Introduction to

STATISTICS
Statistics is the science of conducting studies
to collect, organize, summarize, analyze,
present, interpret and draw conclusions from
data.
What is data?
It is the collection of facts, concepts or
instructions in a formalized manner
suitable for communication or
processing by human.
Collection of data is known as a data
set and a single observation a data
point.
Statistics- Introduction
Most people become familiar with probability and statistics through
radio, television, newspapers, and magazines. For example, the
following statements were found in newspapers.
Based on the 2000 census, 40.5 million households have two vehicles.
The average age of top 50 powerful persons in India is decreased from 58 years in
2003 to 54 years in 2006.

The average cost of a wedding is nearly Rs 10,00,000.


Women who eat fish once a week are 29% less likely to develop heart disease.

Population
The complete collection of
measurements outcomes, object
or individual under study
Sample
A subset of a population,
containing the objects or outcomes
that are actually observed
Parameter
A number that describes a
population characteristics

Statistic
A number that describes a sample
characteristics

Basic Concepts
Data
An information coming from
observations, counts,
measurements, or responses.
The basic idea behind all statistical methods of data analysis is to make
inferences about a population by studying small sample chosen from it
Samples and Populations
Descriptive Statistics
Consists of the collection, organization,
classification, summarization, and
presentation of data obtain from the
sample.

Used to describe the characteristics of
the sample

Used to determine whether the sample
represent the target population by
comparing sample statistic and
population parameter
Inferential Statistics
Consists of generalizing from samples
to populations, performing estimations
hypothesis testing, determining
relationships among variables, and
making predictions.

Used when we want to draw a
conclusion for the data obtain from
the sample

Used to describe, infer, estimate,
approximate the characteristics of the
target population
Inferences
Consider:
Average length of females and males:
90cm and 100cm respectively.
Descriptive statistics: the values.
Inference: males are (in general) larger
than females.
An overview of descriptive statistics
and statistical inference
START
Gathering of
Data
Classification,
Summarization, and
Processing of data
Presentation and
Communication of
Summarized information
Is Information from a
sample?
Use cencus data to
analyze the population
characteristic under study
Use sample information
to make inferences about
the population
Draw conclusions about
the population
characteristic (parameter)
under study
STOP
Yes
No
Statistical
Inference
Descripti
ve
Statistics
Statistical
Inference
Descriptive
Statistics
No
Yes
Data Collection
Collect data
e.g. Survey
Present data
e.g. Tables and graphs
Characterize data
e.g. Sample mean =
Mean weight is 120 pounds
i
X
n

Types of data
Qualitative/ Categorical and
Quantitative/Numerical
Nominal, Ordinal, Interval and Ratio
Discrete
--Nominal and ordinal
Continuous
-- Interval and ratio
Cross-sectional , Temporal and Spatial



Data Types
Data
Qualitative Quantitative Data Types
Nominal Ordinal Interval Ratio
Levels of
Measurement
Discrete
Discrete or continuous
Qualitative/ Categorical
variables
Here, data are classified on the basis
of some attribute or quality such as
gender, literacy, religion, employment
etc.
These attributes under study cannot
be measured.
One can only find out whether it is
present or absent in the units of
population under study.
Example
Attribute under study blindness
Here, we can determine how many
persons are blind in a given population.
It is not possible to measure the degree
of blindness in each case.
Attributes can be:
Gender (Males and females)
Literacy (literates and illiterates)
Employment (employed and
unemployed)
Two types of categorical
variables
Nominal
Ordinal

Nominal data
Nominal data are the labels or
assigned numbers.
Car number
Roll number
STD code
Color of bike
House number
Such data are used for identifying
individuals and places .

Ordinal data
Ordinal data can be arranged in
order such as worst to best or best
to worst
Same as nominal but there is an order
within the groups into which the data
is classified.
Unable to say by how much they differ
from each other.
-- Rating of hotels, restaurants and
movies.
Quantitative/Numerical
variables
Here, the data are classified on the
basis of some characteristics capable
of quantitative measurements such as:
Marks scored by students in class
Height of individuals
Income of individuals
Age of individuals
Expenditure of individuals
Two types of Quantitative
variables
Interval data
Ratio data

Quantitative variables can be discrete
or continuous.

Interval data

Interval data can be on a numerical
scale .
zero point does not mean absence
of property.
Temperature
Ratio data
It possess all the properties of
interval data with meaningful ratio of
two values
Ratio data differ from interval data in
that there is a definite zero
point(nothing exists for the variable at
zero point)
Height
Weight
Price
Length
Sales revenue


Discrete variables
The variables is said to be discrete if
it assumes only some specific values.
Discrete variables arises in a
situation where counting is
involved.
number of credit cards held by an
individual
number of defective items in boxes of
100 items
number of students in the class

Continuous variables
Continuous variables arises in
situations when some sort of
measurement is involved in range.
life of an electric bulb
waiting time for customers at a banks
counter.
rainfall
temperature


The ABC Marketing Corporation has asked you for information
about the car you drive. For each question, identify each of the types
of data requested as either Qualitative data or Quantitative data.
When numeric data is requested, identify the variable as discrete
or continuous.

