Qualitative (Categorical)
- Data are measurements that each fall into one of several
categories
- Data are labels or names used to identify an attribute of
each element.
- The statistical analysis for qualitative data are rather limited

• Quantitative(Scale)
- Data are observations that are measured on a numerical scale

- Quantitative data indicate either how many or how much.
Quantitative data that measure how many are discrete.
Quantitative data that measure how much are continuous
- Ordinary arithmetic operations are meaningful only with
quantitative data.
EXAMPLES
Qualitative (Categorical)
Quantitative (Scale)
Hair Color
Distance traveled to college
Ethnic groups
Number of children in a family
Gender
Height of football players
Happiness Rating
Weight of Sumo wrestlers
Pass/Fail
No. of Facebook likes
Descriptive temp. of coffee -
Temperature of coffee
Very hot
- 200 F
Cross-Sectional and Time Series Data
• Cross-sectional data are collected at one given point in time.
Example: data detailing the number of building permits issued

in June 2014 in each of the metros in India
• Time series data are collected over several time periods.
Example: data detailing the number of building permits issued

in Bangalore during 1998-2014.
Longitudinal Data/Pooled Data
• Combination of Time series and Cross-sectional data
• Consists of multiple entities, where each entity is

observed at two or more time periods
• Contain observations of multiple phenomena obtained
over multiple time periods for the same firms or
individuals.
TIME SERIES DATA
Scale of
Measurement
Nominal Ordinal Interval Ratio
Both order and Order, distance,

No order, Order but distance and
distance, no distance but not
unique origin
unique origin
Ex: Gender: Ex: rank the following

Male/Female personal computers
What is your work w.r t usage in your
place?
office. Ex: My job offers me Ex: what is your
IBM/AT a chance to weight?
Production IBM/XT
Sales test my abilities
Apple II
Finance Macintosh
Personnel Compaq
Levels of Measurement
Nominal
Ordinal
interval
Ratio
Classification
Nominal
Ordinal
interval
Ratio
Nominal Scales
• Mutually exclusive and collectively exhaustive categories
• Assigns a value to an object for identification or classification purposes
• Most elementary level of measurement
• No order, distance and origin are not defined
Categorical Variables Categories
Personal Computer Ownership

Yes / No
• No arithmetic is possible.
Type of Mutual funds(Asset class) Equity Funds, Debt Funds, Money Market Funds,
Hybrid Funds
Internet Provider Act Fibernet/ Hathway / Beam/ Airtel

Classification
Nominal
Classification
Ordinal
Order
interval
Ratio
Ordinal Scales
• When data are ordered indicating the relative position of objects
• Does not indicate the magnitude of differences between the objects
• Characteristics of nominal scale plus an indication of order

• Categorical Variable Ordered Categories
Student class designation Freshman, Sophomore, Junior, Senior
Product satisfaction Satisfied, Neutral, Unsatisfied
Faculty rank Professor, Associate Professor, Assistant

Professor, Instructor
Student Grades A, B, C, D, F
Classification
Nominal
Classification
Ordinal
Order
Classification Distance
interval
Order
Ratio
Interval Scales
• Characteristics of nominal and ordinal scales plus the
concept of equality of interval.
• Equal distance exists between numbers
• Does not have a defined absolute zero point

• Cannot be multiplied or divided but it can be added or
subtracted
Classification
Nominal
Classification
Ordinal
Order
interval
Order
Ratio
Order Natural Origin
Ratio Scales
• Highest form of measurement
• Contains a zero value that indicates that nothing exists for

the variable at zero point
• Possess all the properties of interval scales with the
meaningful ratio of two values
• Can be added or subtracted as well as multiplied or divided
Interval and Ratio Scales
Example: Identify each of the following examples as Categorical
(qualitative) or Scale (quantitative) variables and further classify them as
Nominal, Ordinal, Interval or Ratio.
1. Time of the day- Dawn, morning, afternoon, evening, night
2. The amount of gasoline pumped by the next 10 customers at the
local petrol bunk.
3. The segment of different cars in the parking lot of 25 homes in a
in an apartment complex.
5. The length of time to complete a mathematics homework assignment.
6. The overall satisfaction rating of a new car.
7. Whether or not a 6 volt lantern battery is defective.
8. The state in which each truck is registered when stopped and
inspected at a weigh station.
9. The temperature in Barrow, Alaska at 12:00 pm on any given day.

