School of Business

Department of Economics

BSTA100- Essentials of Statistics

Chapter 1 | Part 3

The Nature of Probability and Statistics

Fall 2020 - 2021

BSTA100- Chapter 1
 Outline
1–3 Data Collection and Sampling Techniques
⚫ Data Collection
⚫ Sampling Techniques
- Random sampling
- Systematic Sampling
- Cluster Sampling
- Stratified Sampling
1–4 Observational and Experimental Studies
⚫ Observational Studies
⚫ Experimental Studies

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 1-3 Data Collection
Data can be collected in a variety of ways. One of the most common
methods is using surveys. The table below represents the advantages
and disadvantages of 4 different survey methods.
Survey Method Advantages Disadvantages

Telephone • Less costly • Moderately expensive

• More candid (no face-to-face • Fewer people will answer the phone
contact) (lower response rate)
• Interviewer quality and tone may
affect the research results

Mail • Inexpensive (cover wider • Little control over who participates

geographic area)
• Respondents can remain
anonymous
• Low response rate
• Inappropriate answers to questions
• Difficulty reading or understanding
the questions
• Data collects take longer

Personal • Great for capturing in-depth • Interviewer quality may affect

details
• Great control over who
participates
• Quick, timely data collection
• Good response rates
research results (interviewers
should be properly trained and
should not be biased)
• Very expensive

Online • Quick, timely data collection • Little control over who participates
• Inexpensive • Misses people who aren’t online
• Low cost to continue data
collection until desired
response rates are achieved

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 1-3 Sampling Techniques
There are four basic methods of sampling: random, systematic, stratified,
and cluster sampling.

Random Sampling- Subjects are selected by using random numbers.

⚫ generate random numbers with a computer/ obtain random numbers
from tables.

Systematic Sampling- Subjects are selected by using the kth number

after the first subject is randomly selected from 1 through k.
Example: a company is auditing a firm’s invoices. Suppose
there were 2000 invoices and a sample of 50 invoices were
needed. Since 2000/ 50 =40, then k =40. First invoice randomly
selected then ever 40th invoice is selected.
Example: a researcher may select every tenth item from an
assembly line to test for defects.

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 1-3 Sampling Techniques
Stratified Sampling- Subjects are obtained by dividing the population
into groups (called strata) according to some characteristic, then subjects
are randomly selected within groups.
Example: to learn how intermediate level students feel about a
certain issue at school, we randomly select students from each
group in the intermediate level (grade 6, 7, 8 and 9) to use in
the sample.

Cluster Sampling- Subjects are selected by dividing the population into

groups called clusters, then the researcher randomly selects some of
these clusters and uses all members of the selected clusters as the
subjects of the samples. Mostly used when population is large or spread
over large geographic area.
Example: if one wanted to do a study involving the patients in
the hospitals in Beirut, few hospitals could be selected at
random, and the patients in these hospitals would be
interviewed in a cluster.

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 Example (5)
Classify each sample as random, systematic, stratified, or cluster.

a. In a large school district, all teachers from two buildings are

interviewed to determine whether they believe the students have less
homework to do now than in previous years.
b. Every seventh customer entering a shopping mall is asked to select
her or his favorite store.
c. Nursing supervisors are selected using random numbers to determine
annual salaries.
d. Mail carriers of a large city are divided into four groups according to
gender (male or female) and according to whether they walk or ride on
their routes. Then 10 are selected from each group and interviewed to
determine whether they have been bitten by a dog in the last year.

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 Example (5)
Classify each sample as random, systematic, stratified, or cluster.

a. In a large school district, all teachers from two buildings are

interviewed to determine whether they believe the students have less
homework to do now than in previous years.
Cluster Sampling
b. Every seventh customer entering a shopping mall is asked to select
her or his favorite store.
Systematic Sampling
c. Nursing supervisors are selected using random numbers to determine
annual salaries.
Random Sampling
d. Mail carriers of a large city are divided into four groups according to
gender (male or female) and according to whether they walk or ride on
their routes. Then 10 are selected from each group and interviewed to
determine whether they have been bitten by a dog in the last year.
Stratified Sampling

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 1-4 Observational Studies
In an observational study, the researcher merely observes what is happening or
what has happened in the past and tries to draw conclusions based on these
observations.
⚫ It usually occurs in a natural setting.
Example: researchers can observe people’s driving patterns on
streets and highways in large cities.
⚫ Used in studies were variables cannot be manipulated by the researcher
Example: studying drug users versus nondrug users.
⚫ Done in situations where it is unethical or dangerous to do an experiment
Example: suicides, rapes

Observational studies have disadvantages:

⚫ A definite cause-and-effect situation cannot be shown since other factors may
have had an effect on the results.
⚫ Can be expensive and time-consuming. For example study the habitat of lions in
Africa.
⚫ The results could be subject to the inaccuracies of those who collected the data.

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 1-4 Experimental Studies
In an experimental study, the researcher manipulates one of the variables and
tries to determine how this influences other variables.
⚫ The independent variable is the one that is being manipulated by the
researcher.
⚫ The resultant variable is called the dependent variable. It is the variable
that is studied to see if it has changed significantly due to the manipulation of
the independent variable.
⚫ The researcher can decide how to select subjects and how to assign them to
specific groups.
There are several disadvantages to experimental studies.
⚫ They may occur in unnatural settings, such as laboratories and special
classrooms →the results might not apply to the natural setting. “This
mouthwash may kill 10,000 germs in a test tube, but how many germs will it
kill in my mouth?”
⚫ Hawthorne effect, the subjects who knew they were participating in an
experiment actually changed their behavior in ways that affected the results
of the study.

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 For practice solve worksheet 1
problems 6, 7 and 8

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