Mathematics & Statistics

Lecture 1

Dr. Sarah Waqquas

International Study Center, University of Strathclyde,
sarah.waqquas@strath.ac.uk

These materials are altered ones from copyrighted lecture slides ( 2009 W.H.
Freeman and Company) from the homepage of the book:
The Practice of Business Statistics Using Data for Decisions :Second Edition
by Moore, McCabe, Duckworth and Alwan.

Introduction
What is statistics? Use of data
Population and sample
Types of variables
Graphical display of data
Numerical summeries of data
Obtaining data

What is statistics? Use of data

Science of Statistics provides collection of methods and tools for collection,
organization, analysis, interpretion and presention of data that are usually
numerical figures.
The goal of statistics is to gain understanding of the phenomenon from data.
Therefore we use data to understand the phenomenon

Collection (design): planning how to gather data

Presentation (description): summerizing data
Analysis and interpretation (inference): making prediction based on data

Population and sample

Popuation is the collection of all the individuals/items under study.
Sample is a subcollection (a part) individuals/items of the population.
Eg: If we study the life age structure of the Glaswegians then
Population: all the Glaswegians
A sample: all the Glaswegians living in the UK
Parameter: a parameter is a numerical summary of the population.
Statistic: a numerical summary of a data sample.
when parameters are not known they are estimated by corresponding
sample statistics

Population versus sample

Population: The entire group

of individuals in which we are
interested but cant usually
assess directly.

Sample: The part of the

population we actually examine
and for which we do have data.
How well the sample represents
the population depends on the
sample design.

Example: All humans, all

working-age people in
Glasgow, all crickets
Population

Sample

A parameter is a number
describing a characteristic of
the population.

A statistic is a number
describing a characteristic of a
sample.

Variables
In a study, we collect informationdatafrom individuals/items. They
can be people, animals, plants, or any object of interest.
A variable is any characteristic of an individual/item.
A variable usually varies among individuals/items.
Example: age, height, blood pressure, ethnicity, leaf length, first language

The distribution of a variable tells us what values the variable takes

and how often it takes these values.

Two types of variables

Variables can be either quantitative

Something that takes numerical values for which arithmetic operations

such as adding and averaging make sense

Example: How tall you are, your age, your blood cholesterol level, the
number of credit cards you own

or categorical (qualitative).

Something that falls into one of several categories. What can be counted
is the count or proportion of individuals/items in each category.

Example: Your blood type (A, B, AB, O), your hair color, your ethnicity,
whether you paid income tax last tax year or not

How do you know if a variable is categorical or

quantitative?
Ask:
What are the n individuals/units in the sample (of size n)?
What is being recorded about those n individuals/units?
Is that a number ( quantitative) or a statement ( categorical)?
Categorical

Quantitative

Each individual is
assigned to one of
several categories.

Each individual is
attributed a
numerical value.

Individuals
in sample

DIAGNOSIS

AGE AT DEATH

Patient A

Heart disease

56

Patient B

Stroke

70

Patient C

Stroke

75

Patient D

Lung cancer

60

Patient E

Heart disease

80

Patient F

Accident

73

Patient G

Diabetes

69

Two types of variables

1.Qualitative (Categorical) : Measuremnet scale is a set of categories.
1. Nominal: unordered categories
[discrete]
(residence
{Edinburgh, Glasgow, London} )
2. Ordinal: ordered categories
[discrete]
( income
{Lower, Middle, Upper} )
2.Quantitative: Measurement scale has numerical values and they represent the
magnitude of the variable
1. Interval: has a numerical distance between values
(prison term
{<5, 510, 1015, 1520, 20>}
or number of times married
{0, 1, 2, 3, 4, >5})
2. Continuous: Weight
Variables are either
1. Discrete: has a set of separate numbers (number of children)
(values cannot be subdivided) or
2. Continuous: has infinite continuum of real numbers (weight)
(between any two possible values, there re many possible values)

Displaying distributions/data
with graphs
Ways to chart categorical
data
(Graphical
summary
of data)

Bar graphs

Pie charts

Ways to chart quantitative data

Histograms

Interpreting histograms

Stemplots

Stemplots versus histograms

Time plots

Ways to chart categorical data

Because the variable is categorical, the data in the graph can be
ordered any way we want (alphabetical, by increasing value, by year,
by personal preference, etc.)