10. Socio Economic status
11. The length of time billed for a long distance telephone call.
12. The brand of cereal children eat for breakfast.

13. The type of book taken out of the library by an adult.
14. Sat scores of students applying for college education.

Does it matter for Data Analysis ?
OK to compute.... Nominal Ordinal Interval Ratio
• frequency Yes Yes Yes Yes
distribution
• median and No Yes Yes Yes

percentiles
• add or subtract No No Yes Yes
• mean, standard
deviation,
standard error of No No Yes Yes
the mean
• ratio, or
coefficient of No No No Yes
variation
The following information regarding the top eight Fortune 500 companies was
presented in an issue of Fortune Magazine.
Sales Sales Profits Profits
Company $ Millions Rank $ Millions Rank
General Motors 161,315 1 2,956 30

Ford Motor 144,416 2 22,071 2
Wal-Mart Stores 139,208 3 4,430 14
Exxon 100,697 4 6,370 5
General Electric 100,469 5 9,269 3
Int'l Business Machines 81,667 6 6,328 6
Citigroup 76,431 7 5,807 8
Philip Morris 57,813 8 5,372 9
Boeing 56,154 9 1,120 82
AT&T 53,588 10 6,398 4
a. How many elements are in the above data set?
b. How many variables are in this data set?
c. Which variables are categorical, and which are quantitative variables?
d. What measurement scale is used for each variable?
The Food and Drug Administration (FDA) reported the number of new drugs
approved over an eight-year period. The following figure provides a bar chart
summarizing the number of new drugs approved each year.
a. Are the data categorical or quantitative?
b. Are the data time series or cross-sectional?
c. How many new drugs were approved in 2003?
d. In what year were the fewest new drugs approved? How many?
e. Comment on the trend in the number of new drugs approved by the FDA over the
eight-year period.

BoS - Session 1

Uploaded by

Copyright:

Available Formats

BoS - Session 1

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

BoS - Session 1

Uploaded by

Copyright:

Available Formats

BASICS OF

•Decision makers make better decisions when they use

all available information in an effective and meaningful

•Statistics provide with methods for obtaining and

analysing information to help make informative

decisions that affect our lives

•No matter what your career, you will make professional

decisions that involve data

• Data Types, Measurement Scales

• Measures of Central Tendency

• Predicting Disease • Quality Testing

• Medical Studies • Stock Market

• Market Share • Attrition

• Political Campaigns • Recruitment

• Insurance • Inventory Management

Population –The entire set of individuals or objects of interest Population?

Sample – A portion, or part, of the population of interest

Ex: How many books

Most data can be put into the following categories:

- Data are measurements that each fall into one of several

- The statistical analysis for qualitative data are rather limited

- Data are observations that are measured on a numerical scale

- Ordinary arithmetic operations are meaningful only with

• Cross-sectional data are collected at one given point in time.

Example: data detailing the number of building permits issued

• Time series data are collected over several time periods.

Example: data detailing the number of building permits issued

• Combination of Time series and Cross-sectional data

• Consists of multiple entities, where each entity is

Nominal Ordinal Interval Ratio

Both order and Order, distance,

Ex: Gender: Ex: rank the following

Personal Computer Ownership

Internet Provider Act Fibernet/ Hathway / Beam/ Airtel

• Characteristics of nominal scale plus an indication of order

Product satisfaction Satisfied, Neutral, Unsatisfied

Faculty rank Professor, Associate Professor, Assistant

• Does not have a defined absolute zero point

• Contains a zero value that indicates that nothing exists for

inspected at a weigh station.

9. The temperature in Barrow, Alaska at 12:00 pm on any given day.

12. The brand of cereal children eat for breakfast.

14. Sat scores of students applying for college education.

• median and No Yes Yes Yes

General Motors 161,315 1 2,956 30

You might also like