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SET-2
1. What do you mean by sample survey? What are the different sampling methods?
Briefly describe them.
Ans:
Sample is a finite subset of a population drawn from it to estimate the characteristics of the
population. Sampling is a tool which enables us to draw conclusions about the
characteristics of the population.
Survey sampling describes the process of selecting a sample of elements from a target
population in order to conduct a survey.
A survey may refer to many different types or techniques of observation, but in the context
of survey sampling it most often refers to a questionnaire used to measure the
characteristics and/or attitudes of people. The purpose of sampling is to reduce the cost
and/or the amount of work that it would take to survey the entire target population. A
survey that measures the entire target population is called a census.
Sample survey can also be described as the technique used to study about a population
with the help of a sample. Population is the totality all objects about which the study is
proposed. Sample is only a portion of this population, which is selected using certain
statistical principles called sampling designs (this is for guaranteeing that a representative
sample is obtained for the study). Once the sample decided information will be collected
from this sample, which process is called sample survey.
It is incumbent on the researcher to clearly define the target population. There are no strict
rules to follow, and the researcher must rely on logic and judgment. The population is
defined in keeping with the objectives of the study.
Sometimes, the entire population will be sufficiently small, and the researcher can include
the entire population in the study. This type of research is called a census study because
data is gathered on every member of the population.
Usually, the population is too large for the researcher to attempt to survey all of its
members. A small, but carefully chosen sample can be used to represent the population.
The sample reflects the characteristics of the population from which it is drawn.
1. Random sampling is the purest form of probability sampling. Each member of the
population has an equal and known chance of being selected. When there are very
large populations, it is often difficult or impossible to identify every member of the
population, so the pool of available subjects becomes biased.
2. Systematic sampling is often used instead of random sampling. It is also called an
Nth name selection technique. After the required sample size has been calculated,
every Nth record is selected from a list of population members. As long as the list
does not contain any hidden order, this sampling method is as good as the random
sampling method. Its only advantage over the random sampling technique is
simplicity. Systematic sampling is frequently used to select a specified number of
records from a computer file.
3. Stratified sampling is commonly used probability method that is superior to random
sampling because it reduces sampling error. A stratum is a subset of the population
that share at least one common characteristic. Examples of stratums might be males
and females, or managers and non-managers. The researcher first identifies the
relevant stratums and their actual representation in the population. Random sampling
is then used to select a sufficient number of subjects from each stratum. "Sufficient"
refers to a sample size large enough for us to be reasonably confident that the stratum
represents the population.
Stratified sampling is often used when one or more of the stratums in the population have a
low incidence relative to the other stratums.
X 12 15 18 20 27 34 28 48
Y 123 150 158 170 180 184 176 130
Correlation
When two or more variables move in sympathy with other, then they are said to be
correlated. If both variables move in the same direction then they are said to be positively
correlated. If the variables move in opposite direction then they are said to be negatively
correlated. If they move haphazardly then there is no correlation between them.
Correlation analysis deals with
1) Measuring the relationship between variables.
2) Testing the relationship for its significance.
3) Giving confidence interval for population correlation measure.
Regression
Regression is defined as, “the measure of the average relationship between two or more
variables in terms of the original units of the data.” Correlation analysis attempts to study
the relationship between the two variables x and y. Regression analysis attempts to predict
the average x for a given y. In Regression it is attempted to quantify the dependence of one
variable on the other. The dependence is expressed in the form of the equations.
Correlation and linear regression are not the same. Consider these differences:
• Correlation quantifies the degree to which two variables are related. Correlation does
not find a best-fit line (that is regression). You simply are computing a correlation
coefficient (r) that tells you how much one variable tends to change when the other
one does.
• With correlation you don't have to think about cause and effect. You simply quantify
how well two variables relate to each other. With regression, you do have to think
about cause and effect as the regression line is determined as the best way to predict Y
from X.
• With correlation, it doesn't matter which of the two variables you call "X" and which
you call "Y". You'll get the same correlation coefficient if you swap the two. With
linear regression, the decision of which variable you call "X" and which you call "Y"
matters a lot, as you'll get a different best-fit line if you swap the two. The line that
• Correlation is almost always used when you measure both variables. It rarely is
appropriate when one variable is something you experimentally manipulate. With
linear regression, the X variable is often something you experimental manipulate
(time, concentration...) and the Y variable is something you measure.
- Both X and Y is measured in each subject and quantifies how much they are
linearly associated.
- In particular the Pearson's product moment correlation coefficient is used when the
assumption of both X and Y are sampled from normally-distributed populations are
satisfied
- Or the Spearman's moment order correlation coefficient is used if the assumption of
normality is not satisfied.
- Correlation is not used when the variables are manipulated, for example, in
experiments.
- At least one of the independent variables (Xi's) is to predict the dependent variable
Y. Note: Some of the Xi's are dummy variables, i.e. Xi = 0 or 1, which are used to
code some nominal variables.
- If one manipulates the X variable, e.g. in an experiment.
• Linear regression are not symmetric in terms of X and Y. That is interchanging X and
Y will give a different regression model (i.e. X in terms of Y) against the original Y in
terms of X.
On the other hand, if you interchange variables X and Y in the calculation of
correlation coefficient you will get the same value of this correlation coefficient.
