ECON1203: Statistics

Chapter 1: What is statistics?

ECON1203: Statistics
Chapter 1: What is statistics?
1. Descriptive statistics
Descriptive statistics deals with methods of organising, summarising and
presenting data in a convenient and informative way (e.g. graphs, averages,
means).
We need three pieces of information:
1. A measure of central location (e.g. mean)
2. A measure of variability (e.g. range)
3. A measure of distribution (e.g. histograms)

2. Inferential statistics
Inferential statistics is a body of methods used to draw conclusions or
inferences about characteristics of populations based on sample data (e.g. exit
polls to predict election outcomes).

3. Key statistical concepts

a. Population
* A population is the group of all items of interest to a statistics practitioner (it
does not necessarily refer to a group of people, e.g. the population of products
manufactured at a plant).

A parameter is a descriptive measure of a population (e.g. the proportion

of voters who voted for a particular candidate).

b. Sample
A sample is a set of data drawn from a studied population.

A statistic is a descriptive measure of a sample (e.g. mean).

c. Statistical inference
Statistical inference is the process of making an estimate, prediction or
decision about a population based on sample data. There are two measures of
reliability:

ECON1203: Statistics

Chapter 1: What is statistics?

1. The confidence level is the proportion of times that an estimating

procedure will be correct (e.g. the average level of consumption of a
particular product).
2. The significance level is the proportion of times that a conclusion will be
wrong (e.g. that a particular candidate will win an election).