Introduction to Statistics Sample
Statistics is the branch of
mathematics that transforms
numbers into useful information for
decision makers. Statistics lets you
know about the risks associated with
making a business decision and
allows you to understand and reduce
the variation in the decision-making
process.
I. Statistics in Business
Descriptive statistics
- the methods that help collect,
summarize, present, and analyze a
set of data.
Inferential statistics
- the methods that use the data
collected from a small group to draw
conclusions about a larger group.
II. Vocabulary of Statistics
Variable
- a characteristic of an item or
individual.
Data
- the different value associated with a
variable
Operational Definitions
-Data values are meaningless unless
their caribales have operational
definitions, universally accepted
meaning that are clear to all
associated with an analysis.
~ shows how the research use the
word.
Population
- consists of all the items or
individual about which you want to
draw a conclusion.
Continuous variables
- portion of population selected for
analysis
Parameter
- measurement used to describe the
population.
Statistics
- measurement used to describe the
sample
III. Identifying Types of Variables
Categorical variables
(known as qualitative variables)
have values that can only be placed
into categories such as yes and no.
* “Do you currently own bonds?” (yes
or no) and the level of risk of a bond
fund (below average, average, or
above average)
Numerical variables
(known as quantitative variables)
have values that represent
quantities. Identified as being either
discrete or continuous variables.
Discrete variables
have numerical values that arise
from a counting process.
* “The number of premium cable
channels subscribed to”
~ because the response is one of a
finite number of integers. You
subscribe to zero, one, two, or more
channels.
* “The number of items purchased”
~ because you are counting the
number of items purchased.
produce numerical responses that
arise from a measuring process.
* The time you wait for teller service
at a bank
~ because the response takes on
any value within a continuum, or an
interval, depending on the precision
of the measuring instrument. Your
waiting time could be 1 minute, 1.1
minutes, depending on the precision
of the measuring device used.
Measurement Scales
Nominal scale
Classifies data into distinct
categories in which no ranking is
implied.
The weakest form of measurement
because you cannot specify any
ranking across the various
categories.
Ordinal scale
Classifies values into distinct
categories in which ranking is
implied.
Interval scale
- ordered scale in which the
difference between measurements is
a meaningful quantity but does not
involve a true zero point and can
present value below zero.
* A noontime temperature reading of
67 degrees Fahrenheit is 2 degrees
warmer than a noontime reading of
65 degrees.
Ratio scale
ordered scale in which the difference
between the measurements involves
a true zero point, as in height,
weight, age, or salary measurements
* A person who weighs 240 pounds
is twice as heavy as someone who
weighs 120 pounds
Chapter 3.1 Central Tendency
The three measures of central
tendency.
I. Mean (Arithmetic Mean)
- the only common measure in which
all the values play an equal role.
- serves as a “balance point” in a set
of data.

II. Median
- the middle value in an ordered
array of data that has been ranked
from smallest to largest.
- not affected by extreme values, so
you can use the median when
extreme values are present.
Rule 1 If the data set contains an
odd number of values, the median is
the measurement associated with
the middle-ranked value.
Rule 2 If the data set contains an
even number of values, the median
is the measurement associated with
the average of the two middle-ranked
values.
III. Mode
the value in a set of data that
appears most frequently.
- extreme values do not affect the
mode. Often, there is no mode or
there are several modes in a set of
data.
Chapter 3.2 Variation and Shape
Variation measures the spread, or
dispersion, of values in a data set.
I. Range
- simplest numerical descriptive
measure of variation in a set of data.
- measures the total spread in the
set of data.
- It does not indicate whether the
values are evenly distributed
throughout the data set, clustered
near the middle, or clustered near
one or both extremes. Thus, using
the range as a measure of variation
when at least one value is an
extreme value is misleading.
II. Variance and Standard
Deviation
Sum of squares (SS)
- One measure of variation that
differs from data set to data set
squares the difference between each
value and the mean and then sums
these squared differences.
