The Importance of Statistics A proper understanding of statistical ideas and concepts helps us understand more of the real world

around us, including issues in business, finance, health, and social interactions. We must understand statistics or risk making bad decisions and costly mistakes. A knowledge of statistics also provides the necessary tools to differentiate between sound statistical conclusion and questionable conclusion drawn from an insufficient number of data points, bad data points, incomplete data points, or just misinformation. Differentiate between descriptive statistics and inferential statistics The study of statistics is generally divided into two branches; descriptive statistics and inferential statistics. Descriptive statistics refers to summary of a data set in the form of tables, graphs, or the calculation from a sample to draw conclusions about a population. A population consists of the complete collection of items with the characteristic we wish to understand. A sample is a subset of the population of interest. Explain the need for sampling and discuss various data types In general, we use sample data rather than population for two main reasons: (1) obtaining information on the entire population is expensive, or (2) it is impossible to examine every item of the population. Cross-sectional data contain values of a characteristic of many subjects at the same point in time or without regard to differences in time. Time series data contain values of a characteristic of a subject over time. Describe variables and various types of measurement scales A qualitative variable is normally described in words rather than numerically. A quantitative variable assumes meaningful numerical values, and can be further categorized as either discrete or continuous. A discrete variable assumes a countable number of distinct, whereas a continuous variable can take on any value within an interval. All data measurements can be classified into one of four major categories. - The nominal scale represents the least sophisticated level of measurement. The values in nominal data differ merely by name or label, and the values are then simply categorized or grouped by name. - \