EC151 Statistics

Chuanliang Jiang

2009 Fall

Chuanliang Jiang EC151 Statistics

Why study statistics?

In everyday life, a lot of information is summarized

quantitatively, in the form of numbers, graphs or tables?

Example:

”One-third of all young men in China are likely to die from

smoking-related diseases, say scientists” BBC News
The Nasdaq Composite Index was recently up 0.4%. The S&P
500 rose 0.6%, helped by gains in all its sectors except health
care, off 0.4%. The broad index’s strongest category was
energy, thanks to the rally in crude prices.

Chuanliang Jiang EC151 Statistics

Why study statistics?

Statistics provides an effective approach to extract

information from ”raw” data, which would otherwise be
disguised or difficult to obtain without statistical analysis.

What basic information can be revealed from the data ?

Are claims based on numerical data reasonable and how to test
it?
Is there any relationship or causal effect between two variables
and How to measure their dependence precisely(quantitatively)
?

Chuanliang Jiang EC151 Statistics

Process of Statistical Investigations

Understanding the nature of the problem and pose questions

Collect the relevant data

Choose a sample
Determine what to measure and how to measure it ?

Analyse the data

Summary statistics, tables, graphs, statistical test

Interpret the results

Chuanliang Jiang EC151 Statistics

 Describing Data : Graphical

”One picture is worth a thousand words”

Chuanliang Jiang EC151 Statistics

Classification of Variables

Categorical Variable (Qualitative Variable)

Marriage status, gender, human blood type, race, geographic area,
···.

Numerical Variable (Quatitative Variable)

Discrete Variable age, number of emails received daily

Continuous Variable temperature, height, weight

Chuanliang Jiang EC151 Statistics

Classification of Variables

Classify the variables in term of Measurement Scale

Nominal Variable
Marriage status, gender, · · ·
Ordinal Variable
The survey of quality rating of product(poor, average, good,
excellent), the preference among three vacation places (most
preferred, second choice, third choice), · · ·
Interval Variable
Temparature, calendar, · · ·
Ratio Variable
Weight, height, age, income, · · ·

Chuanliang Jiang EC151 Statistics

 Gender GPA Athlete Age Year of Graduation
Jackie F 3.7 Yes 22 2008
Celine F 3.2 Yes 21 2007
Marcelo M 3.5 No 20 2009
Kevin M 2.9 Yes 19 2002
Andrei M 3.1 Yes 21 2001
Rebecca F 3.3 Yes 23 2008
Madison F 3.4 No 20 2007
Juliana F 2.3 Yes 21 2010
Paul M 3.4 No 23 2006
Adriana F 2.7 No 19 2011

Which variable is categorical, numerical, discrete, continuous,

nominal, ordinal, interval and ratio variable?

Chuanliang Jiang EC151 Statistics

Graphs to Describe Categorical Variables

Examples of Quantitative and Qualitative Variables.

Gender GPA Athlete Gender GPA Athlete

Jackie F 3.7 Yes Celine F 3.2 Yes
Marcelo M 3.5 No Kevin M 2.9 Yes
Andrei M 3.1 Yes Rebecca F 3.3 Yes
Madison F 3.4 No Juliana F 2.3 Yes
Paul M 3.4 No Adriana F 2.7 No

Chuanliang Jiang EC151 Statistics

Graphs to Describe Categorical Variables

Frequencies and Percent Frequencies Based on Gender and

Athlete Category
Category Frequency Percent Frequency
Female Athlete 4 40
Female Non-Athlete 2 20
Male Athlete 2 20
Male Non-Athlete 2 20
Total 10 100

Chuanliang Jiang EC151 Statistics

Chuanliang Jiang EC151 Statistics
Chuanliang Jiang EC151 Statistics
Graphs to Describe Numerical Variables

Frequency distribution of Class GPA

GPA GPA GPA

Jackie 3.7 Celine 3.2 Terence 3.3
Marcelo 3.5 Kevin 2.9 Samuel 2.6
Andrei 3.1 Rebecca 3.1 Janice 2.8
Madison 3.4 Juliana 2.3 Esteban 3.0
Paul 3.4 Adriana 2.7 Lee 3.2
Anderson 2.5 Dennis 2.0 Jaideep 2.8
matio 3.2 Fabio 3.1 Shannon 4.0
Jiang 3.1 Lucas 2.9 Konish 2.3

Chuanliang Jiang EC151 Statistics

Rules to Construct the Frequency Distribution of
Numerical Variables

Determine the Number of Categories(Interval) k

Intervals(Categories) Should be the same width

Largest Number - Smallest Number

w=
Number of Categories

Intervals(Categories) must be inclusive and non overlapping.