Bar graphs
Each category is
represented by
a bar.

Pie charts
The slices must
represent the parts of one whole.

Bar graphs
Each category is represented by one bar. The bars height shows the count (or
sometimes the percentage) for that particular category.

Accidents involving Firestone tire models

Bar graph sorted by rank (Pareto Chart)
Easy to analyze

Sorted alphabetically
Much less useful

Pie charts
Each slice represents a piece of one whole. The size of a slice depends on what
percent of the whole this category represents.

Child poverty before and after

government intervention
UNICEF, 1996
What does this chart tell you?
The United States has the highest rate of child
poverty among developed nations (22% of under 18).

Its government does the leastthrough taxes and

subsidiesto remedy the problem (size of orange
bars and percent difference between orange/blue
bars).

Could you transform this bar graph to fit in 1 pie

chart? In two pie charts? Why?

The poverty line is defined as 50% of national median income.

Ways to chart quantitative data

Histograms and stemplots

These are summary graphs for a single variable. They are very useful to
understand the pattern of variability in the data.

Line graphs: time plots

Use when there is a meaningful sequence, like time. The line connecting the
points helps emphasize any change over time.

Histograms
The range of values that a
variable can take is divided
into equal size intervals.
The histogram shows the
number of individual data
points that fall in each
interval.
Example: Histogram of the
December 2004 unemployment
rates in the 50 states and
Puerto Rico.

Interpreting histograms
When describing the distribution of a quantitative variable, we look for the
overall pattern and for striking deviations from that pattern. We can describe the
overall pattern of a histogram by its shape, center, and spread.

Histogram with a line connecting

each column too detailed

Histogram with a smoothed curve

highlighting the overall pattern of
the distribution

Most common distribution shapes

Symmetric
distribution

A distribution is symmetric if the right and left sides

of the histogram are approximately mirror images of
each other.

A distribution is skewed to the right if the right

side of the histogram (side with larger values)
extends much farther out than the left side. It is
skewed to the left if the left side of the histogram

Skewed
distribution

extends much farther out than the right side.

Complex,
multimodal
distribution

Not all distributions have a simple overall shape,

especially when there are few observations.

Outliers
An important kind of deviation is an outlier. Outliers are observations
that lie outside the overall pattern of a distribution. Always look for
outliers and try to explain them.

The overall pattern is fairly

symmetrical except for 2
states clearly not belonging
to the main trend. Alaska
and Florida have unusual
representation of the
elderly in their population.
A large gap in the
distribution is typically a
sign of an outlier.

Alaska

Florida

How to create a histogram

It is an iterative process try and try again.
What bin size should you use?

Not too many bins with either 0 or 1 counts

Not overly summarized that you loose all the information

Not so detailed that it is no longer summary

rule of thumb: start with 5 to10 bins

Look at the distribution and refine your bins
(There isnt a unique or perfect solution)

Histogram of Drydays in 1995

IMPORTANT NOTE:
Your data are the way they are.
Do not try to force them into a
particular shape.

It is a common misconception
that if you have a large enough
data set, the data will eventually
turn out nice and symmetrical.

Stemplots (Stemandleaf plots)

How to make a stemplot:
1)

Separate each observation into a stem, consisting of

all but the final (rightmost) digit, and a leaf, which is
that remaining final digit. Stems may have as many
digits as needed, but each leaf contains only a single
digit.

2)

Write the stems in a vertical column with the smallest

value at the top, and draw a vertical line at the right of
this column.

3)

Write each leaf in the row to the right of its stem, in

increasing order out from the stem.

STEM

LEAVES

Stemplot

To compare two related distributions, a back-to-back stemplot with

common stems is useful.

Stemplots do not work well for large datasets.

When the observed values have too many digits, trim the numbers
before making a stemplot.

When plotting a moderate number of observations, you can split

each stem.

Stemplots of the December 2004

unemployment rates in the 50 states.
(b) uses split stems.

Stemplots versus histograms

Stemplots are quick and dirty histograms that can easily be done by
hand, therefore very convenient for back of the envelope calculations.
However, they are rarely found in scientific or laymen publications.