III. Coefficient of Variation
- a relative measure of variation that
is always expressed as a percentage
rather than in terms of the units of
the particular data. The coefficient of
variation, denoted by the symbol CV,
measures the scatter in the data
relative to the mean.
*
IV. Z- score
Extreme value or outlier: a value
located far away from the mean.
Values located far away from the
mean will have either very small
(negative) Z scores or very large
(positive) Z scores.
Z-score: Useful in identifying
outliers. It is considered an outlier if it
is less than -3.0 or greater than +3.0
V. Shape
- the pattern of the distribution of
data values throughout the entire
range of all the values. A
distribution is either symmetrical or
skewed. Shape also can influence
the relationship of the mean to the
median. In most cases:
Panel A: are negative, or left-
skewed. In this panel, most of the
values are in the upper portion of the
distribution. A long tail and distortion
to the left is caused by some
extremely small values. These
extremely small values pull the mean
downward so that the mean is less
than the median.
Panel B: are symmetrical. Each half
of the curve is a mirror image of the
other half of the curve. The low and
high values on the scale balance,
and the mean equals the median.
Panel C: are positive, or right-
skewed. In this panel, most of the
values are in the lower portion of the
distribution. A long tail on the right is
caused by some extremely large
values. These extremely large values
pull the mean upward so that the
mean is greater than the median.
Skewness statistic: measures the
extent to which a set of data is not
symmetric.
Kurtosis statistic: measures the
relative concentration of values in the
center of the distribution of a data
set, as compared with the tails.
A symmetric distribution has a
skewness value of zero. A right-
skewed distribution has a positive
skewness value, and a left-skewed
distribution has a negative skewness
value.
A bell-shaped distribution has a
kurtosis value of zero. A distribution
that is flatter than a bell-shaped
distribution has a negative kurtosis
value. A distribution with a sharper
peak (one that has a higher
concentration of values in the center
of the distribution than a bell-shaped
distribution) has a positive kurtosis
value.
Chapter 4: Statistical Tools
I. Correlational Research Tools
1. Involves hypothesis testing:
a. Hypothesis of relationship
a.1 Pearson R correlation:
parametric data
a.2 Kendall’s tau B; Spearman’s
rho; or chi-square: non-parametric
data
b. Hypothesis of Difference
b.1 Paired T-test: comparing a pair
of variables (interval or ordinal)
b.2 Independent samples t-test:
comparing a variable (interval or
ratio) with a nominal variable with
two categories only.
b.3 One-way ANOVA: comparing a
variable (interval or ratio) with a
nominal variable with at least 3 or
more categories.
2. Factor analysis: to know which
factor/variables are valued by the
respondents; to know which
variables are important and the
unimportant will be eliminated.
3. Multiple Regression Analysis
(MRA): to know which of the
variables would explain or predict a
particular variable.
4. Cluster Analysis: to know how to
group the respondents based on
their preferences and profile them by
cross-tabulating their demographic
data.
5. to know how to measure the
perception of the respondents and
show the result visually though
perceptual map.
a. Multidimensional scaling (MDS):
if the data is based on paired
comparison (interval or ratio).
b. Multidimensional Unfolding
(MDU): if the data are based on
ranking (ordinal).
c. Correspondence analysis: if the
data are based on multiple options
(nominal).
6. Conjoint Analysis: to determine
which in the list of valued factors
would result into the best
combination for the respondents to
choose from.
II. Causal research tool
1. Confirmatory Factor Analysis
- to test the existing theoretical
framework and validate its
measurement variables for research
application.
2. If the problem is complex and
characterized complex use:
Covariance-based structural Random Sampling
equation modeling (CB-SEM) - generalize the result across the
- for theory testing and confirmation population
Partial Least Squares Structural Types of Random Sampling
Equation Modeling (PLS-SEM) 1. Simple random sampling
- for prediction and theory - contain sampling Frame
development. Sampling Frame
- list of target population and must
have 20% allowance for non-
participation.
