CHAPTER 1:

INTRODUCTION Click to edit Master subtitle style

WHAT IS STATISTICS?
Definition Statistics is a group of methods used to collect, analyze, present, and interpret data and to make decisions.

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Definition n Statistics the science that deals with the collection, tabulation, and systematic classification of quantitative data, especially as a basis for inference and induction. Source: Funk and Wagnalls Dictionary
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TYPES OF STATISTICS
Definition Descriptive Statistics consists of methods for organizing, displaying, and describing data by using tables, graphs, and summary measures.

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TYPES OF STATISTICS
Definition Inferential Statistics consists of methods that use sample results to help make decisions or predictions about a population.

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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 .

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POPULATION VERSUS SAMPLE cont.

Definition A portion of the population selected for study is referred to as a sample .

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Figure 1.1 Population and sample.

Population Sample

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POPULATION VERSUS SAMPLE cont.

Definition A survey that includes every number of the population is called a census . The technique of collecting information from a portion of the population is called a sample survey .

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POPULATION VERSUS SAMPLE cont.

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

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POPULATION VERSUS SAMPLE cont.

Definition A sample drawn in such a way that each element of the population has a chance of being selected is called a random sample . If the chance of being selected is the same for each element of the population, it is called a simple random sample .
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BASIC TERMS
Table 1.1
2001 Sales of Seven U.S. Companies

Company Wal-Mart Stores IBM An element General Motors or a member Dell Computer Procter & Gamble JC Penney Home Depot

2001 Sales (millions of dollars) 217,799 85,866 177,260 31,168 39,262 32,004 53,553

Variable

An observation or measurement

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BASIC TERMS cont.

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.

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BASIC TERMS cont.

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.

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BASIC TERMS cont.

Definition The value of a variable for an element is called an observation or measurement .

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BASIC TERMS cont.

Definition A data set is a collection of observations on one or more variables.

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TYPES OF VARIABLES
n

Quantitative Variables
n n

Discrete Variables Continuous Variables

Qualitative or Categorical Variables

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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 .

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Quantitative Variables cont.

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.

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Quantitative Variables cont.

Definition A variable that can assume any numerical value over a certain interval or intervals is called a continuous variable .

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Qualitative or Categorical Variables

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 .
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Figure 1.2

Types of variables.

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CROSS-SECTION VERSUS TIME-SERIES DATA

n n

Cross-Section Data Time-Series Data

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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 .

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Table 1.2

2002 Net Worth of Six Persons

Name Bill Gates Warren Buffett Helen Walton George Lucas Ted Turner Ralph Lauren

2002 Net Worth (billions of dollars) 43.0 36.0 18.8 3.0 2.2 2.0
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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 timeseries data .

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Table 1.3
Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Super Bowl XXVII XXVIII XXIX XXX XXXI XXXII XXXIII XXXIV XXXV XXXVI XXXVII

Price of a 30-Second TV Commercial During Super Bowl Telecast Price of a 30-Seconf TV Commercial (million dollars) .85 .90 1.00 1.10 1.20 1.30 1.60 2.10 2.05 1.90 2.20

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SOURCES OF DATA
n

Data may be obtained from

n n n

Internal sources External sources Surveys and experiments

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SUMMATION NOTATION
Example 1-1 Annual salaries (in thousands of dollars) of four workers are 75, 42, 125, and 61. Find
x b) (x) c) x
a)

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Solution 1-1
a)

b) c)

x = x1 + x2 + x3 + x4 = 75 + 42 + 125 + 61 = 303 = $303,000 (x) = (303) = 91,809 x = (75) + (42) + (125) + (61) = 5625 + 1764 + 15,625 + 3721 = 26,735
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Example 1-2
The following table lists four pairs of m and f values:
m f
12 5 15 9 20 10 30 16

Compute the following:

a) b) c) d)

m f mf mf
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Solution 2-1
Table 1.4
m 12 15 20 30 m = 77 f 5 9 10 16 f = 40 f 5 x 5 = 25 9 x 9 = 81 10 x 10 = 100 16 x 16 = 256 f = 462 mf mf 12 x 5 = 60 12 x 12 x 5 = 720 15 x 9 = 135 15 x 15 x 9 = 2025 20 x 10 = 200 20 x 20 x 10 = 4000 30 x 16 = 480 30 x 30 x 16 = 14,400 mf = 875 mf = 21,145

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