1. What is the weight of your car?
2. In which city was your car made?
3. How many people can be seated in your car?
4. Whats the distance traveled from your home to your school?
5. Whats the color of your car?
6. How many cars are in your household?
7. Whats the length of your car?


Case Let
Levels of Measurement
Level Put in
categories
Arrange
in order
Subtract
values
Divide
values
Nominal Yes No No No
Ordinal Yes

Yes No No
Interval Yes Yes Yes No
Ratio Yes Yes Yes Yes
Cross-sectional Data
Cross-sectional data comprises of a variable recorded
over at the same point or period of time for many
individuals , organization, places etc.

Ages of all students at the time of joining IMS , in
the year 2008.
Number of students enrolled in IIM, in the year
2008.
Stock prices of Infosys Technologies, TCS, and
Wipro on31
st
March 2008.
Population of Delhi, Mumbai , Chennai and
Kolkata as per 2001 census.


Temporal Data
Temporal data also referred as time-series
data , is the data about an individual
organization , places etc over a period of time.
Marks obtained by student from standard I
to XII.
Total business of ICICI bank as at the
end of last five years.
Population of India from the year 1931 to
2001


Spatial Data
Spatial data is the data based on
geographical location basis.
Income tax collection from various
states
Sales of Times Of India in Delhi.
Production of wheat in different states
of the country


Data Collection Techniques
Method of Data
Collection
Data collected and
recorded by
others(secondary
study)
Data collected directly
from the field of
enquiry(primary data)

Primary Data
Data originally collected in the process of
investigations are known as primary
data.
Primary data consists of figures collected
at first hand in order to satisfy the
purpose of a particular statistical enquiry.
Merits :
Original in nature
More reliable and accurate
Can be used with greater confidence bz the
enquirer knows its origin.
Exactly matches the needs of the project.
Demerits :
Expensive
Time-consuming
Collection of data involves creating new
definitions and measuring instruments
such as questionnaires or interview forms
and training people to use these
specifically designed instruments.
Data Collection Techniques
Collection of
Primary Data
Mailed Questionnaire
Method
Direct Personal
Investigation
Indirect Oral
Observation
Observation Interview
Schedule Sent
Through Investigator
Collection of primary data
Direct personal investigation
Personal interview ( the investigator personally
approaches each informant and gathers the
required information)
Personal observation ( here, rather than asking
anybody, the investigator personally observes
and records the information related to a particular
field)
Indirect oral observation (here, instead of
directly approaching the actual field or
person, data are collected from third party
informant)
Questionnaire method ( here, a well-
prepared questionnaire is given to a list of
persons with the request to return them duly
filled in)
Designing a Questionnaire
The no. of questions should be as few as
possible
Questions should be of objective type.
Yes or no type or simple tick marking
answers are preferred.
Questions should be properly arranged
to have a systematic and easy flow of
answer.
Questions affecting the sentiment and
pride of the respondent should be
avoided.
Necessary instructions and guidelines
should be provided to make it easy for
the respondent to answer.
Types of Questionnaires
Structured or Non structured
questionnaire.
Disguised and Non disguised
questionnaire.
Structured or Non structured
questionnaire
Structured questionnaire : consists of a set of
questions arranged in a predetermined order .
Each question requires the respondent to make
a choice among a few given predetermined
responses.
Example :
How frequently do you go to watch a movie?
Choices (Very frequently, often, sometimes,
never)
Such questions are called closed questions.
Non Structured questionnaire : consists of
what are called open-ended questions.
Example:
How do you spend your free time?
How do you describe the ambience of the
new store?
Such questions give the respondent
freedom to answer according to their views
and opinions.
Disguised and Non disguised
questionnaire
Non disguised questionnaire: here, the
purpose or objectives of the study are made
known to the respondent.
Disguised questionnaire: here, respondents are
not taken into confidence regarding purpose or
objectives of the study.
Disguised questionnaire is not very popular as
respondents may not be forthcoming in their
answers when they do not know the objectives
or relevance of the questions or the study.
Secondary data
Secondary data consists of figures
which were collected originally to
satisfy a particular enquiry but now are
being used for different enquiry.
Sources of secondary data:
Journals
Reports
Government and non-Government
publications.
Data Collection Techniques
41 41
Collection of
Secondary Data
Journals,
News-
papers

Publication
by
Government /
International
Organization
Universities
and
Research
Organizations
Books Internet
Merits :
Readily available
Less expensive compared to primary data
Less time consuming compared to primary
data
Demerits :
These may not be relevant in the present
context.
These may not have the needed accuracy or
reliability.
These may not be adequate.
Types of secondary data
Internal or external
Internal
Company Reports , Intranet
External
Newspaper, magazines, websites, RBI
publications
The two major areas of statistics are descriptive and
inferential.

When the populations to be studied are large, statisticians
use subgroups called samples.

Data can be classified as qualitative or quantitative.

The four basic types of measurement are nominal, ordinal,
interval, and ratio.

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Summary