Line graphs: time plots

In a time plot, time always goes on the horizontal, x axis.
We describe time series by looking for an overall pattern and for striking
deviations from that pattern. In a time series:

A trend is a rise or fall that

persists over time, despite
small irregularities.

A pattern that repeats itself at

regular intervals of time is
called seasonal variation.

Retail price of fresh

oranges over time

Time is on the horizontal, x axis.

The variable of interesthere
retail price of fresh oranges
goes on the vertical, y axis.

This time plot shows a regular pattern of yearly variations. These are seasonal
variations in fresh orange pricing most likely due to similar seasonal variations in
the production of fresh oranges.
There is also an overall upward trend in pricing over time. It could simply be
reflecting inflation trends or a more fundamental change in this industry.

A time plot can be used to compare two or more

data sets covering the same time period.
1918 influenza epidemic
Date
# Cases # Deaths

0
0
130
552
738
414
198
90
56
50
71
137
178
194
290
310
149

10000
9000
10000
8000
9000
7000
8000
6000
7000
5000
6000
4000
5000
3000
4000
2000
3000
2000
1000
1000 0

800

800 700
700 600
600 500
500 400
400 300
300 200
200 100
100 0
0

# Cases

# deaths reported

36
531
4233
8682
7164
2229
600
164
57
722
1517
1828
1539
2416
3148
3465
1440

# cases diagnosed

week 1
week 2
week 3
week 4
week 5
week 6
week 7
week 8
week 9
week 10
week 11
week 12
week 13
week 14
week 15
week 16
week 17

# Deaths

The pattern over time for the number of flu diagnoses closely resembles that for the
number of deaths from the flu, indicating that about 8% to 10% of the people
diagnosed that year died shortly afterward from complications of the flu.

Scales matter

Death rates from cancer (US, 1945-95)

Death rate (per

thousand)

Death rates f rom cancer (US, 1945-95)

250
200
150
100
50
0
1940

1950

1960

1970

1980

1990

250
Death rate (per thousand)

How you stretch the axes and choose your scales

can give a different impression.

200
150
100
50
0
1940

2000

1960

1980

2000

Years

Years

Death rates from cancer (US, 1945-95)

250

Death rates from cancer (US, 1945-95)

220

Death rate (per thousand)

Death rate (per thousand)

200

150

100

50

0
1940

1960
Years

1980

2000

A picture is worth a
thousand words,

200

BUT

180
160
140
120
1940

1960

1980
Years

2000

There is nothing like hard

numbers.
Look at the scales.

Describing distributions/data
with numbers (Numerical
summary
of
data)
Measures of center
(central
location): mean, median, mode

Comparing mean, median and mode

Measures of spread: range, interquartile range, standard

deviation,

Five-number summary and boxplots

Choosing measures of center and spread

Measure of center : the mean

The mean or arithmetic average
To calculate the average, or mean, add
all values, then divide by the number of
individuals. It is the center of mass.

Sum of heights is 1598.3

divided by 25 women = 63.9 inches

58.2
59.5
60.7
60.9
61.9
61.9
62.2
62.2
62.4
62.9
63.9
63.1
63.9

64.0
64.5
64.1
64.8
65.2
65.7
66.2
66.7
67.1
67.8
68.9
69.6

x1 x2 ... xn
x
n
Example: Mean earnings
of Black females

1 n
x xi
n i 1
262,934
x
$17,528.93
15

Measure of center: the

The median is the midpoint of a distributionthe number such
median
that half of the observations are smaller and half are larger.
1. Sort observations by size.
n = number of observations
______________________________
2.a. If n is odd, the median is
observation (n+1)/2 down the list
n = 25
(n+1)/2 = 26/2 = 13
Median = 3.4
2.b. If n is even, the median is the
mean of the two middle observations.
n = 24
n/2 = 12
Median = (3.3+3.4) /2 = 3.35

Measure of center : the Mode

The mode is the most frequent observation
Data: 5, 7, 6, 7, 6, 6, 4, 6, 5, 4
Mode is 6

Comparing the mean, the median and

the
mode
The mean
and the median are the same only if the distribution is
symmetrical. The median is a measure of center that is resistant to
skew and outliers. The mean and mode are not.