Chuanliang Jiang EC151 Statistics

 4−2
Set the number of categories k = 4, the width w = 4 = 0.5

2.0< GPA ≤ 2.5

2.5< GPA ≤ 3.0
3.0< GPA ≤ 3.5
3.5< GPA ≤ 4.0

Count the number of students that satisfy each class as follows

Class count percentage(%)

2.0 to 2.5 4 16.67
2.5 to 3.0 7 29.17
3.0 to 3.5 11 45.83
3.5 to 4.0 2 8.33
Total 24 100

Chuanliang Jiang EC151 Statistics

Graphs to Describe Numerical Variables

A Histogram of GPA Distributiion

Chuanliang Jiang EC151 Statistics

Graphs to Describe Numerical Variables

4−2
k=8 w= = 0.25
8

2.0< GPA ≤ 2.25

2.25< GPA ≤ 2.5
2.5< GPA ≤ 2.75
2.75< GPA ≤ 3.0
3.0< GPA ≤ 3.25
3.25< GPA ≤3.5
3.5< GPA ≤ 3.75
3.75< GPA ≤ 4.0

Chuanliang Jiang EC151 Statistics

Graphs to Describe Numerical Variables

Count the number of students that satisfy each category as follows

Class count percentage(%)

2.to 2.25 1 4.17
2.25 to 2.5 3 12.50
2.5 to 2.75 2 8.33
2.75 to 3.0 5 20.83
3.0 to 3.25 6 25.00
3.25 to 3.5 4 16.67
3.5 to 3.75 2 8.33
3.75 to 4.0 1 4.17
Total 24 100

Chuanliang Jiang EC151 Statistics

A Histogram of GPA Distribution

Chuanliang Jiang EC151 Statistics

a rule of thumb to approximate number of intervals

Table :A quick guide to approxiamte number of intervals for a

frequency distribution

Sample size Number of Categories

Fewer than 50 5−7
50 to 100 7-8
101 to 500 8-10
501 to 1000 10-11
1001 to 5000 11-14
more than 5000 14-20

Chuanliang Jiang EC151 Statistics

Let k = 5
The frequency of distribution is :

Category count percentage(%)

2 to 2.4 3 12.50
2.4 to 2.8 5 20.83
2.8 to 3.2 9 37.5
3.2 to 3.6 5 20.83
3.6to 4.0 2 8.33
Total 24 100

Chuanliang Jiang EC151 Statistics

Graph to Describe Numerical Variable

The Histogram of GPA Distributiion

Chuanliang Jiang EC151 Statistics

Graph and Table to Describe Relationships between
Variable

SAT Math Versus GPA

SAT MATH GPA
450 3.25
480 2.60
500 2.88
520 2.85
560 3.30
580 3.10
590 3.35
600 3.20
620 3.50
650 3.59
700 3.95

Chuanliang Jiang EC151 Statistics

Graph to Describe Relationships between Variables

Scatter plot of SAT Math Versus GPA

Chuanliang Jiang EC151 Statistics

Graph to Describe Relationships between Variables

Consider a survey of restaurants’ quality rating and their price.

Meal Price ($)

Quality Rating 10-19 20-29 30-39 40-49 Total
Good 42 40 2 0 84
Very Good 34 64 46 6 150
Excellent 2 14 28 22 66
Total 78 118 76 28 300

Chuanliang Jiang EC151 Statistics

Graph to Describe Relationships between Variables

The bar charts of price versus rating

Chuanliang Jiang EC151 Statistics

Graph to Describe Time Series Data

Chuanliang Jiang EC151 Statistics