Introduction

Course goals
• Through studying this course, students are
Business Statistics expected to master the basic statistical
methods for business and able to settle
(Econometrics) management problems using statistical
packages such as SPSS. Meantime the
learning of this course may lay the
groundwork for future studies of advanced
statistical methods.

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Introduction Introduction

Instructor Assessment
• Jun LIN, Email: ljun@xjtu.edu.cn • Class Participation (20%)
Personal web page: ljun.gr.xjtu.edu.cn • Presentation (20%) (group project with two students)
PhD NUS & TU/e
Professor, School of Management, XJTU
• Group Project (60%) (group project with two students: no
Teaching Assistant less than 15 pages)
• Jiaqi Ye, Email: y329620170@163.com
Schedule (Room weeks 1-4: 2-3003 weeks 6-7: 2-3002)
• 19:40am-22:30pm, 9.6, 9.13, 9.20, 9.27; 19:10am-22:00pm, 10.11
• 9:00am-12:00pm, 9.7, 9.14, 9.21 , 9.28; 9:00am-12:00pm 10.12
• 9:00am-11:00pm 10.18

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Introduction Introduction
Text
Topics • Anderson D.R., Sweeney D.J., Willams T.A., Statistics:
• Introduction and Data (2 hour) Business and Economics, China Machine Press, 2020.
• Descriptive Statistics (4 hours) Chapter 1 Data and Statistics
• Econometrics and Simple Regression (5 hours) Chapter 2 Descriptive Statistics: Tabular and Graphical
• Multiple Regression (16 hours) Presentation
• Presentation (5 hours) Chapter 3 Descriptive Statistics: Numerical Measures

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 Introduction Chapter 1
Data and Statistics I need help!
Text
Applications in Business and Economics
• Wooldridge J.M., Introductory econometrics: A modern
approach, SOUTH-WESTERN Cengage Learning, 2018. Data
Data Sources
Chapter 1 The Nature of Econometrics and Economic Data
Chapter 2 The Simple Regression Model
Descriptive Statistics
Chapter 3 Multiple Regression Analysis: Estimation Statistical Inference
Chapter 4 Multiple Regression Analysis: Inference Computers and
Chapter 5 Multiple Regression Analysis: OLS Asymptotics Statistical Analysis
Chapter 6 Multiple Regression Analysis: Further Issues
Chapter 7 Multiple Regression Analysis: Qualitative Information
Chapter 8 Heteroskedasticity
Chapter 9 More on Specification and Data Issues

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Applications in Applications in
Business and Economics Business and Economics
Accounting Marketing
Public accounting firms use statistical Electronic point-of-sale scanners at
sampling procedures when conducting retail checkout counters are used to
audits for their clients. collect data for a variety of marketing
research applications.
Finance
Financial advisors use price-earnings ratios and Production
dividend yields to guide their investment A variety of statistical quality
recommendations. control charts are used to monitor
the output of a production process.

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Data and Data Sets Elements, Variables, and Observations

Data are the facts and figures collected, summarized,
analyzed, and interpreted.
The data collected in a particular study are referred
to as the data set.
The elements are the entities on which data are
collected.
A variable is a characteristic of interest for the elements.
The set of measurements collected for a particular
element is called an observation.
The total number of data values in a data set is the
number of elements multiplied by the number of
variables.

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 Data, Data Sets, Scales of Measurement
Elements, Variables, and Observations
Variables Scales of measurement include:
Element
Names Stock Annual Earn/ Nominal Interval
Company Exchange Sales($M) Share($) Ordinal Ratio

Dataram AMEX 73.10 0.86 The scale determines the amount of information
EnergySouth OTC 74.00 1.67 contained in the data.
Keystone NYSE 365.70 0.86
LandCare NYSE 111.40 0.33 The scale indicates the data summarization and
Psychemedics AMEX 17.60 0.13 statistical analyses that are most appropriate.

Data Set

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Scales of Measurement Scales of Measurement

Nominal
Data are labels or names used to identify an
attribute of the element.
A nonnumeric label or numeric code may be used.
Nominal
Example:
Students of a university are classified by the
school in which they are enrolled using a
nonnumeric label such as Business, Humanities,
Education, and so on.
Alternatively, a numeric code could be used for
the school variable (e.g. 1 denotes Business,
2 denotes Humanities, 3 denotes Education, and
so on).

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Scales of Measurement Scales of Measurement

Ordinal
The data have the properties of nominal data and
the order or rank of the data is meaningful.
A nonnumeric label or numeric code may be used.
Ordinal
Example:
Students of a university are classified by their
class standing using a nonnumeric label such as
Freshman, Sophomore, Junior, or Senior.
Alternatively, a numeric code could be used for
the class standing variable (e.g. 1 denotes
Freshman, 2 denotes Sophomore, and so on).