Mean, median and mode

for a symmetric distribution

Mean
Median
Mode

Left skew

Mean
Median
Mode

Mean, median and mode

for skewed distributions

Mean
Median
Mode

Right skew

Mean and median of a distribution with

outliers

Percent of people dying

x 3.4

x 4 .2
Without the outliers
With the outliers

The mean is pulled to the

The median, on the other hand,

right a lot by the outliers

is only slightly pulled to the right

(from 3.4 to 4.2).

by the outliers (from 3.4 to 3.6).

Impact of skewed data

Mean and median of a symmetric

Disease X:

x 3.4
M 3 .4

Mean and median are the same.

and a right-skewed distribution

Multiple myeloma:

x 3.4
M 2 .5

The mean is pulled toward

the skew.

Measures of spread: range & interquartile range

Minimum = 0.6

The first quartile, Q1, is the value in the

sample that has 25% of the data at or
below it ( it is the median of the lower

Q1= first quartile = 2.2

(n+1)x25%th data

half of the sorted data, excluding M).

The third quartile, Q3, is the value in the

M = median = 3.4

sample that has 75% of the data at or

below it ( it is the median of the upper
half of the sorted data, excluding M).

Q3= third quartile = 4.35

(n+1)x75%th data

Range = maximum minimum

Interquartile range = Q3 Q1

Maximum = 6.1

Five-number summary and boxplot

Largest = max = 6.1
BOXPLOT
7

Q3= third quartile

= 4.35
Years until death

M = median = 3.4

6
5
4
3
2
1

Q1= first quartile

= 2.2
Smallest = min = 0.6

0
Disease X

Five-number summary:
min Q1 M Q3 max

Calculating quartiles
Here the sample size is n=25

Q3= third quartile = (25+1)x75%th data = 4.35

M = median = (25+1)x50%th data= 3.4

Q1= first quartile = (25+1)x25%th data=2.2

Boxplots for skewed data

Comparing box plots for a normal

and a right-skewed distribution

Boxplots remain
true to the data and
depict clearly
symmetry or skew.

Side-by-side boxplots

Side-by-side boxplots comparing the earnings of four

groups of hourly workers at National Bank

Suspected outliers
Outliers are troublesome data points, and it is important to be able to
identify them.
One way to raise the flag for a suspected outlier is to compare the
distance from the suspicious data point to the nearest quartile (Q 1 or
Q3). We then compare this distance to the interquartile range
(distance between Q1 and Q3).
We call an observation a suspected outlier if it falls more than 1.5
times the size of the interquartile range (IQR) above the first quartile or
below the third quartile. This is called the 1.5 * IQR rule for outliers.

8
7

Q3 = 4.35

Distance to Q3
7.9 4.35 = 3.55

Years until death

6
5

Interquartile range
Q3 Q 1
4.35 2.2 = 2.15

4
3
2
1

Q1 = 2.2

0
Disease X

Individual #25 has a value of 7.9 years, which is 3.55 years above the
third quartile. This is more than 3.225 years, 1.5 * IQR. Thus,
individual #25 is a suspected outlier.

Measure of spread: the standard deviation

The standard deviation s is used to describe the variation around the
mean. Like the mean, it is not resistant to skew or outliers.
1. First calculate the variance s2.
n
1
2
s2
(
x

x
)

i
n 1 1

2. Then take the square root to get

the standard deviation s.

Mean
1 s.d.

1 n
2
s
(
x

x
)

i
n 1 1

Calculations

1
df

(x

x)

Mean = 63.4
Sum of squared deviations from mean = 85.2
Degrees freedom (df) = (n 1) = 13
s2 = variance = 85.2/13 = 6.55 inches squared
s = standard deviation = 6.55 = 2.56 inches

Women height (inches)

Properties of standard
deviation
s measures spread about the mean and should be used only when

the mean is the measure of center.

s = 0 only when all observations have the same value and there is
no spread. Otherwise, s > 0.

s is not resistant to outliers.

s has the same units of measurement as the original observations.

Software output for summary statistics:

Excel

- From Menu:

Tools/Data Analysis/
Descriptive Statistics

Give common
statistics of your
sample data.

Minitab

Choosing measures of center

and spread

Because the mean is not

resistant to outliers or skew, use
it to describe distributions that are
fairly symmetrical and dont have
outliers.
Plot the mean and use the
standard deviation for error bars.

Otherwise use the median in the

five number summary which can
be plotted as a boxplot.