III. Sampling plan 2. Stratified random sampling
Undergraduate: 100 respondents - the target population has natural
(9.87% margin of error and 68.3% groupings and some groups have
confidence level) more respondents than the other
Graduate: 377 respondents 5% group.
margin of error and 95% confidence
level) 3. Poisson Distribution
- the population is unknown
Sampling size formula: - the presence of enumerator
1. Slovin’s Formula (population is (research assistant) is needed and a
known) sampling procedure.
n= # of samples Chapter 5
N = total population Type of Question
e = error tolerance I. Descriptive: simply describing
Type of Data
2. Cochran’s formula (population is 1. Nominal/ Ordinal
unknown) - Frequency Distribution
2. Interval/ Ratio
n= # of samples - Mean and Standard Deviation
Z = value from the normal distribution
table corresponding to desired level II. Correlational: asking for
of confidence (95%), which is 1.96 relationship
p(1-p) = maximum data variability Is there dependence?
= .50(1-.50) = .25 Yes: Regression Analysis
e = margin of error (prediction)
No: Type of Data
Purposive Sampling 1. Interval/Ratio: Pearson
- to determine the target market for a 2. Ordinal: Spearman
particular organization. 3. Nominal: Chi-square
- qualifying the respondents, then
selecting once qualified by the quota III. Comparative
method. Type of Data
1. Nominal/Ordinal: Chi-square
2. Interval/ Ratio: How many to be
compared?
If 1: One Sample t-test
If 2: Coming from …?
Same sample: Paired Sample T-test
Different Sample: Independent
Sample T-test
If 3 or more: One-way ANOVA
Descriptive Research Measuring
Tools
1. Descriptive Statistics
- consist of central tendency,
variation, and shape.
Skewness ratio and Kurtosis ratio
should fall within the critical values of
±2.58 (0.01 significance level).
Formula:
Skewed Ratio = skewness/standard
error of skewness
Indicator
Skewed to the left: less than -2.58
Normally skewed: within ±2.58
Skewed to the right: greater than
+2.58
Kurtosis Ratio = kurtosis/standard
error of kurtosis
Indicator
Platykurtic: less than -2.58
Mesokurtic: within ±2.58
Leptokurtic: greater than +2.58
2. Frequency Table
3. Charts
4. Mean interpretation table
Level of Interpretation
Formula: (n-1)/n, where n = # of point
score in a scale.
II. Correlational
Hypothesis
Alternative: There is a significant
(either relationship or difference)
Null: There is no significant (either
relationship or difference)
p-value = greater than 0.05 – there is
no significance; Ho is accepted.
P-value = equal or less than 0.05 –
there is significant, Ho is rejected.
1. Pearson
Table of Correlations Interpretation
Range of
Coefficient Description
From To
± 0.81 ± 1.00 Very Strong
± 0.61 ± 0.80 Strong
± 0.41 ± 0.60 Moderate
± 0.21 ± 0.40 Weak
± 0.00 ± 0.20 Weak to No
Correlation
Interpretation Format:
Based on the correlation table, it can
be noted that the P-value are all
0.000 between two variance; two
variance; and so on. These imply
that the variables are significantly
related to each other. Furthermore,
the coefficient values are found to
be: (value of Pearson correlation) of
two variance; and so on. Based on
Table of Correlations Interpretation,
the results signify (description
according to range of coefficient)
between the variable tested.
Note: categorize the interpretation
according to the table of correlations.
2. Paired Sample T-test
Interpretation:
Based on the null hypothesis there
(is or is no) significant difference
between two variances, the result
shows that the P-value (value of Sig.
2-tailed (is or is not) significant.
Thus, the null hypothesis is (rejected
or accepted).
3. Independent Sample T-test
Interpretation:
The result of the analysis shows that
the mean variance for nominal
variable is value of mean, which is
(lesser or greater) than he 2nd
nominal variable with mean = ().
Based on Levene’s test for equality
of variance, the F test (is or is not)
significant for equal variances
assumed. Thus, the null hypothesis
for equal variance assumed (should
be rejected or cannot be rejected).
When tested for t-test for Equality of
Means significance, it is revealed
that their variable (does or does not)
significantly differ (P-value =
unknown). This means that the two
variance (have or have not) relatively
the same level of variable.