• The "best" linear regression model is obtained by selecting the variables (X's) with at
least strong correlation to Y, i.e. >= 0.80 or <= -0.80
• The same underlying distribution is assumed for all variables in linear regression.
Thus, linear regression will underestimate the correlation of the independent and
dependent when they (X's and Y) come from different underlying distributions.
Where:
di = xi − yi = the difference between the ranks of corresponding values Xi and Yi, and
n = the number of values in each data set (same for both sets).
If tied ranks exist, classic Pearson's correlation coefficient between ranks has to be used
instead of this formula.
One has to assign the same rank to each of the equal values. It is an average of their
positions in the ascending order of the values.
Business forecasting refers to the analysis of past and present economic conditions with the
object of drawing inferences about probable future business conditions. To forecast the
future, various data, information and facts concerning to economic condition of business
for past and present are analyzed. The process of forecasting includes the use of statistical
and mathematical methods for long term, short term, medium term or any specific term.
1. Business Barometers
Business indices are constructed to study and analyze the business activities on the basis of
which future conditions are predetermined. As business indices are the indicators of future
conditions, so they are also known as “Business Barometers” or “Economic Barometers‟.
With the help of these business barometers the trend of fluctuations in business conditions
are made known and by forecasting a decision can be taken relating to the problem. The
construction of business barometer consists of gross national product, wholesale prices,
consumer prices, industrial production, stock prices, bank deposits etc. These quantities
may be converted into relatives on a certain base. The relatives so obtained may be
weighted and their average be computed. The index thus arrived at in the business
barometer.
2. Time Series Analysis is also used for the purpose of making business forecasting. The
forecasting through time series analysis is possible only when the business data of
various years are available which reflects a definite trend and seasonal variation.
4. Regression Analysis
The regression approach offers many valuable contributions to the solution of the
forecasting problem. It is the means by which we select from among the many possible
relationships between variables in a complex economy those which will be useful for
forecasting. Regression relationship may involve one predicted or dependent and one
independent variables simple regression, or it may involve relationships between the
variable to be forecast and several independent variables under multiple regressions.
Statistical techniques to estimate the regression equations are often fairly complex and
time-consuming but there are many computer programs now available that estimate simple
and multiple regressions quickly.
This method is regarded as the best method of business forecasting as compared to other
methods. Exponential smoothing is a special kind of weighted average and is found
extremely useful in short-term forecasting of inventories and sales.
Merits:
One of the most simple and popular technical analysis indicators is the moving averages
method. This method is known for its flexibility and user-friendliness. This method
calculates the average price of the currency or stock over a period of time.
The term “moving average” means that the average moves or follows a certain trend. The
aim of this tool is to indicate to the trader if there is a beginning of any new trend or if
there is a signal of end to the old trend. Traders use this method, as it is relatively easy to
understand the direction of the trends with the help of moving averages.
Moving average method is supposed to be the simplest one, as it helps to understand the
chart patterns in an easier way. Since the currency’s average price is considered, the
price’s volatile movements are evened. This method rules out the daily fluctuation in the
prices and helps the trader to go with the right trend, thus ensuring that the trader trades in
his own good.
We come across different types of moving averages, which are based on the way these
averages are computed. Still, the basis of interpretation of averages is similar across all the
types. The computation of each type set itself different from other in terms of weightage it
lays on the prices of the currencies. Current price trend is always given a higher weightage.
The three basic types of moving averages are viz. simple, linear and exponential.
A simple moving average is the simplest way to calculate the moving price averages. The
historical closing prices over certain time period are added. This sum is divided by the
number of instances used in summation. For example, if the moving average is calculated
for 15 days, the past 15 historical closing prices are summed up and then divided by 15.
This method is effective when the number of prices considered is more, thus enabling the
trader to understand the trend and its future direction more effectively.
A linear moving average is the less used one out of all. But it solves the problem of equal
weightage. The difference between simple average and linear average method is the
weightage that is provided to the position of the prices in the latter. Let’s consider the
above example. In linear average method, the closing price on the
15th day is multiplied by 15, the 14th day closing price by 14 and so on till the 1 st day
closing price by 1. These results are totalled and then divided by 15.
The exponential moving average method shares some similarity with the linear moving
average method. This method lays emphasis on the smoothing factor, there by weighing
Moving averages methods help to identify the correct trends and their respective levels of
resistance.
Characteristic of Statistics
Functions of Statistics
5. What are the different stages of planning a statistical survey? Describe the
various methods for collecting data in a statistical survey.
6. What are the functions of classification? What are the requisites of a good
classification? What is Table and describe the usefulness of a table in mode of
presentation of data?
Table is nothing but logical listing of related data in rows and columns.
Parts of a Table.
ii. Title: It indicates the scope and the nature of contents in concise form.
vi.
Ruling and Spacing: They separate columns and rows. However totals are separated from
vii. Head Note: It is given below the title of the table to indicate the units of measurement
of
viii. Source Note: It indicates the source from which data is taken
i. General purpose table or also known as reference table. It facilitates easy reference to
the collected data. They are formed without specific objective, but can be used for any
ii.
Specific purpose table or text table or summary table deal with specific problems. They
are smaller in size and they high light relationship between characteristics. Example: Cost
of living indices.
i.
Primary Table: They contain data in the form in which it were originally collected Ref tab
le
No.1.
ii. Derived Table: They represents figures like totals, averages, ratios etc. derived from
original data.