MODULE 1 WEEK NO.

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Pamantasan ng Lungsod ng Maynila
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COURSE CODE: APPLIED STATISTICS FOR BUSINESS AND ECONOMICS
Semester of A.Y. 2020-2021

Introduction

Statistics is an important discipline that every student should learn -- because of its wide
application in different disciplines.

• A regular employee may wish to apply tabular representation of the company’s data so others
can easily understand his report.
• A basketball analyst wanted to know who among the players are worthy of including in his
team will need statistics.
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• Student who wish to get his average weighted average last semester will need statistical
knowledge.
• A researcher who wish to prove his beliefs on a certain phenomenon would apply statistical
inferences.
• An economist wanted to find if there is a causal relationship between the country’s population
and its poverty rate.

These among others show how statistics can be applied, solve, and simplify problems on our
Rationale
everyday lives.
Learning statistics can be the tool for someone, especially, those in the field of business and
economics since many decisions are anchored on the data that needs to be analyzed and evaluated.
These if done properly will help the managers come up with a sound decision that will help the
business and the economy achieve its objectives.

Intended Learning Outcomes

• Understand the different levels of measurement
• Differentiate each levels of measurement
• Explain the importance of determining the levels of measurement of data
• Determine the use of the levels of measurement of data

Activity (0. 5 hour)

Additional Materials
To learn more about the topic, watch and ponder on the following videos
1. Introduction to Statistics: Levels of Measurement by onlinestatbook.
https://www.youtube.com/watch?v=B0ABvLa_u88
2. Research Methods – Levels of Measurement (Nominal, Ordinal, interval, and Ratio) by tutor2u.
https://www.youtube.com/watch?v=xMxU5hh5HRM

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Discussion (1.25 hour)

Levels of Measurement

1. Nominal Measurement are words, letters, or numerical codes of qualitative data that reflect
differences in kind based on classification. Example: gender, religion, civil status, car brand.

2. Ordinal Measurement are the relative standing of ranked data that reflects differences in degree
based on order. Example: grade level of students, size of shirts.

3. Interval Measurement are the amounts or counts of quantitative data that reflect differences in
degree based on equal intervals but does not originate from zero. Example: temperature of your
sibling, IQ level.

4. Ratio are the amounts or counts of quantitative data reflecting differences in degree based on equal
intervals and has a true zero original value. Example: weight of a person, amount of money in the
bank.
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Source: Witte, Robert and John Witte (2017). Statistics. 11th edition. John Wiley & Sons, Inc.

Source: https://www.statology.org/levels-of-measurement/

Determining the level of measurement of data that a person will use is an important concept in statistics,
especially in research. This knowledge will help you determine the different statistical tools that is only
applicable to the data that you wish to evaluate.

There are two different types of inferential statistics, namely, parametric and non-parametric statistics
(these will be discussed on the latter part of the course) and using these requires a specific level of
measurement of data (aside from other assumptions, which will also be discussed in the inferential statistics
part of the course).

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The illustration below will give students an understanding the specific type of data is a requirement prior to
the application of a statistical tool.
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Source: https://www.sciencedirect.com/topics/mathematics/nonparametric-test

A data which is classified as categorical/nominal (e.g. gender, religion, etc.) is appropriate to be evaluated
using non-parametric tests (e.g. chi-square, Kruskal-Wallis, etc.). This is also true if the data is categorized
under the ordinal or rank type of data, although there are new studies suggesting that this type of data can
also be evaluated using parametric statistics (this will be further discussed in the inferential module).
Moreover, if data is categorized as discrete or continuous (interval and/or ratio) parametric statistics is the
tool to be used.

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COURSE MODULE Example of the different types of data and the appropriate statistical tool is presented below.

Exercise (0.40 hour)

Collect data categorized in your household and classify them using nominal, ordinal, interval, and ratio, 3 for
each type.

Assessment (0.10 hour)

At the end of the topic, a short 10 item exercise will be given and uploaded in MS Teams.

Evaluate as to which level of measurement will each data be classified:

a. Cellphone manufacturer
b. Gregorian calendar
c. Defining range of a generation (e.g. millennials, gen.z, gen.y)
d. Price of shoes
e. Odometer value
f. Equivalent grades (e.g. 89%, 78%, 97%)
g. Year level in high school (e.g. freshmen, junior)
h. Salary of a person

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i. Number of households in a city
j. Population in a certain place

Reflection (0.75 hour)

a. Why is there a need to classify data into four levels?

b. Is dealing with interval and ratio provides more information than nominal and ordinal? What are the
additional information you get with the former that is not found with the latter?

Resources and Additional Resources

Lind, et.al. (2019). Basic Statistics for Business and Economics. McGraw Hill.
Sirug, W. (2014). Introduction to Business Statistics,. Mindshapers Co. Inc..
Williams, T. et.al. (2010). Modern Business Statistics. Cengage
Berenson, M. et.al. (10th edition). Basic Business Statistics, CnE Publishing, Inc.
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