STATISTICSDEFINITION&TYPES

Introduction:

Decisionmakersmakebetterdecisionswhentheyuseallavailable
informationinaneffectiveandmeaningfulway.Theprimaryroleof
statisticsistotoprovidedecisionmakerswithmethodsforobtainingand
analyzinginformationtohelpmakethesedecisions.Statisticsisusedto
answerlongrangeplanningquestions,suchaswhenandwheretolocate
facilitiestohandlefuturesales.

Definition:

Statisticsisdefinedasthescienceofcollecting,organizing,presenting,
analyzingandinterpretingnumericaldataforthepurposeofassistingin
makingamoreeffectivedecision.

TypesofStatistics:

Therearetwotypesofstatistics

1.DescriptiveStatisticsisconcernedwithsummarycalculations,graphs,
chartsandtables.

2.InferentialStatisticsisamethodusedtogeneralizefromasampletoa
population.Forexample,theaverageincomeofallfamilies(the
population)intheUScanbeestimatedfromfiguresobtainedfromafew
hundred(thesample)families.

StatisticalPopulation:

Isthecollectionofallpossibleobservationsofaspecifiedcharacteristicof
interest.AnexampleisallofthestudentsinBUSA3101courseinthis
term.Notethatasampleisasubsetofthepopulation.

Variable:

Avariableisanitemofinterestthatcantakeonmanydifferentnumerical
values.

TypesofVariablesorData:

1.QualitativeVariablesarenonnumericvariablesandcan'tbemeasured.
Examplesincludegender,religiousaffiliation,stateofbirth.

2.QuantitativeVariablesarenumericalvariablesandcanbemeasured.
Examplesincludebalanceinyourcheckingaccount,numberofchildrenin
yourfamily.Notethatquantitativevariablesareeitherdiscrete(whichcan
assumeonlycertainvalues,andthereareusually"gaps"betweenthe
values,suchasthenumberofbedroomsinyourhouse)orcontinuous
(whichcanassumeanyvaluewithinaspecificrange,suchastheair
pressureinatire.)

TypesofQuantitativeData:

Therearefour(4)typesofquantitativedata:

1.NominalData:Theweakestdatameasurement.Numbersareusedto
representanitemorcharacteristic.Examplesinclude:acollegemay
designatemajorsbynumbers,i.e.,BBAinaccounting=1,BBAin
management=04,ormale=1andfemale=2.Notethatsuchdatashouldnot
betreatedasnumerical,sincerelativesizehasnomeaning.

2.OrdinalorRankData:Numbersareusedtorank.Anexampleiswind
forcesatsea.Agentlebreezeisratedat3,astrongbreezeat6.Simple
arithmeticoperationsarenotmeaningfullyappliedtoordinaldata.
Anotherexampleisexcellent,good,fairandpoor.
Themaindifferencebetweenordinaldataandnominaldataisthat
ordinaldatacontainbothanequality(=)andagreaterthan(>)
relationship,whereasthenominaldatacontainonlyanequality(=)
relationship.

3.IntervalData:Ifwehavedatawithordinalproperties(>&=)andcan
alsomeasurethedistancebetweentwodataitems,wehaveaninterval
measurement.
Intervaldataarepreferredoverordinaldatabecause,withthem,decision
makerscanpreciselydeterminethedifferencebetweentwoobservations,
i.e.,distancesbetweennumberscanbemeasured.Forexample,frozenfood
packagershavedailycontactwithacommonintervalmeasurement
temperature.

4.RatioData:Isthehighestlevelofmeasurementandallowsforallbasic
arithmeticoperations,includingdivisionandmultiplication.Data
measuredonaratioscalehaveafixedornonarbitraryzeropoint.
Examplesincludebusinessdata,suchascost,revenueandprofit.

SourcesofData:

1.SecondaryData:Datawhicharealreadyavailable.Anexample:
statisticalabstractofUSA.Advantage:lessexpensive.Disadvantage:may
notsatisfyyourneeds.

2.PrimaryData:Datawhichmustbecollected.

MethodsofCollectingPrimaryData:

1.FocusGroup;2.TelephoneInterview;3.MailQuestionnaires;4.Doorto
DoorSurvey;5.MallIntercept;6.NewProductRegistration;7.Personal
Interview;and8.Experimentsaresomeofthesourcesforcollectingthe
primarydata.
SamplingMethods:

Therearemanywaystocollectasample.Themostcommonlyused
methodsare:

A.StatisticalSampling:

1.SimpleRandomSampling:Isamethodofselectingitemsfroma
populationsuchthateverypossiblesampleofspecificsizehasanequal
chanceofbeingselected.Inthiscase,samplingmaybewithorwithout
replacement.

2.StratifiedRandomSampling:Isobtainedbyselectingsimplerandom
samplesfromstrata(ormutuallyexclusivesets).Someofthecriteriafor
dividingapopulationintostrataare:Sex(male,female);Age(under18,18
to28,29to39);Occupation(bluecollar,professional,other).

3.ClusterSampling:Isasimplerandomsampleofgroupsorclusterof
elements.Clustersamplingisusefulwhenitisdifficultorcostlyto
generateasimplerandomsample.Forexample,toestimatetheaverage
annualhouseholdincomeinalargecityweuseclustersampling,because
tousesimplerandomsamplingweneedacompletelistofhouseholdsin
thecityfromwhichtosample.Tousestratifiedrandomsampling,we
wouldagainneedthelistofhouseholds.Alessexpensivewayistoleteach
blockwithinthecityrepresentacluster.Asampleofclusterscouldthenbe
randomlyselected,andeveryhouseholdwithintheseclusterscouldbe
interviewedtofindtheaverageannualhouseholdincome.

B.NonstatisticalSampling:

1.JudgementSampling:Inthiscase,thepersontakingthesamplehas
directorindirectcontroloverwhichitemsareselectedforthesample.
2.ConvenienceSampling:Inthismethod,thedecisionmakerselectsa
samplefromthepopulationinamannerthatisrelativelyeasyand
convenient.

3.QuotaSampling:Inthismethod,thedecisionmakerrequiresthesample
tocontainacertainnumberofitemswithagivencharacteristic.Many
politicalpollsare,inpart,quotasampling.