Boxplot

Mean SD

What should you use, when, and why?

Arithmetic mean or median?

Edinburgh is considering imposing an income tax on citizens. City Council

wants a numerical summary of its citizens income to estimate the total tax
base.

Mean: Although income is likely to be right-skewed, the city government

wants to know about the total tax base.

In a study of standard of living of typical families in Glasgow, a sociologist

makes a numerical summary of family income in that city.

Median: The sociologist is interested in a typical family and wants to

lessen the impact of extreme incomes.

Obtaining data

Observation versus Experiment and association versus causation

Population versus sample

Sampling methods

Simple random samples

Stratified samples

Probelms in sampling

Data
Available data are data that were produced in the past for some other
purpose but that may help answer a present question inexpensively.
The library and the Internet are sources of available data.
Government statistical offices are the primary source for demographic,
economic, and social data (visit the Fed-Stats site at www.fedstats.gov).

When data are not available conduct a statistical survey or experiment

Observation and experiment

Observational study: Record data on individuals without attempting to
influence the responses.
Example: Watch the behavior of consumers looking at store displays,
or the interaction between managers and employees.
Experimental study: Deliberately impose a treatment on individuals
and record their responses. Influential factors can be controlled.
Example: To answer the question Which TV ad will sell more
toothpaste? show each ad to a separate group of consumers and
note whether they buy toothpaste.
Observational studies are essential sources of data on a variety of
topics. However, when our goal is to understand cause and effect,
experiments are the only source of fully convincing data.

Association or causeeffect
If early retirement and early death are found to be related (associative or
causative or both)?
That is,

Does early retirement causes early death?

Does personal health or similar thing causes the both simultaneously?

Are both happening?

Collecting data: statistical

Sampling
plans
surveys
Population size=N;
sample size=n;
k=N/n
1.
2.

3.

4.

Simple random sampling: subjects are selected with equal chances (n/N)
Systematic random sampling: selected the first one from first k subjects in the
population with equal chances and then select every kth subject until the
sample is completed
Stratified random sampling: divide population into several groups (strata) and
then select a random sample from each of them (Can be either proportional or
disproportional)
Cluster random sampling: divide the population into a large numebr of clusters
and then select a random sample of clusters. Use all the subjects in them

Sampling variability
Each time we take a random sample from a population, we are likely to
get a different set of individuals and a calculate a different statistic. This
is called sampling variability.
The good news is that, if we take lots of random samples of the same
size from a given population, the variation from sample to samplethe
sampling distributionwill follow a predictable pattern. All of
statistical inference is based on this knowledge.

The variability of a statistic is described by the spread of its sampling

distribution. This spread depends on the sampling design and the
sample size n, with larger sample sizes leading to lower variability.
Large random samples are almost always close estimates of the true
population parameter. However, this only applies to random samples.

Remember the QuickVote online surveys.

They are worthless no matter how many people
participate because they use a voluntary
sampling design and not random sampling.

Bias
The study design is biased if it systematically favors certain outcomes
There are many types of biases: sampling bias, response bias, etc.

Managing bias and variability

To reduce bias, use random sampling. The values of a statistic

computed from an SRS neither consistently overestimate or
underestimate the value of a population parameter.

To reduce the variability of a statistic from an SRS, use a larger

sample. You can make the variability as small as you want by taking
a large enough sample.

Population size doesnt matter: The variability of a statistic from a

random sample does not depend on the size of the population, as
long as the population is at least 100 times larger than the sample.

Practical note
Large samples are not always attainable.

Sometimes the cost, difficulty, or preciousness of what is studied limits

drastically any possible sample size

Blood samples/biopsies: No more than a handful of repetitions

acceptable. We often even make do with just one.

Opinion polls have a limited sample size due to time and cost of
operation. During election times though, sample sizes are increased
for better accuracy.

Caution about sampling surveys

Nonresponse: People who feel they have something to hide or

who dont like their privacy being invaded probably wont answer,
yet they are part of the population.

Response bias: Fancy term for lying when you think you should not
tell the truth, or forgetting. This is particularly important when the
questions are very personal (e.g., How much do you drink?) or
related to the past.

Wording effects: Questions worded like Do you agree that it is

awful that are prompting you to give a particular response.