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 Scales of Measurement Scales of Measurement

Interval Interval
The data have the properties of ordinal data, and Example:
the interval between observations is expressed in Melissa has an SAT score of 1205, while Kevin
terms of a fixed unit of measure. has an SAT score of 1090. Melissa scored 115
points more than Kevin.
Interval data are always numeric.

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Scales of Measurement Scales of Measurement

Ratio
The data have all the properties of interval data
and the ratio of two values is meaningful.
Variables such as distance, height, weight, and time
use the ratio scale.
Ratio
Example:
Melissa’s college record shows 36 credit hours
earned, while Kevin’s record shows 72 credit
hours earned. Kevin has twice as many credit
hours earned as Melissa.

This scale must contain a zero value that indicates

that nothing exists for the variable at the zero point.

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Qualitative and Quantitative Data Qualitative Data

Data can be further classified as being qualitative Labels or names used to identify an attribute of each
or quantitative. element

Often referred to as categorical data

The statistical analysis that is appropriate depends
on whether the data for the variable are qualitative
Use either the nominal or ordinal scale of
or quantitative.
measurement

In general, there are more alternatives for statistical Can be either numeric or nonnumeric
analysis when the data are quantitative.
Appropriate statistical analyses are rather limited

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 Quantitative Data Scales of Measurement

Quantitative data indicate how many or how much: Data

discrete, if measuring how many Qualitative Quantitative

continuous, if measuring how much

Numerical Nonnumerical Numerical
Quantitative data are always numeric.

Ordinary arithmetic operations are meaningful for Nominal Ordinal Nominal Ordinal Interval Ratio
quantitative data.

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Data Sources Data Sources

Existing Sources Statistical Studies

Within a firm – almost any department
Business database services – CSMAR WIND
Government agencies - Chinese Department of Labor
Industry associations – Travel Industry Association
of China
Internet – more and more firms
In experimental studies the variables of interest
are first identified. Then one or more factors are
controlled so that data can be obtained about how
the factors influence the variables.
In observational (nonexperimental) studies no
attempt is made to control or influence the
variables of interest.
a survey is a
good example

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Data Acquisition Considerations Descriptive Statistics

Time Requirement Descriptive statistics are the tabular, graphical, and

numerical methods used to summarize data.
• Searching for information can be time consuming.
• Information may no longer be useful by the time it
is available.
Cost of Acquisition
• Organizations often charge for information even
when it is not their primary business activity.
Data Errors
• Using any data that happens to be available or
that were acquired with little care can lead to poor
and misleading information.

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 Example: Hudson Auto Repair Example: Hudson Auto Repair

The manager of Hudson Auto Sample of Parts Cost for 50 Tune-ups

would like to have a better
understanding of the cost 91 78 93 57 75 52 99 80 97 62
of parts used in the engine 71 69 72 89 66 75 79 75 72 76
tune-ups performed in the 104 74 62 68 97 105 77 65 80 109
shop. She examines 50 85 97 88 68 83 68 71 69 67 74
customer invoices for tune-ups. The costs of parts, 62 82 98 101 79 105 79 69 62 73
rounded to the nearest dollar, are listed on the next
slide.

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Tabular Summary: Graphical Summary: Histogram

Frequency and Percent Frequency
Tune-up Parts Cost
18
Parts Parts Percent
16
Cost ($) Frequency Frequency
14
50-59 2 4
12
Frequency

60-69 13 26
(2/50)100
16 32 10
70-79
7 14 8
80-89
7 14 6
90-99
10 4
100-109 5
2
50 100 Parts
50-59 60-69 70-79 80-89 90-99 100-110 Cost ($)

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Numerical Descriptive Statistics Statistical Inference

The most common numerical descriptive statistic Population - the set of all elements of interest in a
is the average (or mean). particular study
Hudson’s average cost of parts, based on the 50 Sample - a subset of the population
tune-ups studied, is $79 (found by summing the
50 cost values and then dividing by 50). Statistical inference - the process of using data obtained
from a sample to make estimates
and test hypotheses about the
characteristics of a population
Census - collecting data for a population

Sample survey - collecting data for a sample

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 Process of Statistical Inference Computers and Statistical Analysis
Statistical analysis often involves working with
large amounts of data.
1. Population
consists of all 2. A sample of 50 Computer software is typically used to conduct the
tune-ups. Average engine tune-ups analysis.
cost of parts is is examined.
unknown. Statistical software packages such as Microsoft Excel
and SPSS are capable of data management, analysis,
and presentation.

4. The sample average 3. The sample data

provide a sample
is used to estimate the average parts cost
population average. of $79 per tune-up.

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